IN THE CONSTITUTIONAL COURT OF SOUTH AFRICA In the matter between [ALLPAY CONSOLIDATED INVESTMENT HOLDINGS (PTY) LTD ALLPAY FREE STATE (PTY) LTD ALLPAY WESTERN CAPE (PTY) LTD ALLPAY GAUTENG (PTY) LTD ALLPAY EASTERN CAPE (PTY) LTD [ALLPAY KWAZULU NATAL (PTY) LTD ALLPAY MPUMALANSA (PTY) LTD [ALLPAY LIMPOPO (PTY) LTD ALLPAY NORTH WEST (PTY) LTD ALLPAY NORTHERN CAPE (PTY) LTD MICAWBER 851 (PTY) LTD MICAWBER 852 (PTY) LTD MICAWBER 853 (PTY)LTD MICAWBER 854 (PTY) LTD and ‘THE CHIEF CXEGUTIE OFFICER OF THE SOUTH AFRICAN SOCIAL SECURITY AGENCY ‘THE SOUTH AFRICAN SOCIAL SECURITY AGENCY ‘CASH PAYMASTER SERVICES (PTY) LTD EZIDLUBHEDU INVESTMENT HOLDINGS (PTY) LTD CASE NO:48r13, First Applicant ‘Second Applicant Third Applicant Fourth Applicant Frith Applicant Sh Applicant Seventh Applicant Eighth Applicant Ninth Applicant Tent Applicant Eleventh Applicant “Tweith Applicant “hireonth Applicant Fourteenth Applicant First Respondent Second Respondent Third Respondent Fourth RespondentFLASH SAVINGS AND GREDIT COOPERATIVE ENLIGHTENED SECURITY FORCE (PTY) LTD MOBA COMM (PTY) LTD EMPILWENI PAYOUT SERVICES (PTY) LTD PENSION MANAGEMENT (PTY) LTD MASINGITA FINANCIAL SERVICES (PTY) LTD THE SOUTH AFRICAN POST OFFICE ROMAN PROTECTION SOLUTIONS cc UBANK LIMITED AFRICAN RENAISSANCE INVESTMENT MANAGEMENT (PTY) LTD ‘STANDARD BANK GROUP LIMITED NEW SOLUTIONS (PTY)LTD ITHALA LIMITED KTS TECHNOLOGY SOLUTIONS CONSORTIUM THE SOUTH AFRICAN RESERVE BANK THE PAYMENT ASSOCIATION OF SOUTH AFRICA and ‘CORRUPTION WATCH CENTRE FOR CHILD Law THE BLACK SASH TRUST FILING SHEET: Frith Respondent Sth Respondent Seventh Respondent Eight Respondent Ninth Respondent Tenth Respondent Eloventh Respondent ‘Tweith Respondent ‘Thirteenth Respondent Fourteenth Respondent Fifleenth Respondent Sixteenth Respondent Seventeenth Respondent Eighteenth Respondent Nineteenth Respondent Twentieth Respondent First Amicus Curiae ‘Second Amicus Curiae Thi Amicus Curiae FIRST AND SECOND RESPONDENTS’ FOLLOW-UP REPORTPRESENTED HEREWITH for serves and fling 41. Fist and Second Respondents’ follow-up report. DATED at SANDTON on this 2nd day of MARCH 2017. ‘Tm SUKAZI First and Second Respondents’ Attorneys Sandton Close 2, Block A 2nd floor Cr, th & Nomich Close, Sandton P.O. BOX 785210, Sandton, 2146 Tet 011 911 4100 Fax: 011 783 3537 Email tsukazi@timsukaziine.co.za To: ‘THE REGISTRAR OF THE SERVICE BY EMAIL CONSTITUTIONAL COURT ‘AND HAND. BRAAMFONTEIN AND TO: NORTON INC SERVICE BY EMAIL ‘Attorneys forthe First to Fourteenth Applicants 195 Daisy Street SandtonTet 011 666 7560 Fax: 086 600 5529 Email Anthonvi@nortonsine.com / Anton@nortonsine.com Ref: A Norton / A Rosts AND TO: SMIT SEWGOOLAM INC SERVICE BY EMAIL “Third Respondent's Attorney 12 Avonwold Road Saxonwold Tek: 011 646 0006 Fax: 011 301 3200 Email jiaan@smitsew.co.2a AND TO: NORTON ROSE FULBRIGHT ‘SERVICE BY EMAIL [Attorneys forthe nineteenth respondent 18 Alice Lane Sandton Tel: 011 685 8500 Email: Mareise vanderwesthuisen@novtonrosefulbriaht com maithew.clark@nortonrasefulbight.com AND TO: PAYMENTS ASSOCIATION OF SOUTH AFRICA SERVICE BY EMAIL, ‘Twentieth Respondent 2nd Floor, D Building ‘Sunnyside Office Park 32 Princess of Wales Terrace Parktown JOHANNESBURG ‘Tel 011 645.6760 Fax 011 645 6860Email PieneC@pasa org. za / WalleV@pasa.or.za AND TO: VAN HUYLSTEYNS. ‘Attomeys for Fist Amicus Curiae SERVICE BY EMAIL 431d Floor, Sandton City Office Tower 4168 Fifth Steet, Sandhurst SANDTON Tet 011 623 9900 Fax: 011 523 5328, Ref: A Legg/D Rath Emait: Daniel@vlaw.co.za AND TO: LEGAL RESOURCES CENTRE SERVICE BY EMAIL ‘Attomeys forthe Second and Third Amicus Curiae Constitutional Litigation Unit 46th Floor Bram Fischer House 20 Albert Street JOHANNESBURG ‘Tet 011 836 9891 Fax: 011 834.4273 E-mail: naseema@lre.ora,za Ref. 0752121‘CONSTITUTIONAL COURT OF SOUTH AFRICA case COTARS In the matter between: [ALLPAY CONSOLIDATED INVESTMENT HOLDINGS AND OTHERS Applicants and CEO OF SASSA AND OTHERS Respondents ‘SASSA'S FOLLOW-UP REPORT INTRODUCTION 4, This report is madeon behalf ofthe South ican Sooral Securty Agercy by its ‘acting Chief Executive Officer acting under the direction ofthe Minister of Soci Development“This court exerci 1 supervisory luisction over ASSAYS plans for the come forward wih their bank accounts as opposed to & procurement prosess with banks ((e, a benklng soliton as opposed 0 8 procurement solution) However, there was no consensus about the feashbifty of the options that ‘emerged, There ar an! have been diffrences of opinion both within SASSA and amongst SAGSA and stakeholders as o how bast to preceed in a manner \which priorisas the best interests of beneficiaries, “The Minister and SASSA have evaluatod each ofthe options and he associated risks and have concluded that an form arrangement with OPS isthe option swith the leas iskio ensure the uintemuptod payment of ssa grants after 31 March 2017 at least a tis point. The Minster and SASSA recognise that ‘SASSA may need to resort to another option or combnaten of epions which tnay involve banks, SAPO and the appcintment of a service provider for cash istnbution onan expected basis. The Minister and SASSA have considered the views of SARB and Treasury in evaluating the appropriate course and ‘continue todo so. “The differences of opinion hat emerged over recent months extend both to how {o proceed and fe the oorree lagal approach,35. 38, 31 During this process, and in January and early February 2017, SASSA considered and took steps t0 apply to the Consttusonal Court to authorise SASSA to engage PS to provide servions forthe payment of social grants for tne period 1 Apri 2017 to 81 March 2018 and to request the court to resume ts supervisory urisieion by receiving futher report by no lator than Octobor 2017. Con 8 February 2017, the Minister took a decision not to follow tis cours, Rather, the Minster deced to act onthe ace ha the court cannot authorise ‘an extension ofthe CPS contract and any interim arrangement with CPS wil constiute @ new procurement decision that fs subject to section 217 of the Consituon andthe Public Finanee Management Act of 1988. The Minister is advised that the court cannot authorise in advance any new agreement with ‘¢PS on terms yetto be determined and in crcumstances where heres a neod for futher engagement with Treasury “The aiferenoe in opinions and delays in resolving cfferent views have in tum delayed forging and implementing a clear path since October 2016, when SSASSA received the legal advice in October 2016 refered to above. Formal negotiations with CPS — which have now commenced - were delayed in part forth reason, The Minister and SASSA accept that formal negotiations ought to have commenced at an eater stage, Until recently, there have been only informal discussions between SASSA and CPS, and CPS hed advised that Ris wiling to essiat SASSAL38, 40, (On 8 December 2016, SASSA issued a request for infomation (RFI) fo assist ito formulate a request for proposals (RFP) appropriate to the prvaling circumstances and that takes cognisance ofthe current marke in commercial ‘and technical tems. The RFI is altachod as °C". It invited interested service providers wha wishto patejpat inthe provision of banking services, payment management and reconeiaton of social grants to SASSA to provide Information, The RF sought information relating to an integrated grant administration and payment framework, card body production ard dition, social grant payment card service provislon and account management, cash istibuton and pay-point management, blomettic root of Ife and integrated fisk management and cyber assuranee. The RFI requested responses providing indicative costing and/or models wth cost foracating for both @ 3 ‘and 5 year contrad. 'A compulsory briefing Session was held on 13 January 2017. Submissions closed on 10 Febuary 2017, There were 18 responses which are curenty belng evakated. SASSA has planned the ol ou ofthe procurement process ‘onthe bass that Iwill advertise an RFP by 17 Morch 2017 with a closing date ‘of 28 Apri 2017, (On 7 February 2017, the CEO wrote to the Director-General of National “Treasury for apprval for deviation ftom the normal compelive bidding process in accordance wih paragraph 8.5 of the National Treasury Insttuction 3 of 201612017. The lelter requested Treasury's suppott for an extension of the 2“1 a. ‘xiang contact wih CPS ta enable a negotiation to appoint CPS for a potiod of 12 to 18 months ater 1 April 2017, The request posited a combination of an ‘ongoing relatonshp with CPS and Option 6 referred to above. A copy is attached as 0" on 8 February 2017, Mr Tshtangano, the Chiat Detor: SOM Governance, Monitoring and Compliance responded. In short, Treasury did not ace SASSA’s explanation for is postion, and expressed concem about the perpevation of uniawfuiess and constitutionally in the face of the Gansttutonal Court's decisions. The eter advised that National Treasury ‘would not suppot the extension of the unlawful CPS contract unless the Constitutional Cout further extended the suspension ofits lnvality beyond 34 March 2017, Italo advised that SASSA should have requested a deviation aevertse anew ender for a short pri in December 2016 or ealy January 2017 to avoid a sa-crented emergency. A copy is attached as "E* Cover recent weeks, there have been various communications between the Minister and the Vinistor of Finance. ‘The Ministers have diferent views about how to proceed. The communications were uni recenty informed by a legal approach tha he Ministor and SASSA have since reconsidered. Both Ministers are acutely anare thatthe unntaruted payment f social grants fer31 March 2017 fs the proty, ‘The Ministerhas taken ito account the views expressed by the Miniter f Finance, has taken nto account that it may be appropriate fot “reasuy’s vow to be an atematv route should I not be possible to reach an intaim arrangement wih CPS on reasonable terms and fora sufficient inited43, 44, 46, period, The Minister intends to continue to work co-operaivly with the Minster of Finance and Teasuty to ensure that the payment of social grants uninterupled and to legalise the payment of social grants on a satisfactory basis as so0n as possible In tght of recent evenis and the need for intetgovernmental co-operation, the RFP process wl ow be adjusted fo ensure that any ongoing relationship wih COPS takes approriate cogrisance of alternative solutions proposed by infer ala Treasury and SARB. The RFP is now ltended to lead, 23 S000 a3 reasonably practicable, 10 the appointment of a conrater or contractrs to perform he grant administration and payment function that are the subject of tho CPS contrac: via @ competitive bidding process and until such me as SASBA is in fact ready to Implement its ultmate Wsion on 28 Februaty 2017, SASSA instituted an application in the Constitutional ‘cour, but wthdrow ton 4 March 2017. The applleation was fled without the authorisation of he acting CEO orthe Minister, who should have been butwere pot consued beforehand, Ones aware ofthe decision, the Minister instructed SSASSA to withdaw the appliotion. AL the time ofthe fig of this por, he circumstances ef the fling ofthe application are still being investigated by the Minister and SASSA. “The affidavit supporting the application contains ertors, ‘This report reflects ‘SASSA's postion.SASSA'S INTENDED COURSE OF ACTION a 48, 4, ‘SASGA's convuct ta date has been based on ts intenton to assume the function of paying and adninistering eocial grants self, an intention that has been ‘expressed publely since at least 2012 SASSA now accepts that to puroue the intetion in the shot or medium tem va cause undve delay in puting the payment of socal grants on a lewl footing, Instead, it wil run a competitive bidding process Yo have @ new contractor oF contacter in pace. This wil be done through the REP adjusted as required to aezammodate any appropriate solutions ffem f, Treasury and to ensure progress on a co-operative basis “This wil tcely mean that SASSA wil only be able © pursue the objectives contemplated by the Progress Repott over the medium to fonger term, The objectives that SASSA has sought to implement, continue be regarded os the most esrabe poly objectives to serve the interests of baneiiariesin the ona {erm, including in respect of biometric innovation, SASSA wil continue to take stops to implement these pollcy objectives. Inthe meantime the service provider or proves appointed as a result ofthe REP prooass wil deliver the services, The Mister appreciates that it may in fac take longer, possibly fve ‘years, 1o implement SASSA's poli objectives. “The Minister has mandated @ negotiating team fo conduct negotiations with GPS to reach an arrangement whereby CPS will continue to pay social grants after 31 March 2017, The mandate that has been given is to negotiate &50, 5 22, transitional rrangenent wheeeby the scope and duration of he arrangements limited as far as reasonably possible, is within budget parameters and on reaconable ters. This wil tkely entail annem arrangement wih CPS in order reguarise the poson and ensure the unintorupted payment of soca grants s at 31 March 2017. The intention is that new sence providers willbe appointed on a competitive basis. ‘oPS has icicted a witingness to engage with SASSA to assist in ensuring rant payment ecninulty and Yo assist in the transilon of CPS operations towards a new sevice model. Formal negotiations coremenced on 1 March 2017 and are cortnuing, The negotiation team is comprised of oficial from the Department o Social Development, SASSA and some ofits workstteams “The Minister and SASSA wit engage co-operatively wth National Treasury and other stakeholders regading the most appropriate solutions tothe challenges boing faced Ponty attention wil be given to framing the RFP appropriately given the prevaiing circumstances. ”TED, Chorio MS BO DLAMIN, MP MINISTER OF SOCIAL DEVELOPMENT SE Ms THAMO NZOBE ACTING CEO, SASSA DATE: 2 MARCH 2017IN THE CONSTITUTIONAL COURT OF SOUTH AFRICA Inthe matter belweer: ALIPAY CONSOLIDATED INVESTMENT HOLDINGS (PTY) LTD [ALIPAY FREE STATE (PTY) LTD [ALLPAY WESTERN CAPE (PTY) LTD ALLPAY GAUTENG (PTY) LTD [ALLPAY EASTERN CAPE (PTY) LTD ‘ALLPAY KWAZULU NATAL (PTY) LTD ALLPAY MPUMALANGA (PTY) LTD ALLPAY LIMPOPO (PTY) LID ALLPAY NORTH WEST (PTY) {TD [ALLPAY NORTHERN CAPE (PTY) LTD MICAWBER 851 (PTY) LID IMcAwaeR 852 (PTY) LTD MICAWBER 853 (PIY) LTD IMICAWBER 854 (PTY) LTD nd ‘THE CHIEF EXECUTIVE OFFICER OF THE SOUTH AFRICAN SOCIAL SECURITY AGENCY THE SOUTH AFRICAN SOCIAL SECURITY AGENCY CASH PAYMASTER SERVICES (PTY) LID ETIDLUBHEDU INVESTMENT HOLDINGS (PTY) LTD FLASH SAVINGS AND CREDIT COOPERATIVE CASE CCT 48/13 Fist Applicant Second Applicant Third Applicant Fourth Applicant Fith Applicant sith Applicant Seventh Applicant Eighth Applicant Ninth Applicant Tenth Applicant Eleventh Applicant Twelth Applicant Thirleenth Applicant Fourteenth Applicant Fist Respondent Second Respondent Thee Respondent Fourth Respondent Fifth RespondentPage 2 ENLIGHTENED SECURTTY FORCE (PTY) LID sixth Respondent OBA COMM (PTY) LTD Seventh Respondent EMPILWENI PAYOUT SERVICES (PTY) 1D fight Respondent PENSION MANAGEMENT (PTY) LID Ninth Respondent IMASINGITA FINANCIAL SERVICES (PTY) 1D Tenth Respondent THE SOUTH AFRICAN POST OFFICE Beventh Respondent ROMAN PROTECTION SOLUTIONS CC ‘welth Respondent UBANK LIMITED ‘iteenth Respondent [AFRICAN RENAISSANCE INVESTMENT MANAGEMENT (PTY) LID Fourteenth Respondent STANDARD BANK GROUP LIMITED Fifeenth Respondent NEW SOLUTIONS (PTY) LTD siteenth Respondent ITHALA UMITED seventeenth Respondent KIS TECHNOLOGY SOLUTIONS CONSORTIUM —_Eighteenih Respondent “HE SOUTH AFRICAN RESERVE BANK Nineteenth Respondent THE PAYMENT ASSOCIATION OF SOUTH AFRICA Twentioth Responcient PROGRESS REPORT IN TERMS OF PARAGRAPH 4.1 OF THE ORDER "MADE BY THE CONSTITUTIONAL COURT ON 17 APRIL 2014 1. The decision taken by the Chief Execulive Officer of SASSA no! to ‘qword the tender for the payments of social grants was filed with Registrar of this Court on 15 October 2015.Pages In toms of paragraph 4. 