OUTA investigation leads to blocking of crooked driving licence card machine contract

An OUTA investigation which identified irregularities in the massive driving licence card machine tender has resulted in legal action now being taken by the Ministry of Transport to block the tender award.

“This outcome is the direct result of effective civil intervention, when civil society organisations work responsibly with whistleblowers to build strong evidence-based cases that halt grossly overpriced and what is clearly a corrupt tender from being awarded. We also hope that those involved in the bid evaluation and adjudication process will be held accountable,” says OUTA CEO Wayne Duvenage.

Duvenage says OUTA is grateful that the Minister listened and took the matter further, as OUTA believes there is clear evidence of wrongdoing and this is 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,” says Duvenage.

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

The procurement was managed by the Driving Licence Card Account (DLCA), a state-owned entity under the Department of Transport which exists solely to produce driving licences. The DLCA was replacing its sole card machine, which has broken down repeatedly.

Today, 5 March 2024, Minister of Transport Barbary Creecy announced that she has ordered legal action to block the award.

“The Minister of Transport, Ms. Barbara Creecy has instructed her department to lodge a high court application for a declaratory order regarding the Driving License Card Machines tender found to have been irregular by the Auditor-General South Africa (AGSA),” said the Department of Transport in a statement today. The department’s statement says the declaratory order is needed for guidance on the way forward.

This investigation was initiated in September last year, immediately after the award was announced and OUTA contacted the Minister, raised concerns about the tender process and award, and handed over a lengthy investigation report.

OUTA had followed the procurement process for more than two years, after following the problems with the driving licence card machine. The tender had repeatedly been advertised, withdrawn and readvertised. Last year, OUTA also received whistleblower documents with added to our concerns and were included in our dossier to the Minister.

The Minister listened, and handed the OUTA information to the AGSA for further investigation. The AGSA was already conducting a preliminary review of the award, and expanded this review after the Minister handed over the OUTA report.

Today the Minister, using the AGSA report, outlined some of the problems. She provided the executive summary of the AGSA report.

The OUTA dossier included concern that the contract price – which the department and DLCA had refused to specify – had ballooned from the DLCA’s budgeted R468 million to as much as R898.597 million. OUTA had already been investigating this tender for some time, after receiving information from whistleblowers.

The AGSA’s executive summary confirms receiving the OUTA report and investigating.

“On 5 September 2024, the auditor-general received a request from the minister of transport, Ms Barbara Creecy, MP, to audit allegations of tender process manipulation for the smart driver’s card machine at the Driving Licence Card Account (DLCA) and its parent department, the Department of Transport (DoT). This followed widespread public concern over the appointment of IDEMIA South Africa (IDEMIA) as the service provider. The minister’s communication was accompanied by a letter from the Organisation Undoing Tax Abuse (OUTA), in which specific allegations of an irregular procurement process were made,” says the AGSA report.

“Our audit of the DLCA’s SCM processes revealed irregularities in the tender evaluation. IDEMIA, the winning bidder, failed to meet key bid technical requirements,” says the AGSA report.

The AGSA report notes that the DLCA conducted a site visit during the procurement process, supposedly to confirm that the bidder had the required capability, but “the DLCA chose to inspect an unrelated machine”. The AGSA report extract does not say where this site visit was, but OUTA understands it was in Europe.

More information

A soundclip with comment by OUTA CEO Wayne Duvenage is here.

OUTA’s statement in September, outlining the information provided to Minister Creecy, is here.

The Department of Transport statement from the Minister today is here and the executive summary from the AGSA report is here.

More on OUTA’s criticism of the failure to procure the driving licence card machine is here.