The Chief Executive Officer of the South African Social Security Agency N.O. v Cash Paymaster Services (Pty) Ltd

SASSA entered into an interim Letter Agreement with the South African Post Office Ltd (SAPO), through its Postbank division, to provide basic banking services to social grant beneficiaries to facilitate electronic payment of grants. The agreement was concluded without a competitive procurement process. Cash Paymaster Services (Pty) Ltd, an existing contractor responsible for cash grant payments whose contracts were nearing expiry, applied to the High Court to review and set aside SASSA’s decision, arguing that the failure to follow a competitive tender process violated s 217(1) of the Constitution, the Public Finance Management Act 1 of 1999 (PFMA), Treasury Regulations, and SASSA’s own supply chain management policy. The High Court upheld the review and interdicted SASSA from contracting with SAPO without a compliant procurement process. SASSA and SAPO appealed to the Supreme Court of Appeal.

The appeal was upheld with costs. The High Court’s order was set aside and replaced with an order dismissing Cash Paymaster Services’ application with costs, including the costs of two counsel.

The case clarifies the application of s 217(1) of the Constitution in conjunction with the PFMA and Treasury Regulations, confirming that competitive procurement is not absolute and that lawful deviations are permissible. It affirms a pragmatic approach to public procurement review, emphasising rationality, public interest, and the absence of an automatic nullity for procedural non-compliance. The judgment is important for intergovernmental contracting and the interpretation of Treasury Regulation 16A6.4.