R21bn govt tender in limbo

By Siyabonga Africa, ITWeb junior journalist

Johannesburg, 13 Oct 2008

A R21 billion tender for the supply of an electronic payment solution for the Department of Social Services and the South African Social Security Agency (SASSA), could be sent back to the drawing board.

This morning, NET 1 UEPS Technologies, one of the nine companies bidding for the tender, said it received a Bidders Notice 11 from SASSA, advising it that no award would be made in respect of the tender and a fresh tender process must be commenced. SASSA found that the evaluation process followed has been “unreliable”.

The tender was announced in 2007 and bidders were told to create a solution that will ensure efficiency and effectiveness of service delivery operations, reduce cost of payment and related services and reduce fraud, corruption and leakage.

The tender is estimated at R7 billion per annum, over a period of three years.

"The recommendation of the bid adjudication committee is not unexpected, given the long delays already suffered during the evaluation process," says Net1 chairman and CEO Serge Belamant. "We await the CEO of SASSA's final decision, which we expect will occur during the next few weeks.

“In the meantime, we will continue to render our high-quality service in terms of our current service level agreements. Should the tender process be cancelled, we believe that our current service level agreements will have to be extended again and we foresee no difficulties in continuing our activities," he concluded.

The bidders' notice, sent to the short-listed bidders, states SASSA's CEO, Fezile Makiwane, has to decide whether he will accept the recommendations of the adjudication committee or propose a different course of action.

It appears that the evaluation process has been the subject of controversy for some time. In June last year, the Institute of Security Studies mentioned it in an article relating to issues of transparency and corruption in the government's procurement process.

At this stage, it is not known who the other preferred bidders are. A Department of Social Services spokesperson was not available for comment at the time of publication.