1 of this Cout's order dated 17 Apal 2014, SASSA must within 14 days of is decision not to award the tender, siodge a report with the Registrar of this Cour setting out al the relevant inforaton on whether and when it wil be ready fo assume the duty fo pay grants its In her 2012 budget speech the Miniter of Social Development indicated that the contract for the payment of social grants, subsequent cwarded tothe thrdrespondent and thereafter set aside by this Honourable Cour, would be the final time that a third pty was contracted to effect the payment of social grants on SASSA's behalf cand that thereatterSASSA would perfor in fl is mandate in terms of the South Affican Social Secutly Agency Act, Act 9 of 2004. the impugned poyment contract was designed fo serve as a springboard for the future payment system for social assistance, The plan was for SASSA take over the contfol, administration and management of payment of the sociol grants by 2017 when the contract wih C25 expires. SASSA was fuher going fo pitts payment system during 2216. However, the finding of invality of the award of the lender to CPS and the new tender process ordered by this Court had the effect of re-drecting SASSA’s immediate focus and resources tothe running end. completion of the new tender process. SubsequentPage 4 {0 the decision not to award, SASSA is now in a position to again direct iis focus on taking over the payment of social grants. ‘To ensure the continued payment of social grants it should be noted that the social grants value chain includes the following 5,1. Application management: screening and attesting of each ‘opplicant, the enrolment of the applicant on the system, the actual capturing and vetfieation of the application on the system; 5.2. Payment Management: the processing of payments, actual payments fo beneficiaries and the reconciliation of payments; ‘ancl 53. Benoficiery Maintenance Management: the ife ceriication as \wellos the maintenance of the beneficiary data including grant reviows. Alline above functions, except the actual payment of social grants to beneficiaries andrelated functions, are akeady curently perforrned by SASSA. The payment functions ental the cctual processing and transfer ‘of cash fo the different beneficiary accounts, the aclual cash disbution to those beneficiaries who prefer fo receive their benefit in ‘cash; as well the reconctiation ater payment,Page 5 SASSA's initial plan to take responsibilty for payment of social grants was as follows: 7A. Phase 1 (2012-2014): Centralisation and improvement of integiily of the data which included collection of biometric data trom CPS. 7.2. Phase 2 (2014-2015): Taking over on-going enrolment process 73. Phase 3 (2013 - 2016): Developing SASSA in-house copabilly to manage payments and reconciliation. 7.4. Phase 4 (2016): Pilot of the new system in 2016. 7.5. Phase § (2017): Implementation tullrollout in 2017, ‘The takeover o' these functions requires SASSA to build its intemal copacily including the development of systems and processes: as well asthe recruitment of appropriate personnel. In order fo assit SASSA in the selection and implementation of the ‘appropiiate, most efficient and cost effective method of insitusienalsation of the payment of social granls, and the reaured personnel skils, the Minister of Social Development appointed an “Advisory Comnitice duting September 2014, to investigate and advise her on the appropriate system for payment of social grants. SASSA also10. Pages enisted the assistance of the Council for Scientific & Indushial Research {CSIg} and the National stitute for Smart Government (NSC), New Delhi, India, to advise on payment systems related and other issues regarding the insftulionalsation of the payment of social grants. In regord fo prase 1 refered fo in paragraph 7 above, the centralisation andimprovernent ofintegniy of he date which included collection of biometic data, has been achieved. SASSA was through the re-registration process, able to eslabish a centralised biomettic- based payment database of all beneficiaries (chien included! recipients end procuratoss; and has begun fo verity adult biometric dota against the National Population Register al the Depariment of Home affais. Phase 2. whichisthe toking over of on-going enrolment process, require of SASSA lo procure is own hardware and software for biomettic enrolment and verfcation. n arder to reduce fraudin the grant system by SASSA official (system Users) and beneficiaries, biomelic vettication anc authentication in the form of biomettic identity and access management for system users; and automated fingerptint identification and verification system for beneficiaries crical. SASSA has advertied a tender for biometric idenfly end access management fortssystem users. However in order to curb costs SASSA is seeking advice on whether the same hard and software could notPage 7 bbe ullised for beth biomeltic identity and access management for official; and automated fingerpiint identification ond verification system for beneficiaries. Phase 3, developing SASSA's inhouse capabilly (systems, processes «and skis) lo manage payments and reconcifation, has not yet begun ais SASSA ssl the process of reconciing tne recommendations by the Ministerial Advisory Commillee: NISG and CSIR to determine the appropriate approach to instilutionalising payment of grants, with respect to requied systems, skils and so forth, SASSA will aso continue consulting with slakeholders including the South Affican Reserve Bank (SARB); Payment Association of South Attica (PASA) and National Treasury. SASSA will therefore assume the duty fo itself lake over the payment of social grants, The table below depicts the system deliverablesreqvired for SASSA to take control of iis mandate, and the time frames applicable thereto: Integation of | MarchtoJune |Web based systems through | 2016 (pilot application intoarated web-based | phase} with mainframe jicatior application and other application | august 2016 ful | ict applications at the implementation | back-endPages 5 Warman ond [Wars BR TET hse Jucmews — |bonetemres ont iment ecco br 8 op comple croireriot | ociserzoi6 [bah sriom sr) 3 frames anor a07 Paes ocoara- cone 7 |Past Tey 17 — a TT, a Tendorcwerded Song Stentor res 2015 5 —ramear —foaaseranTneiomenavon croc 5—|ean ——foasasane[ooroae distibution and security Ihereot Jon -March | Contract with 2017 merchanis 7 [Card ssvanee | Oclober 2076— | Consultation with the and special | March 2017 | SARB, PASA and. bank accounts Goverment Printers by February 2016 14, Hishould be notec that there are those ancilary services or functions that SASSA Issill Io OUsUULY. These include card issuance, cath disributlon cond the secufity therect. It should also be noted thal the fime frames herein are dependent on the outcome of the consultations.OPINION for ‘SOUTH AFRICAN SOCIAL SECURITY AGENCY CONTRACT FOR THE PAYMENT OF SOCIAL GRANTS Winn Trongove SC ‘Suzannah Gowen Mini Sts Hanaine Drake 27 October 2016inrrooucTion 1. The Sout Atican Sra Secuny Agency (SASSA) has a contrac with Cash Paymaster ‘services (Ply) Limited (CPS) for the payment of social grants on is behall, The “constituional Cout declared the contract invalid bet suspended the declaration of lnvatiity forthe raion ofthe eorract until 31 March 2017 2. SASSA wants to tke over the payment function but wil not be ready te do So when the (CPS contac expres on 31 March 2017. needs more time to equip solo takeover the payment funeon. It proposes to enter nto an interim arrangement with CPS to continue paying the sail grants onthe same or similar basis 2s beoreto alow SASSA. sufcient tie to design end implementa new sytem for the payment of social grants 3, SASSA seeks acvce onthe question whether t may lawtlly enter inlo such an interim rangement with CPS and, if not, how it should acess the problem, THE FACTS, 4. SASSA awarded a fve year contrac to CPS forthe payment of social grants nationwide from 1 Api! 20121031 March 2017, 5. Somectt unsucesstl bidders forthe contract chalongod is vally because, they sal, he process by which it had been awarded had been flawed. Aer provactedBs Itigaton the Constuional Court upheld the challnge.* It deciared the contract inal but suspended its desaaton of nvaly on the flowing terms 5A 52. 6a, Itordered SASSA torn a naw tender process forthe payment of socal eras for fwe yeas. SASSA was obliged, fr the duration of the process, to fle quartety progress ropes wth the cout ‘The court suspended its decoration of invalty of the CPS conract uni ‘SASSA awarded the new contact SASSA dd not award anew contract, the cou’ delareton of invalty was ‘urhee suspended unl the expr ofthe contracts original ve year term on 31 March 2042. Within fourteen days oft decision not to award the contact, “SASSA was obiged to ladge a report withthe court setting out al the relevant intormator on whether and when tw be ready to assume the duty a pay the social gran tsa ‘SASSA ran anew competve tender process but nt receive ary compliant bids. desided on 15 Octaber 2015 nat o award a new contract ‘ipo Coscites eset lings CEO, SASA 2011) 4479 (C)10. " ‘SASSA reported tothe Constitutional Court on is decision on § November 2016. Isai ‘thatithad decided to lake over the payment function self Itset out he steps by which It proposed to doo inte to take oer fm CPS on exp ofits contact on 31 March art. “The Constittonal Ceut was sated wih SASSA's report and on 25 November 2015, docharged SASSA fom ts supervisory jurisdiction thas since then become apparent to SASSA that wil not be ready in time ote over the payment functor from CPS on tho expiy ofits contract atthe end of March next ‘year Htneeds more ime — years rather than montis ~ to design a new scheme for the payment of socia grants, to budget fort to putin place the necessary inestruture and to implement ‘We do not have day on the reasons for SABSAYE inability to make the destin, 1 ‘seems prudent o assume, howver, that SASSA has been remiss, either because its decision of October 2015 to go t alone ater March 2017 was over-opimisicin the fist place or because it has since then not been sufficient vigorous in the implementation ofits decision, \We accordingly assume that SASSA has bean remiss. This assumption underpins the emainder of our opinion. IF tis not cot, our adie bi upon it must also be ‘eeonsidered42, We are told that SASSA does not have ary che but to enter info an intern avangement wit CPS. Thore i inthe frst place not enugh time to run a competitive bidding process forthe appointment of @ new contactor inne to tke over aftr March 2017. There i inthe second place nobody elso who has the necessary infastructire in place to perform the payinents function or the core components of by March 2017 It would also not be ‘easbe fr anybody ese to create ther own infasructure without ‘ong term contractto recovers ost 48. CPS apparent wing to agree to an interim arrangement, We donot know, however, atthe terms are en whieh is prepared to make such an arrangement (WILL THE INTERIM ARPANGENENT BE LAWFUL? {14 Wmnen SASSA contacts for goods oF servees, tI generally oblige Yo do 80 by @ compeltive bidding process under the folowing provision: 441. Section 217(1) af the Consttuton provides th when an organ of stato contacts ‘or goods oF eervives, “i mast do so in accordance witha system which i fa, equitable, transparnt, compete and cost-effective” 442, SASSA is a pubic entity fated in Schedule 9A of the Pubse Finance Management Act tof 1989. Is board ists “accounting auton in tems of46. 16 ua, 1 49(2\a). The board is obiged, In terms of & 51(1(s)H, to ensure that [SASSA has and maining @ procurement system “which is far, equitable, transparent, campotive and cost effective” [As a public eniy, SASSA i algo subject fo the Treasury Regulstions promuigaice under the PEMA. Reguiation 16A regulates supply chain Imanagemert, Regulation 16A32(a) echoes the constitutional and statutory equeement that SASEA's supply chain management system must be “ai equitable, tonsparent, compettive and castertectve™ Rogulation 16A64 alows public bodies to depart from the general requirement of @ competitive bidding process in exceptional cases: “tr in 9 specie case it's impractical to ite competitive bids, the accounting coffee or axcountingauthoriy may procure tho requied goods or serzes by ‘ther means, provided that tho reasons for deviating frm inviting competive bids must be recorded and approved by the. ocounting authority Inthe SASSA cate, the Supreme Cout of Appeal described the basis forthis exception to the general lee folows: "The regulon permits an accountng officer othe chit executve officer fo tovlate fan competitive process aubject to condone .. is, hare mush be rations reasons for the decision, That a materia requirement. Second, the roasors have o be recoded. That sa formal requirement, The basis for those requiemonts Js obvious. Stole organs are as far as fancos areoncemed fst ofa accountable tothe Netonal Treasury forthe actions: Tho provision of wasons n wing ensues that Treasury I informed of wholover consbratons were taken info account in choosing @ particule source andl of lspensing wih competitve procurement process. This enables Treasury to determine wether there has been any Mancal misconduct and, 0, tao the necessary stops in trms of eg 38.° 17. Inthe RAF case, Patket J reviewed the general rule and this exception to it and concluded as flows vmat emorges tom the instruments that Ihave ciscussod & that, goeraly speaking, when the value ofthe fdr excoeds ROO 000 a compettve, pan precuromont procass must be flowed. iis only in exceptional rumstances thot deviation frm this nonn wil be justified, Those ckoumstances are urgent casas and cases of emergency. Poor plonning cannot meke a case an urgent ‘one or an aergency. 