DoT block licence machine tender after AG identified irregularities

Department of Transport (DoT) has taken decisive action and blocked the dodgy driving licence card machines tender. 

Transport Minister Barbara Creecy instructed her department to lodge a high court application for a declaratory order regarding the tender.

This was after the department announced in September that it had appointed biometric security company, IDEMIA, as the preferred bidder for a tender to print new South African driving licence smart cards.

IDEMIA is a French multinational technology firm that provides biometric identification and security services.

Creecy’s decision was influenced by findings from the Auditor-General (AG) report, which identified instances of non-compliance with required procurement processes. 

The procurement was managed by the Driving Licence Card Account (DLCA), a state-owned entity under the Department of Transport that exists solely to produce driver licences.

The tender has been advertised and withdrawn repeatedly in recent years. The most recent tender was issued on March 8, 2023.

This sparked outrage from civil organisations such as the Organisation Undoing Tax Abuse (Outa), who challenged the transparency of the tender.

The organisation believed the entire tender process was shrouded in uncertainty and a lack of transparency.

As a result, Creecy requested the AG - who at the time was undertaking an audit of the procurement process for the new driving license card - to widen the scope of the audit process and include whether supply chain management prescripts were followed to the letter.

Creecy also wanted to know whether the specifications for the project included adequate measures to protect the safety of personal data, given the sensitivity of information and security features involved in this project.

She also wanted to know whether other South African service providers tendered, including service providers contracted by the government printing works, and why they were not selected.

Creecy also wanted to know if IDEMIA was the most affordable bidder. 

South Africa has depended on a single printer for decades to produce driver licence cards. With the machine, one card takes an average of 14 working days to complete.

This inefficient process and the printer’s advanced age have led to frequent malfunctions and breakdowns, which resulted in a significant backlog of licence renewal applications.

The backlog reached a peak of 1.3 million between 2022 and 2023.

To tackle this challenge, the transport department issued a tender for new, faster machines that could produce more cards daily and improve the security features of the cards.

The AG report noted that the bid evaluation committee (BEC) deviated from assessing the bids using the exact criteria set out in the bid specifications when evaluating documents provided by bidders. 

The BEC members had to use their judgment and make executive decisions on how to assess the bids due to ambiguous bid specifications, which did not clearly address the DLCA requirements. This ambiguity led to discrepancies identified by the AG, resulting in an unfair and non-transparent procurement process.

The inconsistencies extended beyond technical evaluation to site visits conducted by the DLCA. During these visits, the DLCA was supposed to confirm that the machine proposed by the bidder, IDEMIA's MX8100, had the required capacity and capability to deliver on the requirements. The DLCA chose to inspect an unrelated machine.

The deviation from the bid specifications and the use of ambiguous criteria undermine the fairness and transparency of the procurement process.

Furthermore, the AG noted that the evaluation of a machine not proposed by the bidder increases the risk that the selected service provider, IDEMIA, may not be able to fulfill the contract requirements. This could result in the DLCA failing to meet its constitutional mandate.

While the audit found that other bidders were not unfairly disqualified, IDEMIA also failed to meet key bid technical requirements.

The report also found that all bids submitted exceeded the R486,385 million budget set by the DLCA, indicating inadequate market analysis and budgeting. 

“The DLCA used outdated pre-Covid prices, and the budget they submitted to Cabinet for approval did not include all the costs for the contract, leading to Cabinet approving a memo that was not a true reflection of the cost of the contract. This poses the risk of the project being delayed or canceled due to insufficient funds,” said the AG. 

Creecy said the department was in no position to turn a blind eye to the findings of the AG that pointed to irregularities in the tender process and the transgressions of the Public Finance Management Act (PFMA). 

“In terms of section 81 (1) of the PFMA, an accounting officer for a department or a constitutional institution commits an act of financial misconduct if that accounting officer willfully or negligently, (b) makes or permits an unauthorized expenditure, an irregular expenditure, or a fruitless and wasteful expenditure.”

She said that, meanwhile, the department was exploring various interim solutions to sustain the operations of the current machine, given its age. The interim measures will be announced in due course.

Outa CEO, Wayne Duvenage, said the organisation was grateful that the Minister listened and took the matter further, as they believe there was clear evidence of wrongdoing and this was outlined in the OUTA dossier provided to the Minister in September last year.

“Soon after that award was given, Outa raised the flag with the Minister and also engaged with the Auditor-General to show where we believe the gross irregularities and tender manipulation had taken place. We are very grateful that the Minister agrees and is taking this matter through the courts to have this tender cancelled. More than that, we would like to see accountability against the perpetrators,” said Duvenage.

“It was so clear and obvious to us that this tender was manipulated.”

manyane.manyane@inl.co.za