The SA Social Security Agency (Sassa) is a month behind schedule, six months before it could face another crisis in the payment of lifeline social grants to 10.7-million people, a report filed with the Constitutional Court on Friday showed.

Sassa had been due to finish in August the evaluation of possible replacements for Cash Paymaster Services (CPS), the company currently handling government grant payments under an unlawful contract. It now expected that to happen only in the final week of September, Sassa told the court.

“This delay will have an impact on the finalisation of the procurement process,” Sassa said.

Sassa has until 1 April 2018 to either build the systems to make social grant payments itself or implement a legal outsourcing contract.

But it is falling behind its own plans because of “challenges in procuring due diligence experts”, it disclosed for the first time on Friday.

The SA Post Office – the preferred partner to take over from CPS – had submitted a proposal for the work on August 7 as scheduled, Sassa said.
However, Sassa was unable to “obtain quotations from the market for a service provider to conduct due diligence on the post office”.

That bland description masks what the document shows to have been a remarkable sequence of events.

It had asked a total of 15 different potential suppliers for quotations to do the due diligence, Sassa said, but none responded. It then asked for three more quotations, one of those from the Council for Scientific and Industrial Research (CSIR), but all three suppliers responded late. It then asked the Treasury for permission to appoint the CSIR without a competitive process “based on the fact that the CSIR is an organ of state”. The Treasury refused to grant the exemption. So, nearly a month after its efforts started, Sassa again asked the three previously late providers of quotation for quotes. The CSIR came in cheapest and was appointed.

That quotation debacle has parallels to the tender process that got Sassa in trouble in the first place. In 2014 the Constitutional Court ruled that Sassa had failed to run a valid tender for the payment of social grants because it had changed the rules at the last minute. It was ordered to run a fresh tender. Serious contenders which had previously competed for the business – including CPS – did not submit bids, saying the tender was too constrained. Sassa said the three bids it had received were not compliant with its requirements, and so it would not award the tender. It would, instead, phase out CPS by taking over grant payments itself.

It never did so.

Last week Social Development Minister Bathabile Dlamini, who was responsible for the grants crisis earlier this year, told a Parliamentary committee that “many companies” had applied to handle the due diligence on the Post Office.

On Friday Dlamini in a sworn affidavit confirmed the Sassa report which showed that had never been the case.

Dlamini has previously claimed that there had never been any risk of an interruption to social grant payments and that payments would not be imperiled in future.

“The most significant risk that Sassa has identified is the failure to pay social grants on 1 April 2018,” Sassa said in its report on Friday.