18, SASGA's own procurement poly reflects the same understanding in paragraph 43.5 “An emorgenoytugont case is whereby immediate acton is necassay inorder to avi a dangerous or ak situation, isry or want However alack of proper planning shout nt be used asa reason fr urgent of emorpeney case." Teo, aS ah Paste Sees 01 (1) S021 (C8 pra 2 > uber bn Seal uv Ran ecient Fd 2084) SA ABE] p7919. The exception under regulation 1848.4 s acordingly not open to SASSA inthis case is inability to run a cempetiive being process is not due to emergency or unforeseen Urgency, Its de insead io SASSAs own faut get ts ducks in a ow intime. 20, We considered whether SASSA might Be able to overcome the problem by agrecing vith CPS merely to exond tei existing conractrather thant erfer into a new contract, “such an agreement ll honever nat solve the problem forthe following reasons: 20.1. The Consitstonal Court has already held thatthe original procurement was Unlawful ang invalid. SASSA's contract wih CPS has thus far survived only Lnder the Constitutional Court's susponsion ofits declaration of vali. But the suspension expires on 31 March 2017, There wil then be nothing eto 20.2. SABSA is in any event required to employ a compatitve bidting process whenever itcontacs forthe procurement of goods and senices, Hl contract ‘wth OPS fr the procurement ofits serves even they agree ony to extend their existirg contract. The extension wil accordingly again be subject othe requiremert ofa compatiive bideng process 2, We conclue hat SASSA' propose inet agreement wth CPE wil not be lawHOW TO ADDRESS THE PROBLEN “The framework ofthe problem 22. Wehave concluded hal SASSA's proposed arrangement wth CPS willbe unlawful. We «ro fold, however, that SASSA does net have any other option. It cannot takeover the payment neti from CPS and cannot appoknt another contractor do so ater March 2017, To interup the payment of socal grants & not an opin. SASSA accordingly has no other option bt to ener into an interim arrangement with CPS: 28 Tho eally that SASSA may hava to ener into an naw arrangement with CPS stands instar const with its duties and those fits board. SASSA obviously has duty to actlavlly at alimss, Section S0(1() ofthe PEMA obliges its boardto ata a times infty, hones, intery ar in tho best inoests" of SASSA in managing Hs Sinan fas. 2k The Constuional Cout again emphasized the duty of organs of slate Yo act In ‘exemplary fashion najudgment handed down days 290: rns cout has effimed a fundamental principle tha the sale ‘should bo ‘exemplary in ts compliance withthe fundamental constutonal pice that proserbee clthels Vat i mere, io Khumalo, this court held thet stato uncionasies aro enjoined to uphold and protect the rua flaw By, inter aia, ooking te redress of er deparments’ unit decisions. Gora i the cty ofa state funcionary to rectfyanlawfuness. The courts have a duty2, 0 ‘toinsist mathe slate, inal ts dealings, eporates wii the confines ef the aw and, ino ding, remains accountable fo those on whose behalf il exercises pomor. Publ fanconeras must, whore faced with an iegulentyin tho pubic xininistation, inthe context of employment or otherwise, seek fo redress i Nat to do £0 may spawn centision and conf, fo the detriment of the acininistation and the pub ‘The question fs thushow SASSA should square the iy at nas to enter into an Lute rangement with CPS, on the one hand, with is dues to act Lely in ‘exemplary fashion all tes, on he other. Find a rapid solution 2 ‘We ae of he view that SASSA shoul, st stap, minimise the extant to which it might be vecessar to ener nto an unlawful rangement with CPS, both in duration ‘and soope. It shoul! ha an acceptable way of legaising the payment of social grants ‘on a satistatory baeis as soon as possibie. {We do not know wtat the most satisactory rapid solution tothe problem might be, We can marly say tal seems tous unreasonable for SASSA to cing tos decision to go ILaione by paying sci grants ott wl eauso une delay in puting the payment ofsocil grants. on alawulfoting. For instance, SASSA can run a competive icing ersten Gy Loca Moncey stan 20162035 (24 cee 2016 prn process and havea new contractor in place in, say, one year rom now, then it woul n ‘our view be unreasonable o contin wih the unlawful srrangement with GPS fortwo cor three years only because SASSA requis that ime to equip za to go alone. 28. SASSA isin our view obliged, within reason, to minimise the duration of unawil arrangement wih CS, i needs be by runing @ compelive bidding process and painting a new contactor without delay. ‘Apply for Treasury approval 28. SASSA should apply for National Treasury approval in tems of paragraph 8.5 of National Te jury Instruction 3 of 2016 12017. 1 requires prior National Treasury approval for deviatns fram nermal bidding provesses based on grounds other than ‘emergency orsole supper tats, This nstrucon Is binding in terms of section 7B(4N0) ofthe PEMA, It says hat Treasury wil only alow such deviations in exceptional cases Speak to CPS 30. SASSA should spesk to CPS to fed out whether iis prepared to agre to an interim arrangement nat vortices pay the social grata on the camo trme a before oF sini terms that int the scope of CPS's function. Its nt wling to do 80, or oly at fan excessive price, SASSA would have to reconsider the iter arrangement atlogetner2 Make fll disclosure upfront 31. SASSA should also, without delay, report tothe National Treasury and the Audio Genoralin tors of paragraph 4.35 ofits procurement policy hat tintends o enter into ‘the interim arrangement vith CPS without a comptive bidding proces, 132, SASGA should, in our view, make the same report tothe Constutinal Cour. is no longer under any feral duty todo 0 but, in our wow, ts radial departure from the plan placed before the cout by Rs rept of 5 November 2015 requires that SASSA disclose to the Constitutional Court that proposes oenterinto a further arangement wth CPS. ‘SASSA should dive the report nat only othe cour itself, but als toa the paris to the Alpay tigation 138, We suggest that SASSA make these disclosures wihout delay so that hose to whom the dsclosures are made, have an oppartunity to obec and propose iterative. they have any, before SASSA commits sft the inlerim arrangement wth CPS. I should say ns reports to Treasury, the Audtor-General and the Constitutional Court that & proposes to entrino the temparaty arrangement ith CPS bya stipulated date to alow {or objections and aternatve suggestions before it coms itself fo CPS,2 Make the Interim serangonent with CPS 4 If credible objections are raised and viable alematve solitons proposed, SASSA should obvious consider them, We suspect, however, that here wil be none. In that event It should enter nfo te proposed interim arrangement with OPS. Their agreement shoul te caret alored o allow SASSA sufent ime to pt an alterative soluton in place but not un ay longer than tha Wim Trengove SC ‘Susannah Gowen Midst Stubbs Hani Drake Chambers Senaion 27 October 2016REFERENCE: RFI 01/2016 Cc | REQUEST FOR INFORMATION DESCRIPTION: | SOCIAL GRANT PAYMENT AND BANKING SERVICES. DATE ISSUED: 9"" December 2016. CLOSING DATE: 10" February 2016. | TENDER BOX: SASSA HOUSE 501 Prodinsa Building, Cnr Steve Biko and Pretorius Streets, Pretoria.Table of Contents 1. WWRRODUCTON. - 2, Overview of SASS, 2.1, SASSAMandate 22, SHSSAVon. 23. SASSAMsion - 2A, Ours _ 25, Our Main Goats, O¥Fetes and Desired Outcomes. 3. PURPOSE - 44 LEGISLATIVE REGULATORY FRAMEWORK. 4A. SASSALEGISLATION oc : = 412. PROCUREMENT LEGISLATION 43, BANKING ANO PAMUENT DUSTRY REGULATIONS B LEGLATION... 5, COMPULSORY BRIEFINGSESSION 6. Business REQUIREMENTS. 61. BACKGROUND. 62. Integrated Get ination & Payment Framework = 63, CARD BODY PRODUCTION & DISTIBUTION 164. SOGAL GRANT PAYMENT CARO: PAYMENT SERVICE PROVIDER. 65. SOCIAL GRANT PAYMENT CARD: ACCOUNT MANAGEMENT. 466, CAS DISTRLTICN AND PRY-POINT MANAGEMENT. 667, BIOMETRIC PROOF OF LF 68. INTEGRATED isk MANAGEMENT & CYBER ASSURANCE 71 Minimuny D2CUMENTETION REQUIRED... 8, SPECIAL CONDITIONS OFTHIS A - a, AESERUATION OF RIGHTS a a as a8 a81. INTRODUCTION 2} The South Akan Soil Seeuty Ageney (SASS) i responsible fr the management, ‘Zsnstration and payment of Sova Rsetance, SASSA Sestablshed in terms of te South [an Soil secur gency Ae 208 (Act No of 2008), and ia schedule 3A pb ent Under the Publ Finance Management Ae, 199 At 1 of 995) (PFA). 1b) SASSA i mandated to contibute to governments plan of action to address poverty sieviaton wie pont secioeconomic growth, development andjob eaten. Trowsh ‘the ital ota proving social asistance grants )Thecore business of he South Aca Soca Soeur Agony (SASS) to administer, ance Spay soil secon rants The Agnes equled to do the following 1) Develop and imslement paces, programas, standard operating procedures and fystems for anef tant and effectvesocal sistance benefits adminstaton syste 1) Desve inovative and eosteectve eins to Benois ard potential bevels through mil sees channels in) Pay the et ran tothe ight person at there tinea pace. 4 SASSA sis to dle quay and comprehensive social seurty sence in partnership with rorgovernmental community bse ath bated organisations, business, and cl ocey ‘tretues and abou movement, Asatte summary of sci stetance rant an the footprint in Sath Ac i provided Inthe regions (pons) of South lic which are: Easter Cape (EC), Fee tote (5), CCauteng (3H, Kwazls Natal (KEN), Unpopo (LP), Meumalarga (MF), North West (NW), Nerthern cape (NC) and Wester Cape (CI. Socal asstence grants lcd: Old Age gran ONG}, War Veterans grant (WG), Disabity {ran (0G), Gront nA (GA) Chl Suppor erent CS), Foster Chil grant FI) an Cre Dependency gant (6) “Table shows the statu quocof sci grants ast 31 March 2016. “Yble 4: Total numoer of soci grants by grant typo and opin sat 8 March 2016, ‘ta ype rayon | one [wwe] 06a | ene roo Tt seer] a0 | rasa | sort roeri| moor 27s pe [cierasr| =| — Toate | arr oreo naan ran Fer [cevarar|—ee| —stiaan [aso ste a1 2580 New| eisose| so | anzara| a7soe | zn | tones | zansars | note ip omiire| | ahaa [ange aco] szare| tua | amosee Ne —_staer| — 0 | —aba00 [rit ‘siamo | «ASI6 [ee ‘zaar| .r0s000 wwe [amar | as [aoa [sa vents | 12520 ox [ caer [as | Tang | 17 8 siarzo0n| T6sB1 aH g ;Flew cows the retrial rants rom 3 uh 205 034 March 2016 Flgue 1 Totl numb of sot gants Selb a 4) Thee functions of SASS are the adnlastration and payment of soci grants and incde: 1) The procesingotappicatons for socal rans; 1). Veriton and approval of aplations; ii) Ongoing eileen eviews of benefcaries; 1a) Disburserant an payment of rant to eile beneficiaries; and Quality service since ensuring compllanc wth norms and standards and vi) Froud prevention and detection 1) SASSA takes fll resronsiity and subsequent rele ful onto forthe payment ofa Sod Asstanc Gave Terespondents shoul take ths na consideration to ensbleSASSA To exeree te mandeted respons effecvelk, 1) SA854 thorefore nde information fem gotentl service providers to ensure thatthe proposed alton des not only aresax SASS respons, ut ao takes advantage of Ernting and payer! inovalon and capbities nthe Industry that wil enable SASSA to achiev ts totes tent, 1) The respondnts must provide Information regard the ston they propose in terms of ow they woud when implementing ther popored soon ensure that doesnot rp the ongoing payment of Socal Astance to curet Grant Senefcies. 1) The resumen ao take ita acount the phased ransltonal migration away rom the Tnaumbent service raider (Cs hat required to Tae place and the subsequent ned for the incoming servis provider o operate a transitional environment with the outgoing sence providers. 1) inal the respondent resulted to rezpond to atleast ope oral ofthe sctons 6.3 1068 inthis A ed all respondents must espond te section 6 eter in terms of how they wil rovle series o negate facta steration other proposed processes and syste.2. Overview of SASSA 2a. 22. 24, SASSA Mandate The mandate ofthe Agency Isto ensure the provsion of comprehensive soil secur eee gens betel nd poverty win the constitutional ard eglate framework Social asitance At 2008 ‘ho Act coves national esti framework or the provonof erent types of soci rant, socal rele of distress, the dlvery of soil asstance grants bya national Agen) lind the etablshren’ ofan nspectratefor Sori ecu south Afican Sci SearityAgeney Rt 2008 ‘the Act provides forthe establishment ofthe South Afcan Soci Secanty Agen a6 3 Schedule 3h pbb ety In tens ofthe PFMA. The principle alm ofthe Act to make ronson forthe eerie management, adinsraton and payment ofsocal asstonce and vce though the eteblshment ofthe South ian Soil ecurty Abeer. The President ‘ened the Det onthe 28th May 2008, SASSA Vision To become a wold ade in the delary of scl secrky serves SASSA Mission ‘To adminater qualty customer-centric soda secunty services to elie and potential benefice Our Values ‘SASS aba public erty subscribes ta thor values that promote demacracy ad a eke ot espeatfor human ets In adton, n bull social ehesion, the folowing values are paramount: “eanspareney uty ety onfideiay Caster Cae Centred Approach “the value gropotton wil require continuous refinement in order to satis and meet Customer neds and expectations. The espenseness of SASSA to community needs and Cinerations may rete alustment i espoet of service delve. formation technology nd admieative process,25, Our Main Goals, Objectives and Desired Outcomes 4} The objectives of SASA at sat utin th SASA At 2008 (Act 9 of 2008) are: 1) To be the sole agent that wil ensure the efflent and effectve management, iinstration ard payment of Social Acistance 1) To seve as an aint for the prospective admlistration and payment of See Seca and i) Render series lating such payments. 