R898m driving licence card machine tender award ‘irregular’ – AG audit written by By Roy Cokayne

[Nat Quinn]

The Auditor-General (AG) has found the award of a tender worth R898 million by the Driving Licence Card Account (DLCA) to IDEMIA Identity and Security South Africa, part of French multinational technology company IDEMIA, for the production of the new driving licence card to be irregular.

The budget set by the DLCA for the purchase of the machine was just over R486 million.

Read: Report on investigation into driving licence machine tender won’t be kept under wraps

Transport Minister Barbara Creecy has now instructed the Department of Transport (DoT) to lodge a high court application for a declaratory order on how to proceed with the driving licence card machine tender, given the AG’s audit report.

DoT spokesperson Collen Msibi said on Wednesday the department is exploring various interim solutions to sustain the operations of the current machine, given its age.

“The interim measures will be announced in due course,” he said.

Creecy instructed the AG in September 2024 to expedite and widen the audit scope of the procurement process after new evidence emerged of alleged serious irregularities in the decision to make IDEMIA the preferred bidder.

Outa evidence 

This followed the Organisation Undoing Tax Abuse (Outa) providing Creecy with new evidence of alleged serious irregularities in the tender decision.

Outa CEO Wayne Duvenage said: “This is a big win … We are celebrating.”

“It shows the power of effective civil intervention when whistleblowers and civil action organisations work responsibly together, and when a government department listens and engages meaningfully with civil society to undo the rot,” he added.

The investigation by the AG, among other things, identified instances of non-compliance with the required procurement processes emanating from transgressions of supply chain management prescripts – including the Public Finance Management Act, National Treasury regulations and DLCA supply chain management (SCM) policies – which rendered the procurement process irregular.

The AG’s report said the identified instances of non-compliance were due to:

• The DLCA’s budget analysis, as part of the demand management process, being inadequate;

• Bids not being evaluated according to the evaluation criteria as per the bid specifications; and

• Inconsistent application of scoring during the bid evaluation process.

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

This led to discrepancies identified by the AG’s office, resulting in an unfair and non-transparent procurement process.

Site visits

The AG said 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.

However, the AG investigation found the DLCA chose to inspect an unrelated machine.

Process ‘undermined’

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

The investigation report has further indicated that while the current non-compliances do not indicate fraud risk factors, their impact will be fully evaluated during the final regularity audit of 2024/2025. At the date of this [current] report, implementation and payment had not commenced, it said.

The AG concluded its report by remarking: “The AG audit of the DLCA’s SCM processes revealed irregularities in the tender evaluation.

“IDEMIA, the winning bidder, failed to meet key bid technical requirements,” it said.

“Additionally, their review confirmed that the other bidders were not unfairly disqualified, as they also did not meet the bid technical specifications.

“All bids submitted exceeded the R486.385 million budget set by the DLCA, indicating inadequate market analysis and budgeting,” it said.

“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.”

source:R898m driving licence card machine tender award ‘irregular’ – AG audit – Moneyweb

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