The black economic empowerment consortium of listed technology company Net1’s subsidiary, Cash Payment Services, once again came under the spotlight in the Constitutional Court this week.
Absa subsidiary AllPay took its battle for the R10 billion social grants tender to the court after losing out to Cash Paymaster Services due to alleged tender-process irregularities.
One of the irregularities AllPay is resting on to set aside the five-year contract is the failure by the SA Social Security Agency (Sassa) to assess the companies in Cash Paymaster Services’ empowerment consortium, which were joint bidders. The contract was implemented nationwide in April last year.
According to court papers, the three companies – Born Free Investments, Ekhaya Skills Development and Retles Trading – would be responsible for more than 74% of the execution and management of the tender.
Arguing for AllPay, Advocate Gilbert Marcus said a fair and competitive tender, encapsulated in section 217 of the Constitution, would require that all bidders be properly assessed.
“Had such an assessment been performed in respect of the (Cash Paymaster Services) consortium partners, the facts reveal that it would have been clear that they lacked the expertise or experience to implement anything close to a tender of this magnitude.”
Sassa’s legal counsel, Advocate Fanie Cilliers, SC, argued thatAllPay’s partners were not assessed either, but that the subsidiary said it was disqualified before it got to that stage.
Also under contention was the transcript AllPay introduced at its Supreme Court of Appeal hearing, which was not allowed to be admitted into evidence.
This is a transcript of a conversation between Roedolf Kay, the national coordinator of the SA Older Persons’ Forum and an employee of John Tsalamandris, who provided secretarial services to the bid evaluation committee and the bid adjudication committee.
In the transcript (a copy of which has been seen by City Press), Tsalamandris makes a number of claims, including that AllPay’s scores were deliberately lowered so that it would not compete with Cash Paymaster Services on price as AllPay’s price was cheaper and that there were attempts made to “regularise” the paper records relating to the evaluation of the tender so that the flaws in the process were not revealed.
Tsalamandris said Advocate Michael Hulley, the strategic adviser tothe bid evaluation committee and the bid adjudication committee, did not submit any invoices to Sassa and there were no terms of reference for what he was used for in the tender process. Hulley is also President Jacob Zuma’s legal adviser.
But Cilliers dismissed this and said there was no record of Hulley receiving a payment.
According to Sassa, Hulley “rendered advice as part of his broader relationship with government”. But AllPay said this was at odds with Hulley’s letter of appointment, which indicates that his fees for acting as the “strategic adviser” to the process would be R21 000 a day.
Deputy Chief Justice Dikgang Moseneke asked AllPay that if they felt the tender process was laced with corruption, why didn’t they open a separate case relating to corruption instead
of expecting the highest court in the land to adjudicate at this late stage.
But Marcus insisted that this evidence explained “what happened behind the scenes”.
In a responding affidavit by Sassa, however, Tsalamandris reconsidered his view that there was corruption in the tender process, but said there were “short cuts” that made the tender process flawed.
Cilliers painted AllPay as a sore loser and said Cash Paymaster Services was able to provide the preferred solution to Sassa, while AllPay was not.
He said: “The problem that Sassa had was the verification by the grantee prior to every payment. Cash Paymaster Services came up with a solution for biometric verification by voice, while AllPay said it couldn’t be done on their ATMs.”
Judgment on the matter was reserved.
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