1b) Im pursance of thse objectives, SASSA sees to |) take responsbty forthe administration and payment of Social Asstanee: 1) deve quality Sc Asitance series in anlntgrated manner that seffient and cost eect; |i) bebe to pay the it Seefilay, the sight gon at he it me an pce Nol Iv) ave s payment system that duces fraud and corupin; and «)teansion towards ensuring poo fe fal enofiares ono before payment 3. PURPOSE “he purpose ofthis requestor nformation (RF st asst SAA n formating an optimised owes for Propoal RFP" andtofonnuate a requirement specification that takes cognsent of the ment marie incommeral and technzl terms. ASSA may also use this Fas the basis fr nimi ony" RFP anda ach ASSA stony advises that all serie providers tering to ‘respond othe forthcoming? shoul respond toh RF4. LEGISLATIVE & REGULATORY FRAMEWORK 41, SASSA LEGISLATION. “The Respondont shou be fei wit ll eleva lltion Inuding ut not ite to {Asin Ae and ater lesion apple i the Republic of South Aiea and should fly empy ith such 2. PROCUREMENT LEGISLATION SASSA has a date evasion methodology premised on Treasury Regulation 153, ‘romugatd under Scion 76 ofthe Pub Fiance Managemen At, 1999 (Act No.3 of {otp the Petre Procurement Ply Framework Ac, 2000 (Act No.5 of 2000) ar the trond Bare Black tonic Empowerment Act, 203 (Act No. 3 of 2003 14.3, BANKING AND PAYMENT INDUSTRY REGULATIONS & LEGISLATION. The fespondent shoud be fier wth al leant equation and legtion inthe Baking Parmer intry ard al propoved soins should be fly compliant except for where Innovations reauite reasonable equest fr exemptions '5, COMPULSORY BRIEFING SESSION "pcompulory fig session le held to clarify the scope and extent of information required conde respon ay questions Hom respondents. The bing sesin wile eld at Sothem Sun Pretoria, Ge Stevo Bk and Preto Streets, Aca, Pretoria and wil be helon the 13 January 2017 at 12800, ‘he fllowing acts a dates have been efor thi dverisement of Rin Covermant Tender Bulletin 'P December 2016 Datbuton of AF documents on SASSAwebste and advertisement in 9 December 236 newspapers Compulzory Bling eon 13° Janwory20%7 ‘hestions reiting to BF tom prospective Respondents 1° paar 2017 Ft submision lesing cate 10 February 2017 Request for Presentation 20" Febroary 2017 ‘times enn this Fae in South can Standard Tne and ar, along with dates, sje ‘Change at ASs8 daetion. referee tomer date does not ereate: 1+ amobligation on the part of 958A 0 ake wo, «any ah for ny Respond to demand hat action be taken on 2 spe dateor at specie te he Reapandert accepts tht, # SASSA extends the csing date fr submissions for ay Tewson the requerent of his wil others apply equal tothe extended dean.6, BUSINESS REQUIREMENTS 6a, 62. BACKGROUND “he South Aca Soil Securty Agney (SASS) was established under the SASSA Act of oot, wth the abet of ensuring efit and effective management, amination snd payment of vcd asetance.SASSAcurenty pays over ili amt o ove 17 milion onetdales In support of the goverment cl for Hhanclincsion, SASSA wants to evar that al benefidaries have ares othe South Arian Nationa Payment System. For SASSA to heed th ll partnerships with Fnancal and Technology astutos to ensure portipton of beneioes inthe banking and payment stems are crital Fnncal natin and Payment Serie Providers withus be required to extend their cre reach “nd offer exible pment authentication mechanism (28 optional CVM methods stead of PIN ont) and prvi payment management ard reconcilation information tat enables assay the igtsocl rant to the ght person attherght time. The agency therefore Tvs all interested final inetttions an Payment Sence Providers who wish to pariipat nthe prodson of barking serves, ayment management ad reconcation of ot pnts to SASS, to provide the organisation wth the following infomation Integrated Grant Administration & Payment Framework ‘ti imperative that he respondent in rephingto ay of the sections in secton 6310 68 below tke fl cagnsance ofthe nee to lnteyrate of provide te meas for SASSA adits envze roiderstoteratetotheirservoes,procesesandsystems where necessary, SASSA Intend opeform ful FCA compliant biometric enrolment ered against Home Afais National Population git (NPR) uring officers who are also trusted commoners of oath Undies to iterate this activity with the payment cad and accountssuance process such that the Benefcry ele to app for = gant have it approved and then provsoned a payment car rm the same desk none steamed process SASSA a intends to mange trothervse contolosnge telephone number tobe placed onthe card that wit hone grant ‘amination od payment queries and easomer care and support «routing cals where ecesayt serie providers vis an Onn-chanel contact conte ante based ster To schove tis SASA requires al service rovers to demonstrate how thei servis will Integrate to or these provi interfaces for ASSA processes and systems whee required5.3. CARD BODY PRODJCHION & DISTRIBUTION 1) SASSA requires a sie provider to evbmit information on how they ean support the ‘organisation wth Cre Body Production and Distbtion 2} The servic provider in (1) to provide » ” 1) card tock Manogement. Manage SASA cat stock and associated materi for Production. 1 cad ae Plast. Suoply SASS ead base ples: and asocated materials for Froition at ‘compotitve prices i) EMV Card Embossing and Personals, rapa produce card with gh levels of eletronicEMY Cippersonaization ‘anf should inde contac anid contactless. rane and whit label ards. The foltian must be able to tera easy with personalization data sources tid: party bureaus and data warehouses, ord Dstbuton Seamlesly negate wth distribution partners to ensure imeousydstributon of SASSAcards tothe allocated SASS ranches. Card roduct development ‘ard Traskand Trace function provide rack nd race busines neon for SASSA to race card orders and Aten, "0 Pesormance Cpt card pesonaleation volumes pr hours 1) Card praction per hour doy |) CardBody Stock volumes per order IM card Dirbation pec houray 1) Thmetemet for [Mv Blometies suing costing Stuctue: Please provide Inet costing and or models together with cost forecasting orbah 3 ear and 5-year contrac lung whererelevant any otber costing including integration, operation and maintenance, a} The Costing Structure ut incae tensed breakdown incudingbut not ited tr 1) Card ae Plastic Cost iy CardPeeonalsation Cost 1) CardPrduction Cost i) Patras 1) Integaton Cost, Wi) Track Tac Cost, vi) Once of Cont64. SOCIAL GRANT PAYMENT CARD: PAYMENT SERVICE PROVIDER, 1) SASSArequites a service provider to submit information on how they can suppor the ‘reaisaton wth qultyof Payment sevice that mets bath the requlrements ofthe payment beneficiary and SASSA operational equvements and constras. 2) Theservce prover in (2) mus provide a siglo intgraed platform fo: 1) series fr aceepfingBlomatriay enabled electronic payments by 2 variety of ‘iment channels together wth Biometslc Management to effectively store, ‘consume an proces Biometric information. Ihe obit to connect to mule banks and payment networks fr transaction roves ta) le Based Transaction Managertentto manage when and what transactions an tect tus providing SASSA and card older increase! evel of secuty and tent Iv) Card Rsk Management fr atv frau and isk prevention, Real tne Recontiation and Reporting ‘i) EMV processing nd eriting untionaties ‘i EMV Card Authorzation (OMA) for EMV eryptoram processing Vi) EMV Cad Issuing for sing EN chip cards in SASSA ranches. The slaton needs to be able to Integrate ito the SASSA core admiration platform to mabe an integrated Grant administration business uncon i) Tranacton Gea 1) Account Balance Stanin Serve to prove 9 backup fr SASSA should the ‘Sonking ster be finer unabeto proces transaction request. 1) Network Monitoring to provide SASS the required information on the sate of payment opecations. sin Card tee, Management to actively and effectively manage the SASSA psymont card during thr fey si) Gad Trrscton Management to manage ad provide information onthe SASSA payee tranaction behav si ArMand POS Management must enable SASSA to rollout and manege ATM and POS hardvare/softwore in tratepie laces 2s determine by SASSA onan engin basi snd Send Grant and Payment related formation as SMS otfctions to benefice. svi in Maragement for EN card enablement fi) KeyManagement for EM card enablement. i) Keep Transaction act rls for aut purposes {in Haves nd ea inelnirace ointgate ito the SASSASuront an ie ‘Grant Administration and Patan environment o enable and inegrate a Grant ‘Admintration and Payment business function that wil anston over tine 0 Support SASSA m pesforning a increas ate role in the Payment Value se) Contingency plans to ava sruptons and ensure busines contin. 10‘iy AMS provi data beyation and or seca to business ant nperationsl Inttigenr for the purpose of anal, montoring, and evaluation of performane, ek and complance management 43) The see prover in 1} must provide transactional card with biome capably n Compliance wth te National Payment Sjstem spcifatlons and transaction ues ") Incorpotate inoration fr cobrandig ofthe card with ASSA 1) Incorporate iefrmation for ad lsunce within the SASS service ois, where ‘beneficinyenrolment thos place. |) tncorporte the posit of using Biometric data provided by SASSA onto the 4) esformance apse: i) Moimusn thr put (Transactions pe second) 1 Candisura pr day 1) Time to fest production card iv) Time to rat for NY Bometris Processing 5) Coming Srucuc: Please provide indicative costing and or models together wth cost forecosting for toth a3 yeor and S-year contact Indi where relevant anyother ‘eating including integration, operation and maintenance. 3). The costing uct most hae Hemsed breakdown including ba ot ied: 1) Transaction Cost 1) Prcesing Cost fi) tegration cost acon costs 1) Coet peels W) Once otcosts 65. SOCIAL GRANT PAYMENT CARD: ACCOUNT MANAGEMENT, SASS requies 8 sevice prvder to submit information on how they can support the ‘rsntation with banking sev (Specaldabursement and holding acount). 1) The numberof pedal disbursement accounts an rage from any number upto 20min 1) The special dsbursement accounts should enable benefiares to transact clectrnaly and witha cash i equed 1a) the bank to provide formation with regards to the suitable account ype, related charges and transactional capable. The reuled spec dbursemert axount sould not beable to do any db orders Ear debit orders o any stop orders, transactions or deposit taking other than the depots ofa socal assistance grant v)SASSA should have full account access privlges tothe Special aburserent account information uw3 ” si) The Sle an promotion of any ood, ancl somieesproducts recension fered prohbted except where expretedinwitingby SASSA and subject to SASSA tems and condition thereat. i Preferably Speci abursement accounts tet fll undor FCA KYC Exceptions on. _ai Service providers to te that most ofthe benetcaris that SASSA supports are Inthe loner 1M bands, anid may not afford exovant account manegement an tranactional hares ie) rst that the rit person pai the ght mount tthe it tine -anyere on the ‘open loop” network of the rational payment system or designated Cased lop network requlred by SASSA on an ongoing bass 1} Amend th lenin on he account fom tn to tne upon instution Frm SHSSA and fo achieve such changes within a reasonable timeframe. 2) The ctanbation also requires a service prouder (1 to provide Mt with an interes bearing ecount ty (SSSA Holding count tat canbe used to depos age sums of grant funds requed to service the beneioares whose accounts re edna bank. i) Service provides to propose account facity that wil enable the transfer of stlocated Socal gant funds om National Treasury to SASSA Holding Account, (i) Automate transer of» grant due toa beneficiary, as pe the SASSA payne ‘locate fl, rom the SASSA main acount deserted in 2) 0 the beneficiary’ “account desrbed I (1} yp presentation ofthe bene card forthe fist, transaction of the month which could be of any type - performed by the beneficiry, nether words, the fst ansacton ofthe month riggers transfer ct tunstvom main account ta bunefary account ony the benicar details ‘sopra the SASS allocation le {89 Account Reconiiion 2} The enanistinalso equcesserce prover in 1 to beable to provi transaction earn 4) The onpanisotionalso requires sence provider in (1) tobea South Afcan Reserve Bank IntrtankSettlenentpartcpant Pestormance Capabilities |) Maxum thn at Crarsactons per second) 1 Accounts sue Fer day 1) Tne oft reduction account ‘estngstctre Pees prvi inatine cating andor modes together with cot oreating for bath 23 year and S-ye cmtact including whee relevant any ater costing ick Integration operation a maintenance a} The Casting rote mut nce kemzed breakdown Incudng but noted to 1) Account Costs 1) Taneaction cous a) Oneeottcoss 266.6. CASH DISTRIBUTION AND PaY-POINT MANAGEMENT oh EASA rete serce ponder to submit infrmatn on how they an SUDO Sraneaton wih Cash Destaton ond Pa-plt Management under unane 2 sree conttnsm acordance wav Batho Pl icles ad th ined roms at standards of SAA 2) ‘asst prove thfolovingseves Inert nal te Serve Prove ne sent aecordance wth he ASSA requerets whereby SASS the {olowinginformation ona monty bas: 1) Payer le ‘inement fils setbeforethe st weekend ofeach monthand indents what the beniaris are et for that patel month iy Payment Schedule Indates tha Payment schedule i) Cosh on ejections. tndate th Cash low Projections fr that parla month 3) The sence reir in (1) must be able: i detecaso Beneficiaries anor rocurtrs touth designate Bom aahed po Pits in occordance withthe Payment Sebel prvided By SASSA 1) ungetbe SSSA branded Payment Cards to let payments o Beefs and orPrearator a desiated Someta Eat Cash ay poet according [rower of pitty based on biometric entation uy rome secu services atthe designated Biometry Enable Pay Pos 1) emus andsecure payne conatin for eneficeswhoare75yearsand ver disabled, fal andor lncapactatd, which may incude payment inthe aan of thei bres or iitatlons, where equred and duly authorised WY sassh 1) Reo cah eeved, cash pal out and cath re-depested athe em of ea, Payment Day Trawe quick turaround tne for sees. The Service provider must provide 8 tate anagement pln to ese tat Benfclaries do not spend extended psi in queue at desgrted cash Py Pols «a Recenclepayments made agaist the Paymet leona dy bas for SASSA cormiateon a westy and monty bas, ator appropriate or eeping ad transaction Data sey poser. wa teop Tramacton aul tals for aut purposes to esire dete repos acing the place tee, date andthe person wars a) Hoe det realtime interface nefte Into the SASSA core administration rrrnr we cneble on integrated rant amination busines Function with fealtie formation, sa Coninganc ples to aot irupions and ene usnss contin at Pa pots scheduled payment dts tre tnt are ay ecg an ave ae tas ad wear 2 urifm,HEAD OFFICE in vat om x82 Alcoa, Prt 08S sassa “See Mr Lungisa Fuze Director General Notional Treasury Private Bag X115, Pretoria 04 Altontion: Chi Procurenent Officer RE: PROCUREMENT OF THE SOCIAL GRANTS PAYMENT SERVICES BEYOND 31 MARCH 2017 4. BACKGROUND 1A, The latter serves to request the National Treasury's support to extend the ‘existing contract with Cash Paymaster Services (CPS) to pay social assistance bevels 41.2, 1 refer to our previous discussions and subsequent mectings of the fctalishod technical team regarding the South AMfcan Social Securty ‘Agency's plan relating tothe payment of social grants upon the expiry ofits contract wilh Cash Paymaster Services (CPS), which isthe curent payment service provider. 