Senior Road Accident Fund (RAF) officials terminated an internally operated call centre that cost R25m a year to run and replaced it with an external service provider, Alteram Solutions, that cost the state-owned entity R199m over 13 months. The contract, which was concluded outside of normal procurement processes in 2023, was extended last year for 24 months, again without inviting competitive bids, at a cost of R307m. Total payments to Alteram currently stand at R297m.
The initial contract, concluded in 2023, and a subsequent 24-month extension, were awarded without a public tender or inviting competitive bids. The RAF’s business case for the new customer relationship management (CRM) system justified the change by claiming the old call centre was “not fit for purpose” due to alleged nonresponsiveness, a lack of knowledge among agents, a high rate of repeat calls, and the lack of a central query-handling system. It also cited a recent customer survey showing stakeholder dissatisfaction.
However, an anonymous RAF insider ― in a letter written to parliament ― countered the executives’ justification as “simply not true”. The insider provided detailed performance indicators stating that the RAF call centre consistently published key performance indicators showing: The insider lamented the cost of the outsourced CRM system, noting the RAF spent a fraction of what it cost on the previous call centre, and also claimed the new system was “fraught with issues”. Claimants, attorneys and service providers report unanswered calls, conflicting information, and referral back to RAF regional offices “Claimants, attorneys and service providers report unanswered calls, conflicting information and referral back to RAF regional offices,” the insider’s letter said.
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“The outsourced provider conducts its own QA [quality assurance] and surveys, introducing bias and reducing accountability. Yet the RAF executives brazenly go on public platforms and [to] Scopa [the standing committee on public accounts] with the very same reports that have not been tested.” Another RAF insider claimed a manager responsible for the old call centre had attempted to modernise it, but this was shut down by RAF leadership — only for “this same service to be provided by an external party”. Documents relating to the procurement show significant process irregularities.
In February 2023 senior RAF officials, including those insuspended CEO Collins Letsoalo’s office, hastily compiled and approved a memorandum asking the RAF’s bid adjudication committee (BAC) to ratify the process for participating in a department of employment & labour (DEL) contract with Alteram. This was despite the process not originating from the BAC, as required by the fund’s policy. The request, which included a business case, was compiled and signed off in a 24-hour period by the RAF’s stakeholder relations management (SRM) department.
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