Transport Minister Seeks Court Guidance on Irregular Driving Licence Card Machine Tender

The department announced on Wednesday that it seeks judicial guidance on proceeding with the matter, given the findings of the AGSA audit report.

Transport Minister Barbara Creecy has directed her department to file a high court application for a declaratory order concerning the Driving Licence Card Machine (DLCM) tender, which the Auditor-General South Africa (AGSA) deemed irregular. The department announced on Wednesday that it seeks judicial guidance on proceeding with the matter, given the findings of the AGSA audit report.

In September last year, Minister Creecy requested the AGSA to expand its audit of the procurement process for the new DLCM. The expanded scope was to determine if Supply Chain Management (SCM) regulations were strictly followed and if the project specifications included adequate measures to safeguard personal data, given the security-sensitive nature of the system.

Following the audit, the AGSA identified multiple instances of non-compliance with procurement requirements. The irregularities stemmed from violations of SCM prescripts, including the Public Finance Management Act (PFMA), Treasury Regulations, and the Driving Licence Card Account (DLCA) SCM policies. As a result, the entire procurement process was deemed irregular.

Key Findings of the AGSA Report

1. Bid Evaluation Irregularities

   • The AGSA audit revealed that the winning bidder, IDEMIA, failed to meet crucial technical bid requirements.
   • Other bidders were disqualified appropriately, as they also failed to meet technical specifications.

2. Budgetary Concerns

   • All bids exceeded the allocated budget of R486.385 million, highlighting insufficient market analysis.
   • The DLCA used outdated pre-COVID-19 pricing, resulting in an inaccurate budget submission to Cabinet.
   • Cabinet approved a memorandum that did not reflect the true cost of the contract, raising concerns about potential project delays or cancellation due to insufficient funds.

3. Transparency and Fairness Issues

   • The Bid Evaluation Committee (BEC) deviated from predefined bid specifications, relying on subjective judgment due to ambiguous criteria.
   • Discrepancies were identified in the technical evaluation and site visits conducted by the DLCA.
   • The DLCA assessed an unrelated machine instead of the proposed MX8100 model from IDEMIA, undermining the credibility of the procurement process.

4. Data Security Compliance

   • Despite concerns, the AGSA found that bid specifications sufficiently evaluated data protection measures.
   • Some bidders met the criteria for protecting sensitive personal information.

Legal and Financial Implications

The AGSA findings indicate potential transgressions of the PFMA, which states that an accounting officer commits financial misconduct if they allow unauthorized, irregular, or wasteful expenditure. Given these serious infractions, Minister Creecy has opted for legal recourse.

"The department cannot ignore the AGSA’s findings pointing to irregularities in the tender process and violations of the PFMA. Minister Creecy has, therefore, instructed the department to seek a declaratory order from the high court for guidance on how to proceed," the Department of Transport stated.

The court's decision will determine the next steps, potentially leading to the cancellation of the tender, financial penalties, or a revised procurement process. This development underscores the government’s commitment to ensuring compliance with financial and procurement regulations while safeguarding the integrity of public projects.