43, The Departments advised tha the contract between SASSA and CPS on the payment of sccal grants willbe expiring on tho Sst March 2017 and it has Since became apparent that CAESA wil not bo ready to take over the payment funcion from CPS upon the expiry of the Contract 25 inal ‘nvisaged.4.4, Its also raquested that National Treasury - Offie ofthe Chief Procurement (ice considers and approve a deviation from competitive bidding process ‘and nogotiats t appoint CPS for a new phase out! phase in contract for & potiod of at lees 12 and maximum 18 monthe (01 April 2017 to 31 Octobor 2018) 4.5. SASSA awarded a fve year contract to Cash Paymaster Sarvices (CPS) for the payment of social grants nationwide from 1 April 2012 to 31 March 2017 (Cte Contract’). The validity of the contract was challenged by some of the Unsuccessful bidders and after protracted Iigation the Constitutional Court (Che Cour’ upheld the challenge. 1.6. Inuphoiding the challenge the Court ordered that inter alfa SASSA run @ new tender process and that SASSA must filo a ropert with the Court setting out ‘al tho relovant infrmation an whether and when it wil be ready to assume the duty. to pay grants itself should pot award a contracttendor." 4.7. Therefore the dalartion of invality ofthe Contract was suspended pending 'SASSA's decison to award anew lender after completion of the tender process, In the event of SAGA not awarding @ new tender, the sald declaration of validity was futher suspended unl the expiry of the Contract (on 31 March 2017, 118, SASSA ran @ now compotiive tender process bul did not roccive any compliant bide and on 15 October 2015, SASSA decided rot to award a now contract and reported its decision to the Court on § Novermber 2015 by fling the required repr! othe Court (the Progress Repo”) 1.9. The Progress Report by SASSA sat out the steps in terms of which SASSA, proposed to assume tho duty to take aver the payment funetion itself ater 31 March 2017. The Prograss Repor is enclosod heroin marked ‘Annexure A. 41.40. Pursuant to thefling of the Progress Report, the Court issued an order on 25 November 2016, in terme of which tho Court stated Ite eaitaction wlth SASSA's Prograss Report and as auch the Court discharged its supervisory juredition over SASSA on this matter. The order dated 25 November 2015 Is fenclosad herevith and marked ‘Annexure B "Ay Consaicated Investment Heelags vCEO, SASSA 2014 (4) SA 179(CC)aun 44, 'A Ministerial Advisory Commitee was appointed by the Minister which supported SASSA's intention for the payment systom to be developed in- house, The committee furher recommended thal the worktreams be ‘established to ‘eciitate the Insourcing process. The work sireams wece to dovelop mechenisms to implement the report from the Ministerial Advieory Committ. The work seams wore lo b established as fellows: 1.111. Legislative and Policy Requirement Management 1.41.2. Infornation and Business System Management 1.41.3, Human Resources and capacity bulking 4.41.4. Demagraphies and Local Economic Development 1.41.5. Charge end Stakeholder Management 1416. Banking Services ‘The folowing work-steams were appointed towards the end of 2016: Information ani Business Management, Banking Services and Project Management Ofice, Legislative and Policy Requiremanis Menagomani and Benefis and Lccal Economic Development. These work-siroams have sina then flashed oi the advicary committos’s proposal and developed a project plan and premnaty costing fr the projec. must be noted that SASSA as yet to appoint Human Resources and capacty building and also Change and ‘Sakoboldor Management work streams. However, the due process is Underway. Itis mportant fo finalise the appointment, proposals and adoption of te said repos for seamiess implementation of fture payment model. (One ofthe cra elements forthe bones disbursement and payments was tha consideraticn and use of biometics given that almost 4 millon (40%) of SASSA benefichries recolve benefs through biometric option. This option is largely uted by aged and disabled beneficiaries in terms of an exemption provided by ho South Afican Reserve Bank as well as the beneficiaries who collec thor gras in cash at cash pay point Tho romaining 60% (in excess (of 6 milion) ofthe beneficiaries acoasses benefits using PIN code. Given tis scenario, i was crieal that on consideration of the SASSA future payment ‘made, the use of biometrics and the davelopment or adoption of a national biometi standed remain central It can be sald now thet SASSA was the catalyst for the development and adoption ofthe biometric standards by the banking Indust. Biametias have boon accepted 2s the backbone for the payment system in South Aca. To achieve this SASSA had to engage with different stakeholders, including the CSIR, which assisted with developing intial specifications for a national standard. This work was then taken on by PASA, resulting in national standards being accoptd. 3148. SASSA advertsed a tender for identity and access management, uiiliing biometrics, which was not awarded due fo non-responsive Bids. The RFP ro advertisement done on the 8th December 2016 with a closing date of 7 February 2017. This tender, f awarded, wll assist SASSA forthe blometic ‘cess and idextty management ofboth staff and beneficiaries, and wil form the cor ofthe siometvic enrolment process, which SASSA wil manage going forwar 1.16, Another citcal project linked to the Insourcing of payments was Merchants sutabity assessments ~ tis project was concluded recently (August 2016 — January 2017) A significant number of the beneficiaries receive thelr payments through point of sale devices at various merchants, therefore ik was, important to assess merchants’ suitability for @ continued, rect reltionship wih SASSA and not through the service provider, Currently the service provider contracts the merchants, moaning that SASSA cannot intervene it ‘here are chalenges with merchants soting their wom criteria before beneficiaries can access their money. Beneficiaries should have the freedom to access thelr Benois etter trom the banks, ATA network, an accredited merchants or though the 9917 cash pay points across the county 1.17. Furthermore SASSA had to explore options forthe payment of grants by considering ullsing Goveenmant Printing Werks (GPW) for the production and dstrbuton of the SASSA payment card: the South African Post Office (SAPO) for elemeris of payment of grants and the utilization of open architecture where different banks were tobe eonsidere. 2, THE PROPOSED INTERIM ARRANGEMENT WITH CPS 241. In order to avcid the risk of non-compliance to SASSA's constitutional ‘mandate, and also violating the social grant benofearos fundamental right of access fo sotial assistance, SASSA Is of the view it should procare the sorvies of OPS as an interim arrangement (phason phase-oul) while ‘completing the procurement process already underway. 2.2, SASSA Is generaly obliged to contract for services by way of a competitive Diding process in terms ofthe Constitution ofthe Republic of South Attica, 1996, the Public Finance Managomont Ast 7 of 4009 (he PFMAY) si Treasury Regulalons. However, in view ofthe fat that there is not enough lime to run 8 competitive bidding process for the appointment of a new contractor in time to take over from CPS alter March 2017, SASSA has no holee but to enter Into an interim rangement wilh CPS without a competive bidding process,23, 24, “This interim arangoment shall see CPS being phased out of the payment function in incremental phases. The final resuit being that at the end of 2018, ‘SASSA shall have taken over the payment function tram CPS in totally. This Proposed futur plan is endosed herein and marked ‘Annexure C’. The interim arrangement with CPS wil be concluded in terms of Regulation 16A 6.4 ofthe PFMA. In adtion to engaging CPS, the proposed Interim arrangement involves an extension of the Ife of the curont SASSA beneficiary payment card iis ‘envisaged that the interim arrangemert wil endure for a period of not less than 12 monthsbut net more than 18 months. 3. CONSIDERATIONS WADE AND STEPS TAKEN BY SASSA TO DATE 34 Prior to concluting on entering ino an interim arrangement with CPS, SABSA {together with stakeholders, evaluate the risks associated vith enuring that ‘rants are paid on 1 Apri 2017 and In doing a the following are options which were taken ino consideration: 3.41. Option 4: Procuring the service from the current service provider (i. the proposed interim arrangement '812. Option 2: Pocuing the service fom the Bank that services the majority ‘ofthe bereficiros (i. Grndrod Bank), 3.4.8. Option 3: Procuring the services of all banks wishing to comply with ‘SASSA requirements; 8.14, Option 4: Procuring the services of all banks wishing to comply with SASSA requirements for those beneficiaries who have access 10 ‘banking ifastructure, and procuring the services ofa service provider for grant recipionts who are eure using cash pay points; 3.4.8. Option 6: Procuring the senoes of the South Atloan Past Office; and 3.48. Option 6: Appointing a service provider for cash distribution to grant recipies who are currently using cash pay points and ublsng exiting bank accounts to dsburse grants through the banking sector to those bbneficiarie wth bark aooount. Tho similar to option 4 but involve ‘4 communeation campaign for beneficiaries to come ferward with tele bank accounts as opposed toa procurement process with banks (1. a banking scution as opposed to 8 procurement soliton)32. 33. 34, 36. 36. (On evaluation ef the above options, only option 1 soeme feasible and could fuarantee dissursement of social assisiance benefits with minimal challenges. However, SASSA is inthe process of implementing option 6, a8 this option wil factliate the phasing out ofthe service provider (CPS). To that ‘offect, SASSA will provide a separate submission autining the projec plan for ‘options 6. Such plan will emanate from the closer of the RF, which closes on the 10th Februsry 2017 ‘SASSA pays cesh through 9917 pay points, which are sorviced over the frst 12 working days of each month. There Is @ payment schedule which is ‘worked out in advance and provided to all stakeholders ~ community leaders and regional reoresentatives, as communty facities which are used as pay points have to Le booked. Sacury is also aligned fo this schedule, to ensure that there i no deruption ‘Once the payment fie Is made available, then coinage lists, per pay pot, per day have to be developed and confirmed. This indicates the amount of cash required st each pay point. The cash must bo ordered in advance fom the banks, to onus the avallabilly of tho correct amount, a wel as the eorreat denominators. On the moming of payment, the money must be collected from the banks (remember that payment happen simultaneously In all provinces and ir al distcts) and transported tothe cash pay point by Cash In Transit (CIT) specialists. Once at the pay point, when the area has boen secured, the cash Is loaded into the mobile cagh dispensers and operators then log on and begin payment. Alter payment, reconciliation is required and tho surplus cath either banked or held over in seowe locations for the following day. Resources required to undertake cash payments Include staf, vehicles, security, pay peinls, cash, cash dispensers, and @ payment system which ‘oops tack of re payments, nor-colleations and reconciations. Is unlikely that any service provider ethor than CPS would have the ability to quarantes payments without disruption on Apri 2017, Failure to provice @ network for cash paymenis will result in approximately 40% of the SASSA bnofiiaries not receiving their money — which would constitute @ national disaster. While arrangements could be made to pay this runey inl Wier curen SASSA cards, many ofthese beneficiaries dO not have PIN number, having relied on biometric authentication to withdraw their money. A process to ensure that all these beneficiaries have Person! ‘dencation Numbers (PINs) ana are made aware of where to go to withdraNe ‘money would requie intensive effort and probably more than the 6 weeks lft before 1 Apri 201737. In anticipation cf a successful ‘phase in - phase out’ plan, SASSA issued Request for Irformation RFI) on 9 December 2016 with a view to formulating an optimised Request for Proposal RFP") and a requirement speciation thal takes cognisance ofthe cutrent market in commercial and {echnical toms. The key milestones and Procurement Roadmap of the RF is enclosed herewth marked "Annexure D' 4, FILING OF THE SUPPLEMENTARY PROGRESS REPORT TO THE COURT a4 42. In view of the fact that the Cour has discharged its supervisory funetion SSASSA is no longer under any formal duly to report to the Court on this mater. However, sesing that SASSA has now depertod radially fom it ral plan ‘88 ct out inthe Progress Repor, it would be aperopiate for SASSA to fle a supplementary ogress report at tho Court that wil inter ala inform the Court that it intends to enter into an interim arrangement with CPS ane aleo Sol out ite revised ‘phase in and phase out’ plan. To this end, SASSA intends to subm the report to Constuttonal Court, no later than 1 February 2am 5. APPLICATION FOR DEVIATION. 5. 52. 53. In vlow of tho tact that SASSA intands to procure CPS's services for the proposed intorim arrangement, SASSA therefore seeks to: 5.1.1. apply to the National Treasury for approval to deviate from the normal ‘compatitve bidding process and extend the running contract for a period not exceeding in terms of paragraph 8.5 ofthe Natonal Treasury Instruction of 2016/2017; ana 5.12. report 10 the National Treasury and Auditor General SA in torms of paragraph 4.35 of tha SASSA procurement pale. Uliisaton of the servioes of CPS wal certainly allow SASSA to continue affecting payment of social grant to beneficiaries wile embarking on its intemal processes to realise the objective of taking over the payment of social ‘rant tuncton ‘The key milestoves and Procurement Roadmap of the SASSA readiness Ie enclosed herewith marked "Annexure6. ESTIMATED FINANCIAL IMPLICATIONS FOR THE SHORT TERM, 6.1. Financial impcations are likely o vary based on the nagotited phase in ‘phase out perc and tho elements thereat 6.2. is unlikely to be able fo maintain the curent R16.50 per beneficiary per ‘month cost In fe interim period, although the medium term solution with banks will allow for capping of bank charges and shiting of proportion of beneficiaries away fom more expensive pay-points ‘Oplion 1: Extonding Gurren System Unit costs [No of Wansaclon’ | Total per annum a] reciente ‘Current Rina Ti 649 0% RO236 616256 Estimated cost [R200 —| 11649 043 R3076, 347,952 2017 25.00 R3,404,712;900 ‘NB The daft bucge! allocation or 2077718 ts R26 il 7. Mtl be appreciated if cur request could be positively considered in the best interest ‘nthe atin, Shorey, ir Thokozani Magwaza Chief Executive Officor Date: O1/o2J=017 "Tie tol mer fences ined fo 10 iin te esning fhe Ful ew aproxinely Spend Mh 307 a4 y ANNEXUKE A STATE ATTORNEY DX 298 PRETORIA INTHE CONSTITUTIONAL COURT OF SOUTH AFRICA ASE NO: CCT 4812013 In te mater bowen: ALLPAY CONSOLIDATEt INVESTMENT HOLDINGS (PTY) LTD Fits Appicant ALLPAY FRESS STATE (PTY) LTD ‘Second Applicant ALLPAY WESTERN CAPE (PTY) LTD “hid Applicant ALLPAY GAUTENG (Py) LTD Fourth Applicant ALLPAY EASTERN CAPE (PTY)LTD. Fath Applicant ALLPAY KWAZULU NATAL (PTY) LTD Sih Applicant ALLPAY MPUMALANGA(PTY)LTD 0... 