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Corruption Watch appears in the Constitutional Court again today, in the tender dispute between AllPay Consolidated Investments Holdings and others v the South African Social Security Agency (Sassa) and others.
The case was brought before the Constitutional Court by losing bidder Allpay, which disputed the awarding of a R10-billion tender by Sassa to a private company, Cash Paymaster Services (CPS) for the distribution of social grants.
The civil society organisation made a previous appearance in September 2013 as a friend of the court, where it argued that irregularities in the public procurement process may be signs of more extensive corrupt activities.
Today the Constitutional Court will hear argument from all parties, as well as the friends of the court, relating to the appropriate relief to be granted, following its finding in November 2013 that the awarding of the tender had been unlawful.
The court gave the parties until 11 February 2014 to prepare affidavits and gather evidence to support their various arguments.
AllPay is arguing for a fresh tender process and a new contractor as the only just and equitable remedy, while Sassa and CPS contend that practical considerations, including the risk of the payment service being interrupted, should be enough reason to allow CPS to run its contract to completion. This can only be achieved if the court declines to set aside the tender or alternatively, suspends the declaration of invalidity for the remainder of the contractual period.
The submissions of Corruption Watch, as the first friend of the court, focus on the need to protect and uphold the rule of law. Corruption Watch has also requested that Sassa provide information relating to the steps taken, if any, to investigate certain irregularities that were raised in its previous submissions to the Constitutional Court.
The other friend of the court, the Centre for Child Law, agrees with the argument for suspending the declaration of invalidity, as this will prevent any interruption of the payment of social grants.
Read the full explanatory note, issued by the Constitutional Court.
Procurement processes are there for a reason
On 29 November Judge Johan Froneman handed down a unanimous judgment, which found that the decision to award the tender to CPS was unlawful. In doing so, he overturned the decision of the Supreme Court of Appeal, which had turned down an earlier appeal by Allpay.
The matter began in the High Court where the tender was declared invalid, but because of the potential upheaval and delay in issuing the grants, the Court declined to set the award aside. Allpay appealed to the Supreme Court, which dismissed Allpay’s appeal and upheld another appeal by CPS against the High Court’s declaration of invalidity. Allpay then went to the Constitutional Court to have the Supreme Court’s rulings set aside.
The judgement concurred with Corruption Watch’s argument. The Constitutional Court held that “deviations from fair process may themselves all too often be symptoms of corruption or malfeasance in the process. In other words, an unfair process may betoken a deliberately skewed process”.
SASSA and CPS were ordered to pay Allpay’s costs, including that of three counsel, in the High Court, the Supreme Court and the Constitutional Court. The court declined to set aside the tender immediately, as the 15-million beneficiaries of grants may be affected, and ordered the parties to return to court on 11 February 2014 to present evidence as to a “just and equitable” remedy.
