The South African Social Services Agency (Sassa) has revealed that it is again hoping to negotiate a new interim contract with Cash Paymaster Services (CPS) to pay out its social grants after last week's negotiations were turned down by a high-level team.
It put the ball in National Treasury's court to determine if these negotiations would go ahead. The Constitutional Court in 2014 declared the contract with CPS invalid and ordered Sassa to find a new service provider.
Sassa and Social Development Minister Bathabile Dlamini revealed the intention for fresh negotiations in papers filed at the Constitutional Court on Monday afternoon, about an hour before their 4pm deadline.
The parties didn't, however, answer any of the questions the court had wanted Sassa and Dlamini to answer, including who determined that Sassa itself could not pay the grants after the end of the month, and when Sassa knew it wouldn't be able to do so.
Intervention of ministerial task team
A team of ministers, appointed on Wednesday to "assist with the uninterrupted payment of social grants", after a meeting on Thursday shot down Sassa's negotiations with CPS at the time, according to Sassa and Dlamini's papers.
This ministerial task team includes Ministers Jeff Radebe (Presidency), Siyabonga Cwele (Postal and Telecommunications), Malusi Gigaba (Home Affairs), Pravin Gordhan (Finance), David Mahlobo (State Security) and Naledi Pandor (Science and Technology).
According to Sassa's heads of argument the task team said "negotiations should start afresh only if and when the National Treasury gave its prior written approval for a deviation from the requirement that Sassa invite competitive bids as required" by Treasury's instructions.
Sassa's legal team wrote to advocate Wim Trengove, SC, who was appointed to oversee the process of negotiations "to ensure the process is legally sound", and on Saturday he sent a memorandum to the ministerial task team "in which he concluded that it would be appropriate for the National Treasury to allow Sassa to deviate provided that it contracts with CPS for no longer than the time it ... reasonably requires to appoint a new contractor by a competitive bidding process."
Following Trengove's approval, Dlamini directed Sassa acting CEO Thokozani Magwaza to ask Treasury if negotiations could continue.
CPS warns shorter contract more expensive
CPS has, however, in its heads of argument which it also filed on Monday, indicated that the shorter the contract, the more expensive their prices.
In an interim contract that was negotiated earlier, "CPS has agreed to continue to provide its services at the current price subject only to a CPI adjustment from 1 April 2017 for the anticipated two-year contract. CPS has explained why this is a fair and reasonable price."
CPS added it had "no difficulty with shortening the duration of the interim contract to a period of 18 months or less", provided that this was enough time for Sassa to take over. "CPS would also need to review the price after taking into account the economies of scale."
Public Protector or Auditor-General to evaluate Sassa's contracts?
In their court papers, Sassa and Dlamini's lawyers dropped another bombshell by further suggesting the court hand over the evaluation of Sassa's contract with CPS to an institution the Public Protector and the Auditor-General.
It said contractual matters might be too complex for the court, and it would also violate the principle of the separation of powers.
In its heads of argument, Sassa said the court had no power to determine in advance the terms regarding price and duration on which Sassa and CPS may contract with one another. That "would fall outside the parameters of judicial authority contemplated by the separation of powers", it said.
Besides, it said the court did not have enough "facts and considerations relevant to concluding a contractual arrangement on reasonable terms".
It said: "What is more, the outcome of the contractual negotiations is not a foregone conclusion", but there could be "permutations" that were "polycentric in nature".
Sassa warned further: "The new negotiations with CPS, if authorised by the National Treasury, like the negotiations earlier this month, are likely to be very complex because the subject-matter of any eventual agreement will depend on a wide range of variables and interactions between them and the parties' respective constraints and needs."
It said the new negotiations with CPS "may or may not lead to a contract", but if it did, the validity of the contract could only be determined after the contract has been concluded.
Sassa lays out terms of CPS contract
Sassa also attached a suggested draft order to its heads of argument said it believed it could legally continue with a contract with CPS, which would be ordered to "act reasonably, with due regard to its constitutional obligations arising from the history of this matter and the fact that grant beneficiaries are dependent on it for the achievement of their constitutional rights".
Sassa suggested a contract with CPS after the end of this month "for an interim period until Sassa appoints a new contractor or new contractors through a new competitive bidding process". It also said in that interim period it would take steps towards administering and paying these grants itself.
Sassa in the order said said any interim contract with CPS should contain safeguards "to ensure that personal data obtained in the payment process remains private and may not be used for any purpose other than the payment of the grants or any other purpose sanctioned" by Dlamini.
Personal information should at the end of the contract be given to Sassa "and removed from the possession of CPS" and all affiliated companies, and preclude these from inviting beneficiaries to "opt in" to the sharing of their confidential information.
Sassa wants 20 days to file details of such a contract to CPS to the court, and 60 days after the interim period to file "an audited statement of the expenses incurred, the income received and the net profit earned under the completed 'interim' contract".
Sassa said the court should order Dlamini and Sassa to file an affidavit on the steps they have taken or will take, and when, to ensure that the payment of social grants is made after the end of the month.
Further, they will file reports to the court on a quarterly basis setting out "how they plan to ensure the payment of social grants after the expiry of any 'interim' contract" and what steps they are taking to do so.