8th Applicant ALLPAY Limpopo PTH) LTD Cees le ebm Appleone ALLPAY NORTH WEST (PTY) LTD. B51 108 —Nideth Applicant ALLPAY NORTHERN CAPE (PTY) LT «Tap Applicant tn MICAWBER 854 (PTY) LTD Eleventh Applicant MICAWBER 852 (PTY) LID Twelth Applicant MICAWBEER 255 (PTY) L1D “Thiteenth Applicant MICAWBEER 854 (PTY) LID Fourteenth Applicant and ‘THE CHIEF EXECUTIVE OFFICER OF THE SOUTH AFRICAN SOCIAL SECURITY AGENCY First Respondent ‘THE SOUTH AFRICAN SOCIAL SECURITY AGENCY Second Respondent CASH PAYMASTER SERVICE (PTY) LTD ‘Third RespondentEZIDLUBHEDU INVESTMENT HOLOINGS (PTY) LD FLASH SAVINGS AND CREDIT COOPERATIVE ENLIGHTENED SECURMY FORCE (PTY)LTD moBa comm (PTY) ENPILWENI PAYOUT SERVICES (PTY) LTD PENSION MANAGEMENT (TY) LTD [MASINGITA FINANCIAL SERVICE (PTY) LTD ‘THE SOUTH AFRICAN POST OFFICE ROMAN PROTECTION SOLUTIONS oC BANK LNkTED AFRICAN RENAISSANCE INVESTMENT MANAGEMENT (PTY) LID [STANDARD BANK GROUP LIMITED NeW SOLUTIONS (PTW) LTD HALA LneTED KTS TECHNOLOGY SOLUTIONS CONSORTIUM ‘THE SOUTH AFRICAN RESERVE BANK ‘THE PAYMENT ASSOCIATION OF SOUTH AFRICA FILING SHEET Fousth Respondent Flt) Respondent Sth Respondent Seventh Respondent Eighth Respondent Ninetn Respondent Ten Respondent Etoventh Respondent Twelth Respondent “Thiteonth Respondent Fourteenth Respondent Fiteenth Respondent Shtgenth Respondent Seventeenth Respondent Eightoonth Respondent Nineteenth Respondent Twentieth Respondent ocUMENT ‘THE FIRST AND SECOND RESPONDENTS! CSASSA'S) PROGRESS KEPURT IN KESPECT OF PARAGRAPH 4 1 OF THE OROER MADE BY THE ‘CONSTITUTIONAL COURT ON 17 APRIL 2014FILED BY: 255 SCHOENAN STREET PRETORIA PRIVATE BAG 01 PRETORIA Re too7r2e4m0M Tel: 012309 150102 Fax: 01228 266213 Dx: 298 PRETORIA Eng: DIKELEDI MOLEPO 10 THE 3EGISTRAR OF THE CONSTITUTIONAL COURT [BRAAMFONTEIN AND TO APPLICANTS ATTORNEYS NORTONS INC 135 DAISY STREET SANDTON REF-ANORTON/ A ROETS SANDTON Tet (011) 668.7560, Fa 986 800 $829 Em Anthony@nortonsine.com Refs ANotton 1A Roots AND TO: SMIT SEGOOLAM INC TTORNEYS FOR 3"° RESPONDENTS ‘"2AVONWOLD ROAD CCNRJAN SMUTS AVENUE Tat (011) 648 0008 Fax 011) 648 0016 Ema iaan@smitsew.co 2a Ref JonkerAND TO: AND TO: AND TO: NORTON ROSE FULBRIGHT SOUTH AFRICA ATTORNEYS FOR THE 18" RESPONDENT $8 ALICE LANE. SANDTON, TEL (011) 685 8500 FAX (O11) 301 3200, E-Mail: mavelise.vanderwesinuizen@nortonoseubsight.com / Mathews clrknortenreeetuaiaht.com REF SREMG/ Ms M van Get Westhuizen / MM Cla PAYMENTS ASSOCIATION OF SOUTH AFRICA 20!"RESPONDENT 2° FLOOR, D BUILDING. SUNNYSIDE OFFICE PARK 32 PRINCESS OF WALES TERRACE PARKTOWN JOHANNESBURG TEL (011) 645 6760 FAX. (017) 645 6860 E-MAIL: BiereC@nassa om za | Water @oasa.oraza VAN HULSTEYNS ATTORNEYS, ATTORNEYS FOR FIRST AMICUS CURIAE 3° FLOOR, SANDTON CITY OFFICE TOWER, 1s FIFTH STREET, SANDHURST ‘SANDTON. TEL: (011) 823 6300, AX (011) 523 5326 E-MAIL: Daniel@visw.co za tostne@blauico za Rot: ALEGG /D RAATH LEGAL RESOURCES CENTRE ‘Aioreys forthe Canta for Chi Law Copaitutional Ligation Unit 16 Foe, Bram Fecher House 20 Aber Sireet Solis nesting ‘Tes 017) 826 9891 Fax (011) 854 4273 small naseema@le ora.23 /sarah@lco1y 20 Ref: 11075212L NASEEMAR FAKIRI SARAH SEPHTON.IN THE CONSTITUTIONAL COURF OF SOUTH AFRICA Inthe matier belwesr: AUPAY CONSOUDATED INVESTMENT HOLDINGS (Pry) ttD ALLPAY FREE STATE (PTY LTD ALIPAY WESTERN CAPE(PTY) L1D ALLPAY GAUTENG (P1Y)ID ALLPAY EASTERN CAPE (ry) trD ALLPAY KWAZULW NATA. (PTY) LTD ALLPAY MPUMALANGA {Pr¥) LID ALLPAY LIMPOPO (PTY) LID ALLPAY NORTH WEST (FT) LID ALLPAY NORTHERN CAPE (PTY) nD MICAWBER 881 (TY) MICAWeER 882 (PTY) uD MiCAWBER 853 (PTY) LID MICAWBER 854 TY) LID cond THE CHIEF EXECUTIVE OFF CER OF THE SOUIH AFRICAN SOCIAL SECURITY AGENCY THE SOUTH AFRICAN SOCIAL SECURITY AGENCY CASH PAYMASTER SERVICES (PTY) LTD ETIDLUBHEDU INVESTMENT HOLDINGS (FTY) LID FLASH SAVINGS AND CREDIT COOPERATIVE CASE CCT 48/13 Fist Applicant Second Applicant Third Applicont Fourth Applicant Fifth Applicant Sixth Applicant Seventh Applicant Eighth Appicont Ninth Applicont Tenih Appicont -venth Applicent Twelfth Appicont Thiteenth Applicant Fourteenth Applicant fis Respondent Second Respondent Thig Respondent Fourth Respondent Fith RespondentPage 2 ENLIGHTENED SECURIY FORCE (PTY) UD Skih Respondent MOBA COMM (erY) ID Seventh Responctent EMPILWENI PAYOUT SERVICES (PTY) LTD ght Respondent PENSION MANAGEMENT (PTY) LID. Ninth Respondent -MASINGITA FINANCIAL SERVICES (PTY) LTD Tenth Respondent THE SOUTH AFRICAN POST OFFICE eventh Respondent ROMAN PROTECTION SOLUTIONS CC Iwelih Respondent UBANK umED Iiteenth Respondent [AFRICAN RENAISSANCE INVESTMENT MANAGEMENT (FrY) LID Fourleenth Respondent STANDARD BANK GROJP LIMITED Fiteenth Respondent NEW SOLUTIONS (FY) 1D Saleenth Respondent ITHACA unnTED Seventsenth Respondent KIS TECHNOLOGY SOLUTIONS CONSORTIUM —_Eighteenth Respondent ‘THE SOUTH AFRICAN RESERVE BANK Nineleenth Reseondent THE PAYMENT ASSOCIATION OF SOUTH AFRICA Twentieth Respondent PROGRESS REPORT IN TERMS OF PARAGRAPH 4.1 OF THE ORDER. ‘MADE BY THE CONSTITUTIONAL COURT ON 17 APRIL2014 |. The decision later by the Chief Executive Dicer of SASSA no! fo ‘ward the lender for the poyments of social grants wow floc! with Regist of tis Cout on 18 October 2015.Pages In terns of paragioph 4, | of this Court's erder doled 17 Api 2014, SASSA must within 14 days ofits dection net fo award the tender “lodge « repod wilh the Regisar of ths Cout setiing out ail the ‘relevant informotion on whether and when i! wit be ready to ossume the duly to pay grants itso" In her 2012 budget speech the Minler of Social Cevelopment Indicated that the contrac! for the poyment of social gronts, subsequently awerded fo the thd respondent and thereatter set ‘side by tis Honourable Cour, would be the fino time that © thie arly wos contiatied fo effect the payment of social granis on SASSA’s behalf, ond thal thereatter SASSA would perfor in ful its ‘mandate in terms of the South Atican Social Security Agency Act. ‘Act 9 of 2004. The impugned payment contact wos designed fo seve as o springboard forthe future payment system for sociol osislance. The plan wos for SASSA take over the control, administaion and monegement of coyment of the social grants by 2017 when the contract with CPS expires. SASSA wot further going 10 pio! is poyment system duing 2016. However. the finding of invatity of the foward of the fender to CPS and the new fender process ordered by this Cour had the etlect of te-crecting SASSA’s immediate focus and esources to the running ond completion of the new tender processPage « Subsequent fo ire daciéon no! to award, SASSA is now ine pasion to ‘again dite ifs focus on taking over the payment of soctol grants To ensure ihe continued poyment of social gon it should be noted thal the social ganis voive chain includes ine following! 5.1. Application management: setaening and attesting of each feppicant, he envoiment of the applicant en the system. the factual capturing ond vedfcation of the application on the: system: 52. Payment Management: the processing of payments, actual oymenis lo beneficioties and the reconciation of payments: and 53. Benefician Mcintenance Management: the le certification 08 well 05 the maintenance of the beneficiary data including gront reviews, Al the obove functions, except the ectuel payment of social grants fo beneliciaies ond reloted functions, are oteady curently petlormed by SASSA. The payment functions ental the actual processing ond transfer of cash 1o the diferent beneficcry aceents the acive! cosh disibution to those beneficioies who prefer to ‘receive their benell in cosh: os well the reconciliation offer poyment,Pages SASSA’s iil plan lo take responsibly for payment of social grants wos. flows 7.1. Phose | (20.2-2014): Centralsotion ond improvement of inlegily of the data which included colection of biomettic data trom CPS, 7.2. Phase ? 2014 - 2015}: Taking over en-geing enrolment process. 7.3. Phase 2 (20'3 - 2016}: Developing SASSA in-house capability to manage poyments ond reconcifation. 7.4. Phase 4 (2018): Pilot of the new systern in 2016 7.5. Phase 5 |2017}: Implementation full rollout in 2917, The lokeover of these functions requies SASSA fo build is intemal copocily inclueing the development of syslems ond precesies: as wells ine recruiiment of appropriote personnel In order to assist $4854 in the selection ond implementation of the oppropfate, most efficient ond cost effective method of insitutionelsation of the payment of social gras, and the requied ersonnel sil, the Minbler ol Social Development appointed an Advlsory Commies during September 2014, to investigate and dvise her on the oppropriae system payment of social grants.Page 6 SASSA oo enltied she ossitonce of the Counel for Sciantiic & Indushiol Research (CSIR) enc the Notional Insitute for Smart Government [NISG], New Delhi, lncia, fo advise on payment systems Feloted ond other issJes regerding the instuionalsation of the payment of social ants In tegor f0 prose 1 ielered fo in poiogeph 7 above, the Ccentealsalion ond improvement of integily of the dota which included collection of biometic dala, has been achieved. SASSA wos through the resegisalion process, able fo establish a centralised biometiic-based poyment database of ol benelciaies (children included), recipienis ond procuratots: and hos begun to verly adit biometric Gata ogains! the National Population Register at the Deparment of Home Affi Phose 2, which & the toking over of on-going ervolment process require of SASSA fo procure ils awn hardware ond software for biometic enrolment and verication. in order te reduce troud in the ‘grant system by SASSA official {iystem users} and beneficiaries, biometric veriicction and authentication in the ferm of biomettic identity ond cccess monogement for syslom users: ond automated fingerprint idenlicalon uns wetfecslion system for Beneficiaries Is citicol, SASSA has odverlsed a fender for biomettic identity and ‘occets management fe i system users. However, in order fo curb)Pove 7 osls, SASSA f seeking advice on whether the same hard ond soffwore could no: be uliised for both biometric identity end access menogerent for ofcias: ond ovlomaled fingeroin! identification ‘and veriication system for beneficiores, Phase 3, developing SASSA's inhouse copabilly (ystems. processes Cond sis} fo manage payments ond reconeiiotion, hs nol yet begun © SASSA is sin the process of eeconciing the recommendations by the Minsteiol Adviory Committee: NG ond CSIR to deterring the ‘ppreptiote cpproach fo insiuionaliing payment of grants, with respect 10 tequred syste, sis and 0 forth, SASSA wil ako Continue Consulting with stoksholcers including the South African Reserve Bonk (SARE): Payment Association ef Soulh Aico [PASA) end Nationol Treosuy, SASSA wil inerefore ossumo the duty to ise toke over the poyment Of social grants. The fable below depicts the system deliverables fequited for SASSA fo fake contol of it mondate, and the jime irames applicable thereto: "No. |Delivercbie” ~~ Timettame —) Milestone ~ TT “inlegation cf 7 Maich fo Jone | Wab bored sitemsiiveush 2016 tno! anplicofonineoralect | |web= bored phase} wh moinrame | ‘opplication — | application and other | Avaust 2016 ul Scr appeotions ot he implementation bocrenaPoge 8 2” Wetlicoicr anc] Moy 2018) Buk Bibmetic tr ulhenicetion biornelic _—_beneticlres exit lematic access bye op, competedion | | Tpmeiment ol | October 2016 | bon | bbeneticioras & | system vse) | [3° |Fowment [January 2017 | Rayment ite processing contol j | account | i i 4 TPayinent | ienwory 2017 | Data factory sel up, ‘ecoreitaton~ wesores Tender awerdied ee | during Seatersber 2015 5 TPayment™ | October 2016 | impierneniation | inostucture \ | - | © Camm Oétober 2618 inte i sere ; | Jon =March | Contre! with 7 "Cidisuance “October 3018- Corsuifation with the fond special March 2017—_SARB, PASA and bank accounts Government Printers | by Febuary 2016 4. I should be noted that there ave those ancilory services of functions thal SASSA is sil fo oulsource. These include cord issuance, cath {isinoutlon onal the secunly thereot. sou ako be nated that the fime fromes herein ore dependent on the oulcome of the. “Annee CONSTITUTIONAL COURT OF SOUTH AFRICA tn the mater between: ALLPAY CONSOLIDATED INVESTMENT HOLDINGS (PTY) LD ALLPAY FREE STATE @PTY) LID ALLPAY WESTERN CAPE (PTY) LID ALLPAY GAUTENG (PTY) LTD ALLPAY EASTERN CAPE (PTY) LTD ALLPAY KWAZULU-NATAL (PTY) LTD ALLPAY MPUMALANGA @TY) LTD ALLPAY LIMPOPO (PTY) LTD ALLPAY NORTH WEST (PTY) LID ALLPAY NORTHERN CAPE (PTY) LD, MICAWBER 851 (PTY) LTD MICAWBER 852 (PTY) LTD MICAWBER 853 (PTY) LXD MICAWBER 854 (PTY) LTD Case CCT 8/13 First Applicant Seoond Applicant hind Applicant Fourth Applicant Fifth Applicant Sixth Applicant Seventh Appiicant Eighth Applicant Ninth Applicant Tenth Applicant leveath Applicant ‘Twelth Applicant “Tieteenth Applicant Fourteenth ApplicantCHIEF EXECUTIVE OFFICER OF THE SOUTH AFRICAN SOCIAL SECURITY AGENCY Flest Respondent SOUTH AFRICAN SOCIAL SECURITY AGENCY Second Respondent CASH PAYMASTER SERVICES (PTY) LTD ‘Thied Respondeat EZIDLUBHEDU INVESTMENT HOLDINGS (PTY) LTD Fourth Respondent FLASH SAVINGS AND CREDIT COOPERATIVE ith Respondent ENLIGHTENED SECURITY FORCE (PTY) LTD Sia Respondent MOBA COMM (PTY) LID Seventh Respondent EMPILWENI PAYOUT SERVICES (PLY) LUD Eighth Respondent PENSION MANAGEMENT (PTY) LTD Ninth Respondent -MASINGITA FINANCIAL SERVICES (PTY) LTD ‘Tenth Respondent SOUTH AFRICAN POST OFFICE Eleventh Respondent ROMAN PROTECTION SOLUTIONS CC Tweh Respondent UBANK LIMITED Thicenth Respondent AFRICAN RENAISSANCE INVESTMENT MANAGEMENT (PTY) LTD Fourienth Respondent STANDARD BANK GROUP LIMITED ieenh Respoadent NEW SOLUTIONS (PTY) LTD Sixteenth Respondent ITHALA LIMITED Seventeenth Respondent KTS TECHNOLOGY SOLUTIONS CONSORTIUM Eighteenth Respondeat ‘SOUTH AFRICAN RESERVE BANK [Nineteenth Respondent PAYMENT ASSOCIATION OF SOUTH AFRICA ‘Twentieth Respondent and CORRUPTION WATCH First Amicus Curiae CENTRE FOR CHILD Law Second Amicus CuriaeBLACK SASH TRUST ‘Third Amicus Curiae ORDER DATED 25 NOVEMBER 2015 CORAM: Mogoeng Cl, Cameron J, Jafta J, Khampepe J, Madlanga J. Nksbinde J, [Nugent A, Van der Westinizen and Zon J. ‘The Constitutional Court has considered the Progress Report filed in terms of paragraph 4.1 ofthis Cours order dated 17 April 2014. It Its concluded thatthe Progress Report is compliant with this Court's order and that the supervisory {jwiadiction shouldbe discharged. Order: 1, ‘The Constitutional Court's supervisory jurisdiction is discharged Ms VISAGIE SENIOR REGISTRAR’S CLERK CONSTITUTIONAL COURT ‘TO: NORTONS INC Awiorneys forthe Applicanis 135 Daisy Steet SANDTON Tek O11 656 7560 ax: 