Extending CPS contract would be unlawful – Gordhan

The South African Social Security Agency (Sassa) sent National Treasury an official request for a deviation from regular tender processes to extend its contract with Cash Paymaster Services (CPS) to pay social grants, Finance Minister Pravin Gordhan confirmed on Tuesday.

Appearing before the standing committee on public accounts (Scopa), Gordhan said the grants agency had written to the Treasury first on February 7 requesting the deviation from normal tender processes to ensure grant payments to 17 million citizens come April 1.

Gordhan was invited by the committee to explain Treasury’s role in the debacle over the payments of grants.  He said his office had declined to grant the deviation, saying it would be unlawful if an extension of the CPS contract were to be allowed.

“If you want to do anything with that tender‚ go back to the Constitutional Court‚” Gordhan said, adding deviations should only be approved for “the shortest possible period” to allow for a return to legal tender processes.

The contract between Sassa and CPS expires at the end of the month and was declared by the Constitutional Court in 2014 to be constitutionally invalid. But to ensure there was no disruption to the payment of grants and pensions, the court suspended its order and asked the grants agency to tender for a new service provider.

Sassa and social development officials have since then been scrambling to finalise an interim deal with CPS to ensure payments after failing to secure a new service provider. This is despite officials assuring the ConCourt in November 2015 that Sassa intended to take over the payment of grants through an internal payment system on April 1, 2017.

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