South Africa to cancel new driving licence card tender

Under the instruction of Minister Barbara Creecy, the Department of Transport (DoT) has been instructed to approach the High Court for a declaratory order to cancel the driving licence tender awarded to Idemia.

This comes after the Minister asked the Auditor General of South Africa (AGSA) to widen its investigation into the tender awarded by the Driving Licence Card Account (DLCA) in August 2024.

The department has now published the AGSA’s findings.

“Idemia, the winning bidder, failed to meet key bid technical requirements,” it wrote in its report.

It explained that other bidders were not unfairly disqualified as they also failed to meet the bid technical specifications.

“All bids submitted exceeded that R486 million budget set by the DLCA, indicating inadequate market analysis and budgeting,” the AGSA says.

“The DLCA used outdated pre-Covid prices, and the budget they submitted to cabinet for approval did not include all the costs for the contract, leading to cabinet approving a memo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.”

It warned that if allowed to proceed at the original budget, there would have been a high risk of the project being delayed or cancelled due to insufficient funds.

The AGSA also identified instances of non-compliance with prescribed procurement processes.

“The non-compliances emanated from transgressions of SCM prescripts, rendering the procurement process irregular,” it said.

The instances of non-compliance were due to the following:

• An inadequate budget analysis was conducted by the DLCA
• Failure to evaluate bids according to the evaluation criteria specified in the bid specifications
• Inconsistent application scoring during the evaluation process

The auditor general also found that the bid evaluation committee had deviated from assessing the bids using the criteria set out in the tender’s specifications.

However, this was due to the criteria being ambiguous.

“The ambiguity led to discrepancies identified by the AGSA, resulting in an unfair and non-transparent procurement process,” it said.

The AGSA noted that inconsistencies extended beyond technical evaluation to site visits conducted by the DLCA.

It said the DLCA was meant to confirm that Idemia’s proposed machine, the MX8100, had the required capacity to deliver on the requirements.

“However, the DLCA chose to inspect an unrelated machine. Management has not provided a satisfactory explanation or evidence for this decision,” it said.

Idemia told MyBroadband that it legitimately and lawfully won the tender.

“We believe we are the best in this field. We are fully committed to working hand in hand with the South African government to ensure that South Africans benefit from the most secure, reliable, and advanced driver’s licence solutions,” it said.

“The result of the audit carried out by the AGSA highlights irregularities that we take very seriously. While some of the findings pertain to matters beyond our scope, others directly concerning Idemia Smart Identity do not reflect the reality of our operations.”

It added that it is actively working to clarify these points and ensure full understanding of the situation.

In early September 2024, the Department of Transport announced that Idemia had been appointed the preferred bidder to procure three new driving licence printers for R334 million each.

However, this raised concerns over the tender process, significantly increasing the project budget. There were also concerns over Airport Company South Africa’s (ACSA’s) recent cancellation of a contract with Idemia.

This prompted Creecy to request that the auditor-general widen the scope of its investigation to the process.

Among the issues that the Minister wanted the Auditor-General to investigate were:

• Whether supply chain management procedures were adequately followed.
• Whether the tender included sufficient measures to protect the safety of personal data.
• The implications of the tender process on the recent ca
• The implications of the procurement process on the recent cancellation of ACSA’s contract with Idemia.
• Whether Idemia’s technical capacity and timeous delivery were adequately considered.
• Whether South African service providers were considered.
• Whether the chosen bidder was the most affordable option.

In October 2024, the Organisation Undoing Tax Abuse (Outa) raised further concerns over the tender’s price, saying the cost of the new machines was far higher than initially expected.

It welcomed the announcement of the widened investigation scope, and Outa executive director for accountability, Stefanie Fick, said the organisation had seen documents revealing the higher cost.

“If you look at the documents that we receive through whistleblowers, firstly the price is way more than what was initially suggested,” said Fick.

“There are, in fact, two documents from the Bid Evaluation Committee. Both have the same date but two different numbers.”

“The numbers didn’t go down. The numbers went up. It was initially around R400 million. We are now talking double that: around R800 million, close to R900 million,” she added.

However, at R334 million each, the project’s total cost is roughly R1 billion.

She added that Outa felt there was something untoward regarding the tender process and that Outa wanted government to ensure the process was legitimate before spending the funds.