086 600 $529 Ena: anthony@inortonsine.com Ref A Norton /A Roots AND ‘TO: THE STATE ATTORNEY ‘Attomeys forthe Fist and Second Respondents, Ground floor 255 Schoeman SteetPRETORIA Tek: 012 309 1569 ax: 012 32200171012 309 649/50) imal: dimolepo@justice.gov.2a Ref: 1007/12/21/MM AND TO: SMIT SEWGOOLAM INC ‘Attorneys forthe Third Respondent [2Avonwold Road SAXONWOLD Tel: O11 646.0006 ax: O11 646 0016 Emil: tinan(@smitsew.co 70 AND ‘TO: NORTON ROSE FULBRIGHT SOUTH AFRICA ‘Attorney’ forthe Nineteent! Respondent 15 Alice Lane SANDTON “Tel O11 685 8500 Pax: O11 301 3200, Email: mareise.vanderwesthuizen@nortonroseflbriht.com / matthew elark@noxtonrosefulbright.com Refs SRB46/ Ms M van der Westhuizen /MrM Clark AND ‘TO; PAYMENTS ASSOCIATION OF SOUTH AFRICA ‘Twentieth Respondent 2a Floor, D Building Sunnyside Office Park 432 Princess of Wales Terrace Parktown JOHANNESBURG. Tek: 11 645 6760 Pax: 011 685 6860 Ema: piereo@pasa.org. za walterv@pass.orgza AND TO: VAN HUYLSTENS ‘Attorneys for First Amicus Curiae 5rd Floor, Sandton City Office Tower 138 Fifth Steet, Sandhurst SANDTON "Tels OL1 523 5300Fax: O11 523 5326 Ref: A Legg /D Raath Emil: daniel@vlaw.co.2a AND TO: LEGAL RESOURCES CENTRE ‘Attorneys forthe Second Amicus Curiae Constitutional Litigation Unit 16th Floor Bram Fisher House 20 Albert Street JOHANNESBURG “Tol O11 836 9831 ax: O11 834 4273 null: naseema@lre.orp.za Ref Sarah Sephton/Naseema Fakir AND TO: LEGAL RESOURCES CENTRE Attorneys forthe Third Amiois 16th Floor, Bram Fischer Towers 20 Albert Stet Marshalltown JOHANNESBURG “Tel: 011 8369831 Fax: O11 834 4273 Email: naseema@hre.org.2a Ref, Sarah Sephion/Naseems“rwewpe Sy he aS SOCIAL ASSISTANCE GRANT PAYMENT AND BANKING SERVICES (FUTURE). EXECUTIVE SUMMARY: PROPOSED CHANGE PROGRAMME PLAN COMMUNIQUE V1 (DRAFT) prossagen — sm ie anes 1 Haan Dp nnn 27 SAC 8 od tN £19 BOG Ate 130 can th gmt cy Sd eg LAL sie tn 8 IASI 12 tetra‘The purpose ofthis document st communzate SASSAs pln moving forward In 9 rsltic and eenstonal manner towards future state wore SASSA delivers an improve “one stop” Grant ‘Adminstration and Payment Sri tha is wold lending nd adresses the Issues SAA faces in the current soci! grant payment environment ina Wwansonal nd phased manner that considers ‘he lnited capably, capacy ad bude Ensuring ths future state is achievable through 2 cael, cautous ané tensions approach to Insuring payments services overtime, & comprehensive charge programme plan has been summarise in tis communique to cay SASSAS fm plans to improve service delivery, Compliance, rk management an Youd ratigaton This lan wl alo Wghliaht the msi business bjectnes and requremente Informing the proposed plan. This in tw Informs curent SASSA. ttcsions for SASSA to alessinmadlate and pressing Sues facing the socal wsstance grant sdinstration and peynent function, These neue: ‘Grant Payment Business Continuty beyond March 33st, 2017 ‘+The sue of Deduction Management and Special Payment Account requirements +The need for 2 Now Improved and Integrated Grant Administration and Payment Ecosystem 1 The Managed least Zk) Ent ofthe Incumbent Service Provider CPS “This plan the product of binging together barking ard payment industy experts and subject rater experts, together with socal rant payment domain experts and hay stakeholders rom SASS ands partners. Workdreans, 2 SASSA apposed stoerco an SASSA tsk teams, who have ‘worked together to formulate an optimized and efetive business ard technology operating mode! ‘hats both practi achivabe by SASSA over ime ad tin the current budget sd capac constraints, ‘his document wl show how fat SASSA has embarked ona programme that will user ina new ‘roof gta eran dinsraton and peymentoma is ‘On Novembey, te ® 2015 SASSA submited othe Constttlonal Cur 7 Point Phan as part of progress report = these seven gins are sted nthe table below ARAL ae I PS PP stander fee fae faa [ome — ASA plant take respon for payment of social grants was as follows: “Phase 20122014 Cetrtsation and improvement of integrity ofthe dat which included clio of tet data fom CPS. ‘+ Phase 2 20142015: Toking over om going enrolment process, “hace 22013-2026 Developing SASS i-nouse capably to manage payments and recondition + Phase 2016): Pit of the new system in 2036. 4+ ae § 2017 plementation fl allot in 2017, developement of systems ana poceses a wala the ecsutment of appropriate personne “his moe took Into account mals and cecommendstios resuting fom SASSA enlisting the assistance of the Coun for Scene & instil Reserch (CIR) andthe Nationa institute for Smart Goverment (MSG), New Delhi inde, to edvse on payment stems and eter isues repatdng he intonation of the payne soll ant.Inthe petiod between Novemer 205 and Fetrury 2016, sng the 7 commitments made 1 te cout, modeling an simulator ofthe change Impeaton to SASSA ona more dead level were Undertaken leading oa change lan ané roadmap. STI Rs Inthe period, Merch ta May 2016 » detailed gap anayss was unrtaken to estas the extent of ‘the baigetedusments capacty end capably chatenges and several challenges and constraints were uncovered wih fr reaching consequences. fer uncover these challenges and constraints In the detls ofthis review, twas determined that SASSA shuld tate a ‘ess ambitious and ‘tenonl approach to owning the moet stratepc aspets ofthe rant payment value chain, SASSA “strategic owneriin and contro of an ntgrated value chain remains the primary objective of SASSA ‘change but in manageable phates of tanston that equred going back othe drawing board 2nd eeling industry expertise an subject alter experts to ast In re-confguring &“hybri value thaly both insouced and ceaourced in a manner tht slows srategl dsintermediaton to anne but a a slower pace that woul ve way fr the requred SASS readiness programe nervy. From idly 2036 to present SASSA have engaged worksteam advisors and subject matter ‘experts in the banking an payment ectorin both the business ang technology domains, who have Urb SASSA in formulating the bet eptions In tems ofthe rt way forward towards 3 ttastional vl chain soure approach hat takes fll and dtalledcopisance of SASSA capacity sd eapbity constant ‘Axe point change programme spanning 3 years together witha MTEF expenditure budget based on ‘new payment vale chsin ad Infeosouring plan and operating models now ests ints Hal ‘Hoge of approval at al evel fom which SASSA has undertaken to benchmark i terms of a RF) push rcenty (9 Decemter 2016] 10 exe feecback rom the market tat wil low ASA hd stakeholders to ratty the anstonal plan. This plan however has challenges outstanding In ‘tems of SARB/PASR repltion chebenges and conficsof poe that need tobe resoWed moving forward to allow SASSA the ret to inmowate using Industry best ractces and gab banking and pyre ends that wi sae SASS ilon of rand ove the meom term, Pa SASSA has embarked ona journey towards an Integrated Grant Adminstration & Payer atare ‘hore a schedule 3a agen of government i ble to perform ts social asistance mandate io {ull over a period oft that phased nto @ practical and achievable programmes an prised accorting tn et ofstategesoalsand objectives. 4.4 STRATEGIC GOALS AND opsccriVves ‘the foundation of his ropa ea ear and wel detned set ofthe strate gal are objectives that inform SASSA fate design considerations and dvers. Without a fll understanding ofthe Geta and complesty ofthe cent Socal Grant Adminstration and Payment envienment, the "right way forward isnot nmadately apparent to al stakeholders, wth comple ses and rks in pola business an tedhadlagy terms bein as they are, iis mperatve that these competeste ufcinty unpacks to ensure a lear understanding ad support for the rg way forward is setiove, ‘The SASSA change programme has consulted sect mater & domaln experts and together, have developed ature proat sod astance, gant administration and grant payment service model to deliver the most efit, efecve and emplnt sence achievable, while atthe same time ‘suring thatthe broader saepe eels and compllonce objectives ofthe Soc Aésistnce Grant -dinstratin and Payment Fnction ace met ‘igament 10 these goals ané objectives though 2 wellmanaged proces involving all the ‘akeolers must continue t9 evole and grow as stakeholders contibute accordingly vis the proposed change programe slow 4:11 IMPROVED PAYMENT CARD FOCUSING ON SASSA REQUIREMENT Figure below gves x example of how the card might lok and how utinatey it shoul be tonfgured to meet stati SASSA requirements an features that over time wil increase SASSA complnce with ts mandate and educ ik and cost of transaction saving bllons of cesar “enuponicon res SASSALOgOCNY! BSA notice ssn owned cue sds Sort Grant syssa aed cosy eye card sa3sa | ‘tuners ssn vnsorse cone ‘enews ces naa Eee Lone ‘ectraes ees tenet teen Gran uessshontoner ens ate ‘remunte el Wie the eae dnkted fice 4 ook te any tadional bank car, 115 important to ote thatthe features ad fnetons ofthis card make very ferent. Fst and foremost, this ada Socal Gnt Payment Car wth MO Deductions / Traditions Bank Fees ang inn any respect s NOT» Bank Card tf the strategic view of SASSA in poly terms that ranking the unbaked” remains secondary and ls inportant object ofthis cara who'sprimary objcine cen the effective ord compl payment of sacl assistance grants forthe alleviation of every Furthermore, this cr wlutintely be owned by SASSA and together witht more durable Card body sdslgnedto be transerable to naw service owes and a5 sich bears @ BIN {Banking 1D Number) tht ls avned By SASSA and transferable to new Payment Service Providers as ected by SASSA, ‘he other immediately apparent ference Is the notable absence of NON Bank banding, and atthe bottom ofthe card, One SASSA Owned Customer Care Number that lows enefidales to cl ore number to resoe all qetes rom gant administration through to payment {THE INTEGRATED VALUE CHAIN ‘lima SASS sins to provide an improved ant adinstration and payment service thot improves benefry experience wile increasing efcleney and eflectveness and reducing fraud and ek, THs requires the grant application and the payment card pplication to form par of “one stp” proces that hegns wth a gront application and resus inthe ssn ofa payment ars Faure 2 above desrves how SASSA wil perform anew integrated service futon where {rant adinitation and grant payment card svance are performed a8 one integrated 41. The applcanvbeneficary is met and greeted atthe newly planet customer care desk where bemetic ie catured and cue ticket issued and wile the appeant wats tobe tended to by 2 SASSA grant administrator a check ofthe biometric ‘eden prfrmed aginst the atonal population ester for uthentity 2. atstep2the applicant is managed a8 par of “one stop” process where teenie ‘rant aplalion and approval aks placeaaa aaa 3. Aton the ana the same one stn desk, and If grant aplication i sucess this resusin the sung of iometrc enabled poyment card ‘Tis pocessiscaveretin more detail blowin the beefy enciment section below. IMPROVED BENEFICIARY EXPERIENCE Provide “one sop" snvice pnt adel for improving the efieny and electveness with which SASSA manages the "Appeation to Payment” vale chain through a transition from the cuenti sara SASSA grant appcaion and CPS payment operating sos to an Interted valve chan CUSTOMER RELATIONSHIP OWNERSHIP & INTEGRATED CUSTOMER CARE Provide an improved en fullyintegrted Customer Relationship Management & Customer Care apaby within ASS, ‘VALUE CHAIN PERFORMANCE & EFFICIENCY Manage bth hous functions a well as those that that reside with suppers node to assure the Seamless operon, maatenance and support and a coheshe and coherent customer experience \VALUE CHAIN TRANSPARENCY. Provide perfomance wanagement, compliance management an isk management that measurable and transparent sharing a new lve af srl provider accountability end sence ve flint assurance. IMPROVED SASSA COMPLIANCE Provide Payment Reoniation, Serve provider Compliance and Deduction management ‘surance though a nere deed mankorng an evaluation of series delivered IMPROVED RISK MANAGEMENT SASSA has ask maragement goal t Improve compllance and reseny, and produce & relale system for azezng compliance and making at these business processes much ‘ase fr the lied SASS rst maragament function. SSASSA CYBER ASSURANCE Provide new eels ffrncd mitigation to an tthe new dpa era wile tthe same tine Providing » new lew of eyber ausurane that ensures that as SASSA tale the grant ‘Sdminsration an psynent proces gal that it ess without exposing the Beneciny ‘and gency to ein, an new eyber treats nd ks.4.110 COMPLIANCE WITH PAYIMENT CARD INDUSTRY STANDARDS (€.6. PC DSS} | SASS undestles 3 Ingourecntain payment functions over time t must e abe to ‘Comply to the Payment Card tnustry ata Securty Standards (PC DSS), Europa, Vise, ‘MasterCard EN) Payment Stondard and Blometic Standards the same way banks re reauled to and ssuhreuies SASSA orp its capa inthis area of expertise. ALLL ACHIEVING STRATEGIC DATA OWNERSHIP FOR SASSA In onde or SAA oben rom i gal amerhip of data, must provide the necesary instruct, hestngerironment and support personnel management to own and ‘onsumeallthe Benefioryreltd data na secure and cost effective manne. 