Gordhan says CPS contract illegal

Finance Minister Pravin Gordhan File picture: GCIS
Finance Minister Pravin Gordhan
File picture: GCIS

Finance minister Pravin Gordhan says Treasury received an official request for deviation from regular tender processes from the South African Social Security Agency (Sassa) yesterday.

Gordhan was invited to appear before parliament’s standing committee on public accounts (Scopa) on Tuesday to explain Treasury’s role in the continuing saga around the payment of social grants.

He said that Sassa had written to the National Treasury first on February 7‚ requesting a deviation from normal tender processes to allow them to extend the existing contract with the current service provider‚ Cash Paymaster Services (CPS). That contract was declared invalid by the Constitutional Court in 2014.

Treasury declined the deviation request.

Gordhan said a second request for deviation was received yesterday‚ in order to authorise an entirely new contract with CPS. He said the Treasury was “applying its mind“.

But he said any extension of the CPS contract would be unlawful.

“If you want to do anything with that tender‚ go back to the Constitutional Court‚” Gordhan said.

Gordhan told the committee that his department was appearing “not as the main actors‚ but as the supporting actors“‚ saying the primary responsibility for ensuring that grants are paid lies with social development minister Bathabile Dlamini.

He outlined the five instances in which deviations are considered‚ which include cases of emergency‚ “acts of God“‚ cases where only one supplier has the requisite skills‚ cases in which a closed tender process is followed and instances where written approval is given by the Treasury.

He said that deviations should only be granted for “the shortest possible period“‚ to allow for a return to constitutional tendering processes.

Gordhan said the matter of social grants was receiving attention from an inter-ministerial committee‚ which has met three times since last Thursday.

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