DoT urged to pause driving licence card machine procurement

Minister’s response to parliamentary question adds to the confusion about the process.

Information disclosed to parliament about the new driving licence card machine has led to the Organisation Undoing Tax Abuse (Outa) urging Minister of Transport Barbara Creecy to urgently suspend the controversial procurement process.

In a reply to parliament to a question about the new  machine last week, Creecy said, among other things, that “a service provider has been appointed to assist the department to roll out the new driving licence”.

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Creecy earlier this month instructed the Auditor-General (AG) to expedite and widen the audit scope for the new driving licence card procurement process as new evidence emerged of alleged serious irregularities in the decision to make Idemia Identity and Security South Africa, part of French multinational technology company Idemia, the preferred bidder for the production of the new card.

Read:
‘Big red flags’ around smart card driving licence procurement process – Outa
‘Expedite’ audit of driving licence card procurement process, Creecy tells AG

Outa CEO Wayne Duvenage at the time welcomed Creecy’s announcement that the driving licence card machine tender award and contract will be investigated and indicated that Outa is grateful to Creecy “for taking fast action on this crucial issue”.

“We call on the Minister to exercise her powers to instruct the DLCA [Driving Licence Card Account] to desist from awarding this tender or signing the service level agreement with Idemia,” he said.

Perplexing

However, Duvenage has now expressed concern about Creecy’s response to the parliamentary question, particularly the fact that it states that “a service provider has been appointed”.

Duvenage said Outa believes Creecy should urgently suspend the appointment until the investigation by the AG has been completed.

He was also perplexed by Creecy’s response to another question posed by Rise Mzansi MP Stanford Makashule Gana.

In regard to the procurement of a new driving licence card machine, Gana asked Creecy about:

• The total number of such new machines the Department of Transport (DoT) intends to procure;
• The envisaged cost of procuring the machine or machines; and
• Whether the new machines will be maintained and repaired in South Africa.

Creecy said the DoT intends to procure three machines, “two for the primary site and one for the disaster recovery site”.

“The cost of the machine itself, including the required software for its operations, is R334 407 928,” she said.

But Duvenage stressed that “these numbers don’t add up”.

“The response of R334 million for the ‘machine’ and yet there are three machines,” he said.

The DoT announced at the beginning of this month that Idemia Identity and Security South Africa had been appointed the preferred bidder to produce South Africa’s new smart driving licence cards at a cost of R898 million. The appointment was approved on 8 August 2024.

Deliberate manipulation?

Duvenage said shortly after Idemia was announced as the preferred bidder that there is sufficient evidence to suspend the contract pending an investigation by the AG or another entity and, if the investigation reveals that staff within the DLCA and Idemia have been involved in tender manipulation and rigging, that the contract must be cancelled and redone.

He said then that Outa would hold off on applying for an urgent high court interdict to stop the contract from being signed until it was clear that it would not be cancelled.

Outa further previously told Moneyweb that it had detailed its concerns about the tender in a comprehensive letter to Creecy, which included 11 annexures.

Outa said it is concerned the tender for the card machine has been deliberately manipulated to ensure that a specific bidder is awarded the contract.

It said this manipulation included repeatedly issuing, withdrawing, and reissuing the tender, along with three extensions of the price validity period, which is highly irregular and discouraged by National Treasury’s procurement guidelines.

Read: Transparency concerns around new licence card machine tender [5 Jun 2024]

Duvenage revealed two bid evaluation committee reports, both dated 5 March 2024, for submission to the bid adjudication committee contained different bid values for Idemia’s bid and “points to the high probability of gross tender manipulation”, and they were among the documents Outa had obtained and supplied to Creecy.

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He added that Outa also has copies of correspondence showing that on 4 April 2024, the bid adjudication committee chair wrote to the DLCA acting chief financial officer to inform him that the committee had discussed concerns on 28 March 2024 that its budget of R468 million was insufficient.

The Idemia bid was R762 million, while another bid evaluation committee report shows the Idemia bid as R898 million.

Pricing envelopes tampered with 

Duvenage said Outa has also received information that the pricing envelopes in the bids submitted for the second cancelled tender were tampered with.

He said “disqualified” bidders in the technical evaluation process discovered when they requested the return of their “unsuccessful” tender documents from the DLCA that their sealed “pricing envelope” had been tampered with and opened before pricing was evaluated by the bid evaluation committee.

“This implies the DLCA had broken the rules and opened this document, revealing the tender price to people inside (and possibly outside) the DLCA.

“This raises the possibility of competing bidders being alerted to their competitor’s prices,” he said.

Duvenage further claimed that Outa had received further information that at least one bidder was wrongly marked down on aspects of the technical evaluation. This bidder provided a substantially lower price than Idemia and would most likely have been the successful bidder.

Idemia willing to play open cards

Idemia responded to these allegations by stating it had taken note of the DoT decision to extend the scope of the current audit of the new driver’s licence card procurement process and “will be happy to provide, in complete transparency and with confidence, all the information needed for a thorough and fruitful audit”.

Idemia said it is a leading global provider of driver’s licences with key end-to-end solution references using polycarbonate technology and is proud to be trusted by 600-plus governments, state and federal organisations, and 2 400 customers worldwide.

“Compliance and transparency are top priorities for Idemia, which reaffirms its commitment to systematically align itself with the procedures and regulations of the states in which it operates, as is the case for South Africa.”

Costs of the old machine

In her parliamentary response last week, Creecy said the current driving licence card machine is nearing the end of its lifespan due to its age, which is why the DoT has sourced “a new device”.

Creecy also provided a breakdown of the current machine’s repairs and maintenance costs over the past five years.

These costs were:

• 2019/20: R2 494 493.03;
• 2020/21: R8 442 140.39;
• 2021/22: R4 708 318.37;
• 2022/23: R3 868 724.00; and
• 2023/24: R1 577 525.53.

A breakdown of the current driving licence card machine for 17 days in November 2021 led to a backlog of 383 000 driving licences in December 2021.

This backlog was exacerbated by motorists’ inability to renew their driving licence cards during the Covid-19 hard lockdown.

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