4432 VALUE CHAIN otvensietCATION [tthe heart of SASS statagy ito dry the vale chain that wal empower the SASSA fant payment funtion to reach further and extend ts service and Alternative ayPoint inrastractre to broader bse of demands 443 SASSA SUPPLY CHAIN MANAGEMENT READINESS [tthe heart of SASEA readiness ithe requirement to provide anew operations capacity ‘Supply Chin Management function n SASSA to ensure that the new Sevce providers can Ie managed an aceon eectve way. 4.2 REMAINING CHALLENGES ‘The above SASSAStraeplc Gals and Objectives conine toe faced wih changes the most salt on bine thi inorder for SASS to bene rm the change inthe way serve provisers and tanks wil prove banking and payment servis, SASSA has to undergo series of structural hanger in the way it conducts business ad needs to achieve aleve of readiness in capably ané Capecty terms without whieh no meaningll charge wl be posible. SASSA wis port ofthe froposed change programme undertake» series of recommend people, process and techoony ‘Changes address this chabenge, This approach is icssed further nthe section below.ERLE “The brogramimes below have been develope to both ensure the delvery and enhance the “7” even deverables reported tothe Cnourt~golngboyond these deliverables o deve alaspcts ‘fa SASS readiness programe fo ensure the best posible outomes in suppor of an improved Sci sistance copabity thn SASSA ais future partner eco-system In section 7 below we then report os requested onthe current progress and status ofthese programmes taking back to the7'seven deliverables 5.1. SASSA READINESS PROGRAMME ty tag nt acount the Stage SASSA Requirements & Business Value Sought, SASS should ‘mbork on 8 ramiber of programmes to prepare th otansation fr is new strates role ane pataton inthe barking ar payment vac HEL umn 1 Fei EE 1 aa ~- | Suu SS, a | Sad DATA SERVICE INTEGRATION PROGRAMIME: ‘This progzemene wll ensure that all futare data ownership issues that have constrained SSSA onze of the Gant Paymen: envionment are addressed and managed to» postive outcome and vantage for SASSA. Figure? depicts the chalnge of migrating dts fm mule environments 19 ‘newly hosted data cetre/seie environment 10542 IDENTITY & ACCESS MANAGEMENT PROGRAMME: ‘This programme wil ensre hit acute and future information systoms for grant administration and payments ae secure and wil Incude metic acess control to systems that wil significantly ree fraud ad eyberrin, 542 FRAUD, RISK & CYBER ASSURANCE PROGRAMME: This programme together wit the previous programme wit ensure that Benefciries, SASSA Offi and service providers operate na transparent and accountable manner that redues Kau, Fal and eber lnm invohing people, processes and systems. Figure 4 below Hstrates the ‘chalenge of an integrted appcac: aPerr => Fiewe 5 above dicts the cellenge of» Web Enabled Patform for trastoning fom lescy ‘ystems towards a ature state integrated grant adminisation and payment platform wheat the fame tine broodening the acess to systems to new partners and stlehoiers in a secre srcountable manner, 5.5 BIOMETRIC ENROLMENT PROGRAMME: ‘that wil alow SASSA 10 reduce coststndalone Blometie Scanner _t cue Ticket Prater | eepton cue Site oa eskssaty Somatic ‘sup Scanner + FlatedScanner smmmmmimme—| Fromomce opr eta sonaue Pas ro Prine = aa = “Application emeticcas a 4] ‘ender Figure 6 describes how benicar wl interact wth SASS nthe planed ute to enoy the ons Sto service counter tat proves to improve the quaty of benefary experiance the ap for 4 ont ad ecelve their parent card atone des, witha much quicker turnaround hat ofminates Current problems with ues a tne pent by benefidaries mn SASEA oes ‘This diagram describes how the new interaction wil eg at step (1) where the grant applicant vi approach a meet and pret desk where they wl dent themselves biometry and 2} receive 3 ue tc that willbe splayed onan auc sul pay). At stp (the applicant wi have hei fut tof elgts Domenie ateed an (5) any supporting documentation dgtaly teanned at pat ofe ase menogementfunton/pocess ofthe panned grant administration and payment stem, The results ofthis apication wil be sgn a stp (6) ona egal signature pad and the rests of the applation pred forthe applicant te hold (7) the appcatlon Is epproves the SASSA service desk oper then inalses and provisions the rew Grant Payment Card to the 14bneiary (8) as prt of proses it wil perform wth the elp of @ payment service provider and sponsoring bank, 5:15 INTEGRATED CUSTOMER CARE & SUPPORT PROGRAMME: ‘he heart of SSSA stintepclntnt tore control ofthe benef elationship is the nee to Integrate the call centres on the SASSA and Sence Provider ses into one managed function Capable of handing sl eustoner queries Wa one sng telephone number or st any sevice desk tine. This programme wl neue that phased anstona approach taken ln which over time SASA wltke ove the fl futon over tine ene) Pana Pe Sire | “es one Sop Reson ot Gn miner & Poymer Guster a | 5:1 NEW IMPROVED PROCESS PROGRAMME: ‘his prograrime wil usher in new ra of Socal Azsstnce Serle Delvry ncudng 3 “one sop" tervic desk that wil admins grant apoiations and issue payment cards in less me and at a reduced cost ove the med term prod. 5:8 ALTERNATIVE PAYPOINT PROGRAMME “rs prgramme wi ntoduce new atertvePayPint options and capably that wil hers he ymert vl chia te invoice new partner eco-setems tat Improve the each of SASS while promoting les economic development and employment 1854.9 SUPPLY CHAIN MANAGEMENT RFAMINESS PROGRAMME: This programme i to ensue tat the supply chaln management function of SASSA sendy to meet the new chalengs of working with arse payment pares Including merchents and! motile pymant serie erules ‘The above progranimes wil enable SASSA to reale the Benefits of te Banking and Payments rosemme ad wansorm teSASSA grant administration to an negated vale chain as stated tow i figure 18 and 1-¢ tha wit ve sgnfcant return on investrint as eeasnaly SASSA can do more with ost. AL aneiacuinss inky port ofthe realness programme ale icles how SASS wi partner wth te banking snd peyments dustry to deere word Clas grant administration and payment service where 2s SASSA owes the gals te ave readiness programmes, soit wins transtionl manner tke on ey oretionsof banking and parent series ~these ave described below 16624 NEW BANKING PARTHER “The banking partner wilave art relationship wit SASSA with Rs own SUA attached to that. he tenting gortner lb response fr tat ard SASS hlding acount, beneflry banking zecout ‘suing, Henefiery banking count manegement, benefcery booking account management authorization, reconiation and setement ‘The SASSA grant funds should yo iret tothe SAA banking parnec and tay there una gro Aitharevn. The Banking partes wil be responsible for 2 tlormade SASS Banking eeount tat Should be eacadd fom any deductions, ess sling of products end should ge SASSA an any tine aces nt the acount. nc the new baking partners ey for production the existing SASSA cards shou be migrated te the new baking prtner accounts without the necessity of new ccd re-ssunce 461.2 NEW CASH DISTRIBUTION AND PAY-POINT MANAGEMENT New Cash Dstibutin and Parpoitt Management service provider that asthe ay to acauite SAGEA branded card ino the new SASSA aqui restructure. Tey wl be response for the “Gstbutton of eash othe alotted cash pay pons, management ofthe infastuctre and sey, management ofthe aun devices pd take fl kof he cash management 61.3 MEW CARD BUREAU (CARD BODY PRODUCTION AND DISTRIBUTION) SASS relationship with Card Bureau for Caré Body Production and Distribution, This wil ensure SASSA can gate optimal ping and ful stock management and contol ofthe SASSA Kuo ‘ar. Wh his roatinship SASSA ca lo deat the cad design chip ste and appkstions onthe SAsSA smart ca 614 NEW ACQUIRING INFRASTRUCTURE Sass capi tose up thet own aug nfastracture and merchant networks. This wil aw Sasoato have multiple merchant stwark providers ach wih tei ov SLA and apabies. Test merchant near can then be used inthe new SASSA ned alternative po pln 6:15 NEW BIOMETRIC PROOF OF LIFE SYSTEM ‘the new biometric proof aie proposal sto remave the dependency ona transaction todo «prt tte, New technology can alow SASSAto implement strategy plsced lometsc Proof of ie (devices These devices shoul be standalone devesn ASSA ay points, SASSA oes, near ihiy scoured ATM aetworks et Seneidries can then use tesa devices togetier wih their card on 2 anor bases or when SSSA require to provide proof of Ife vi biomewcs. This roof can then te ienrprated the wat sing process wahout the nace for» lnm enhanced 6:16 NEW SASSA CARO LAB FOR TESTING AND CERTIFICATION SERVICES ‘With al the new technolo and busines funtion in SASSA control, SASSA shoud bus the In owe capably for suppor. This shoud abo be use for future product development nd upsiing wvoftheir interna tft. Tis wit remove the dependency on a third-party spl to prove this ‘thou measurement “This progrome wit ultimate result nthe prolong of @ new SASSA payment car that wi Ince strategie new capabitincidn Separation of Payment Card & Account Provider [EAS contalod Spell Account with SASSA Account Query & Withdrawal Rights Special Accost that does nt allow Deductions ‘Separate Cath Bspensation& Payolnt Service Provides (explore SAPO capably) Control of Merchants (Payment Partners) Separate Cad-bty Production & Ostibutin (explore GPW capably) ey iestones fr tl programe nce: ‘he date the fiat New SASSA Card sued Factoring ne fuziness Continuity bor Fest Phose ef integrated Grant ministration 8 Payrent Value Chain 18&y ‘annexure D Key Milestone & Procurement Roadmap “The follwing etivies and dates have beon st fr this ‘vertzement of Flin Goverment Tender Bultin Distrbition of RF document SSSA website and advertisement newspapers {Compulsory Biefing eon F1Submisin losing Date Requests for resentation [RF Dlesrinaton& RFP Compilation ‘December 2016, ‘9 December 2016, 8° enuary2017 10" February 2017 208 February 2017 0" arch 2017 “The following octvites and dates have been set for the RFP taklng nt secount the potential for multiple swore potently Le 35 arch 2017 FP Complon,Spelicaten Committee & BAC Approval [Aderiserent of REP in Goverment Teer Buti Distruron of RF dacumerts on SASSA website and aversement in newspapers Compulory Being sexton Quastions ‘Questions eating to RF? rem prospective Respondents Answered AFP Submision Cling Date [FP cash itibtlon& Payment Serves Awarded IP Banking & Payment Service Awarded FP Cash Bstrtion & Payment ences SA Sled vP banking & Payment Service Awardee SLAs Sened Key Post rocorement Att: iat Hew C3 Rallou Date “argt for 40.50% New Cares Rolled out Potetial Request for CPS Extension based on new Supper progress “Forget for Ful P5 Legacy Crd Replacement 7 Mateh 2057 Moreh 2017 24° March 2017 28 arch 2017 2a apr 2017 6 sune 2017 308 June 2017 uly 2017 1 august 2057 YNowembor 2017, Pune 2018, Phun 2018, December 2018“ANNEXURE € co o6/17 4. Feb 2017: Negation anne terms of engagement wth CPSs Mow 2017) neu “+ Payment Fle managetentprocsso prove controls on deductions {loner data management handover to SASSA + enfiry data management and transfer to SASSA Caeetre negation na customer care Improvement Grant payment reconctiion Serve fee ‘SUA Aajstment Agreement 2. Request for norman) was undertaken to gan feedback nd allnment withthe banking ‘nd payment industry RF Submision due onthe 10" of Februar and a team of expert re ready to diseminate the esse veily the commercial billy an cost effectivenes ofthe current Icitectore and integration sate, This willbe ued to further enhance our FP forthe proposed ew Grant Adminstration & Payment Services Mode Maren 200 “+ RF1Oisseminaion & A Compilation wil be completed (by Md March 2017 & Spctestion Commitee & BAC Apna chewed fy mid March 2037 andthe RFP wil be advertised in ‘Government Tender Blain (by ed of March 2017), ‘+ Full payment coninuty wil be achieved th NO dlsruptions or elated rks a5 CPS 1s nested with prtne'stoprovie 9 busines continuity and CPS phase out function stbject to the newly ajusted arargerent and SL 1 AFP Submision Casrg Gate wil be onthe 28th Ap 2047 a which point SASSA with the ‘uppor of being ad payment experts willegin he process of technical nd comerco ‘uation and selection reciting in the ewerdng of one or more service providers inelacine= 1 ACash osuibuton& Payment Serie tobe awarded by mid-June 2017 {Banking & Payment Sences tebe awarded by end of une 2017 ans ‘+ Inquarter2, dette SLAs willbe completed with one or mare suppers follows: 1 RFP Cath Dstebution & Payment Services SLA Signe by end of iy 2017 (RFP Bankng & Payment Serves Awarded SAS Signed by m-Augist 2017 as 2007/18 + tnqurtr tre the iat Hew SASSA Payment Card wilb ole out wth the new aking ad payment processes require by SASSA by eaty Noverbes 2017) 1+ msupport of th ew card that SSSA wl issu wth new partners the fist phases and ‘ersions of supporting SASSA capably (new people process and technology wil be io piace ~inlag(Wel enabie plac that integrates ein and new SASEA systems or improved siminrtion nd improved benicar experience 1 Supporting Dat Serie integration apd transfer of ownership and management {SASS ube a place (Systm User nity & Rees Conta fr currant an future SASSA systems wl be rolled ot natinwade © SASSA Manage Henefiary Blometre Enrolment capability wil be up and ‘uring apart of te new improved ran administration and payment process. ‘© Integrated, ik and Gjber Assurance platform wil bein place wth the necessary tegration othe national ber conte another stakehaldes- (© Integratedcustomer Car Suppor capability wil be m place hat empowers SASSA to tae fll nership of Benefidary malntenance and management. ‘© New improved Grant Adminstration ané Payment sem version 3} wil be ve and rolled oot to designated SASS offen (Pet projet ~offering a Sinfient improved “one stop” serie delivery function. ‘6 Alternative py points witha bee instal at 2 number of designated plot Sites where ew level of tural each ad payment inoratin floc scoreic development willbe achieves, Supply Chin Management proceets and syst improvements including 2 new Merchant management system willbe place, allowing SASS to improve Carmine ne performance at erent and itredesigated pe pons 2 2018/18 yea une 2018s expected that between 4-508 of New SSSA Parent Card wl eral out, Ini based on this plang assumption that a deal plan wl be nego forthe "steequent pave ou of CPS in ths period commensurate wth the prowess ofthe new service provider asin SASSA with the rollout ofthe new card cs poignis It isaminate tat subject to planed oprations 2 new suppl wi have achieved the target for Full segacy Crd Replacement atthe end of G4 208/29 facoes ina praéen 6 month contingency andl could therefore take place as early as end of 2 ou,zs national treasury S Se _ QQ Baer om ume et aa Me Thokozani Magwaza Chief Executve Ofer South Acan Social Seovty Agency Pate Bag X85062 PRETORIA 001 Dear Me Magwaza PROCUREMENT OF THE SOCIAL GRANT PAYMENT SERVICES BEYOND 31 MARCH 2017 1. ‘The Notions! Treasury atknowteages receipt of you ltr date C7 Februay 2017 2. The lator requests the approval of extension or existing contract with Cash Paymaster ‘Beacoe eed to heron as CPS) fo pay soil payrent asistence berets, The iil Sele’ R bea por beneolry fr te catract ending on 21 March 2017. The new proposed ‘ate pemeen R22 and R25 per bene for a prod ol eghten months |The request for extension was approved by the Chief Executive Oficeron 07 February 2017 ‘4 The reaton provided fr this extension is thatthe curent contact wil expe on 31 March Freee Sens nat ‘oad Yo take over he payment function tm CPS upon the expiry of the contact as inal erisaped. 15, The reason to extend ths invalid conract eno usable. Requesting National Treasury to ete"S conan at was declared vad by the highest court wil not ony be seen 3 een chant tha jude! sytem but may farther bo seen as perpetuating ho egal enc Uincdasttutena’ actions reprimanded by te Nighest court in the land, GASSA should have aac vation fo aavertsa 2 ew tender for @ she period in December 2016 o ety STahwary 201 ovo a solfreaed emergency 5. National Treasuy doesnot support the extension ofthe invalid contact, Natonal Treasury Na bay ‘support ine extent fesmetorms and condone. being appleable) i the (renstctiona Sa wt hor extend the suspension of inva beyond 31 Maren 2017 71 Your Inston has an obigation to ensure that any contract for geads and sank is in yeScdance wih a eyetom whi Is fa, equtabl, Wansparent, compalive and coe ffectve Kd regards, reaaasa ‘SHEP DIRECTOR. SOM GOVERNANCE, MONITORING AND COMPLANGE owe: BL faxe