‘Huge public funds at stake’: Probe into smart driving licence tender process

Just days after announcing the appointment of a preferred bidder to handle the rollout of South Africa’s new driver’s licence smart card, red flags have been raised about the tender.

Earlier this week, the Department of Transport (DoT) announced it appointed French multi-national technology company, IDEMIA, as the preferred bidder to produce the new smart driving cards.

However, in a twist of events, the department on Thursday confirmed that an investigation into the procurement process in the awarding of the tender to IDEMIA has been initiated.

“The Minister of Transport, Barbara Creecy, has requested the Auditor-General (AG), who is currently undertaking an audit of the procurement process for the new driving license card, to widen the scope of the audit process,” the department said in a statement.

ALSO READ: Transport department appoints French company to roll out driver’s licence smart cards in SA

The Automobile Association (AA) raised concerns about IDEMIA’s appointment after the identity and security technology company’s contract with the Airports Company of South Africa (Acsa) was recently cancelled.

IDEMIA saga

A R115 million tender awarded to IDEMIA by Asca was terminated following a legal battle with the company’s BEE contractual partner, InfoVerge.

“The contract termination is in line with the conditions of the service level agreement, which allows for a 60-day notice period, that will allow IDEMIA to conclude the work currently underway,” Acsa said in a statement on 27 August.

It had emerged last month that there may have been irregularities in the procurement process of the Acsa-IDEMIA contract after “prima facie evidence of wrongdoing” was uncovered regarding the biometric and digital identity technology project.

ALSO READ: ACSA suspends executive over possible irregularities in R115m biometric tender

This resulted in the precautionary suspension of Asca chief information officer Mthokozisi Mncwabe.

According to Asca, Mncwabe’s suspension will enable Acsa to conduct further investigations and provide a public report on their findings.

Investigations of the tender process issues

The minister asked for these issues to be investigated by the AG:

Whether supply chain management prescripts were followed to the letter;
Whether the specs for the project included adequate measures to protect the safety of personal data given the sensitivity of information and security features involved in this project;
The implications for this procurement process of the recent cancellation by Acsa of a contract that was awarded to IDEMIA due to a contractual dispute between IDEMIA and its BBBEE partner InfoVerge;
Whether IDEMIA’s technical capacity and timeous delivery were adequately considered in the tender process following allegations of challenges at three Airports where IDEMIA’s Biometrics system was contracted by the Border Management Authority (BMA);
Whether other South African service providers tendered, including service providers contracted by the Government Printing Works (GPW)? And why were they not selected?
Was the chosen bidder the most affordable option?

The AA has since welcomed the investigation.

“Huge public funds are at stake, and the public must completely trust the process and its outcomes.

“The DoT and other government departments must justify the selection of specific entities not only in terms of the money being spent but also in terms of how these entities are better suited than local suppliers to provide products and services,” the AA noted.

Concerns by OUTA

In a statement shared with The Citizen, AA said it has taken cognisance of Organisation Undoing Tax Abuse (Outa) concerns regarding the Driving Licence Card Account (DLCA).

The civil rights organisation highlighted that the DLCA’s allocated budget of R468 million for the project falls short of the R762 million bid by IDEMIA, which has since escalated to approximately R898 million.

The DLCA has been criticised for “recklessly budgeting without first determining the actual costs of the necessary equipment”.

“This is yet another red flag in a growing list of problems with this process and we therefore welcome the request by the minister for the AG to prioritise its audit and investigation and await with keen interest the AG’s findings,” the AA concluded.

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