Service Level Agreement

EXHIBIT 10.13
PROVINCE OF THE EASTERN CAPE


DEPARTMENT OF SOCIAL DEVELOPMENT


[LOGO]


OUTSOURCING OF THE PAYMENT OF
SOCIAL SECURITY GRANTS


Service Level Agreement
CPS


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TABLE OF CONTENTS


HEADING PAGE 1. Introduction 3 2. Parties 3 3. Definitions 3 4. Record 5 5. Compatibility of two payment systems 5 6. Interface with HANIS project 6 7. Duties of the service provider 6 8. Training 18 9. Communication plan 19 10. Information 20 11. Financial 21 12. Monthly / daily reconciliation with SOCPEN 25 13. Implementation 25 14. Affirmative action & other economic empowerment plans 25 15. Service provider remuneration 26 16. Electronic payment system 28 17. Sub contractors / partners in consortium 28 18. Customer Satisfaction 28 19. Phasing out of contract 29 20. Adjustments 29 21. Contract regulation and management 29 22. Force Majeure 34 23. Determination of disputes 34 24. Variation / Modification / Waiver 37 25. Waiver of rights 37 26. Domicilia citandi et executandi 38


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1. INTRODUCTION


The principles, philosophies and objectives governing the granting of and the regulation of this service are set out in this agreement. The Agreement serves as the framework of the rights and obligations which will be reflected as substantive provisions in the agreement. Should any matter of a material importance to the performance and implementation of the service have been omitted from this Agreement, the Department of Social Development, Eastern Cape Province, and the Service Provider shall in good faith consider any additional clauses and/or amendments and reduce same in writing.


2. PARTIES


The parties to this agreement are:


2.1 DEPARTMENT OF SOCIAL DEVELOPMENT
PROVINCE OF THE EASTERN CAPE


And


2.2 CPS EASTERN CAPE (PTY) LTD
4TH FLOOR
PRESIDENT PLACE
ROSEBANK
JOHANNESBURG


3. DEFINITIONS


IN THIS AGREEMENT, UNLESS THE CONTEXT OTHERWISE INDICATES, THE WORDS AND EXPRESSIONS SET FORTH BELOW SHALL BEAR THE MEANINGS AS DEFINED. IT MUST BE NOTED THAT IN THIS DOCUMENT:


- - reference to any one gender shall include the other gender


- - a natural person includes an artificial person and vice versa


- - the singular includes the plural and vice versa


BENEFICIARIES / APPLICANTS Any person to whom social assistance is rendered
under the Social Assistance Act, 1992, as
amended


COMMUNITY People who ordinarily reside in the Province of the
Eastern Cape


DEPARTMENT The Department of Social Development in the
Administration of the Eastern Cape Government


ENROLMENT Electronic registration process of the
identifying details, composing of fingerprints,
capturing of a digital photo and issuing of a
pension data card to each beneficiary in the
Province of the Eastern Cape


HANIS Home Affairs National Identification System


IDENTITY DOCUMENT A beneficiary shall be identified at enrolment
by using


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his/her 13 Digit bar-coded RSA identity document


IMPLEMENTATION TIMETABLE The implementation plan as mutually agreed upon
by the Department and the Service Provider, in
accordance with the specifications set in the
Tender Document


IDENTIFICATION 13 digit bar-coded RSA Identity Document shall
be used


MANAGEMENT COMMITTEE The team that shall represent the Department and
the Service Provider


PAYMENT MONTH A calendar month


PAY POINTS Designated venues at which the payment of grants
may be undertaken. These may be:
Mobile - payment equipment mounted in vehicles,
adapted to the terrain
Fixed - ATM type services for payment at mutually
agreed upon venues
Portable - payment equipment which is easily
transportable, and which can be used in a
variety of venues
The list of pay points is attached to this Service
Level Agreement/Contract as Annexure A


PROVINCE The province of the Eastern Cape


SECURITY SERVICES The security services (both cash in transit and
guarding) that shall be provided to the Service
Provider in terms of the agreement contained in
the tender documents


SERVICE PROVIDER CPS Eastern Cape (Pty) Ltd


SITA State Information Technology Agency


SOCPEN Government's computerised social assistance grant
system


SOCPEN SCHEDULE Schedules detailing cut-off dates for
interaction with SOCPEN, as agreed upon by
National Department and the Provinces


SYSTEM The adapted automated applications system that
shall be used to enrol and render payments to
beneficiaries, which shall be interfaced with
SOCPEN


TENDER DOCUMENT The tender as proposed to the Province by the
Service Provider for rendering a comprehensive
enrolment, payment and communication service to
the beneficiaries in the province of Eastern
Cape


VERIFICATION The verification of each beneficiary at payment
by using the technology to verify the
relationship between the beneficiary and their
fingerprints captured previously during
enrolment.


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4. RECORD


The SERVICE PROVIDER submitted a tender to the PROVINCE, which was accepted by the PROVINCE on 11 DECEMBER 2001. The contract was signed on 22 August 2002, and is valid for a 3 year period, commencing 1 November 2002, with provision for an extension for a further 2 years, if mutually agreed to.


THE PROVISIONS AS SET OUT IN THE TENDER DOCUMENT SHALL BE SUPPLEMENTARY TO THIS DOCUMENT IN ALL RESPECTS. ANY CHANGES TO THE PROCEDURE AS SET OUT IN THE TENDER DOCUMENT SHALL BE MUTUALLY NEGOTIATED AND AGREED TO. NO CHANGES TO ANY AGREEMENT CONTAINED IN THE TENDER DOCUMENT SHALL BE MUTUALLY NEGOTIATED AND AGREED TO. NO CHANGES TO ANY AGREEMENT CONTAINED IN THE TENDER DOCUMENT OR THIS AGREEMENT SHALL BE BINDING UNLESS REDUCED TO WRITING.


5. COMPATIBILITY OF TWO PAYMENT SYSTEMS


5.1 Although two SERVICE PROVIDERS have been appointed to render pension
payment services in the PROVINCE each system should have a list of
beneficiaries falling under its area of operation as clearly stated
underneath:


5.1.1 A BENEFICIARY must withdraw his / her money from the SERVICE
PROVIDER allocated to his/her area,


5.1.2 The SERVICE PROVIDER must ensure that the same BENEFICIARY is not
enrolled and paid by another SERVICE PROVIDER. This will be achieved
be each SERVICE PROVIDER submitting a data file of all beneficiaries
enrolled on a monthly basis.


5.1.3 A BENEFICIARY must not be able to withdraw money from the first
SERVICE PROVIDER and then also withdraw money from the second
SERVICE PROVIDER with the same pension data card,


5.1.4 A new pension data card should be manufactured and issued when a
BENEFICIARY moves from one SERVICE PROVIDER to the other SERVICE
PROVIDER,(THE DEPARTMENT WILL PAY FOR THE 1ST REPLACEMENT ONLY, THE
BENEFICIARY SHALL PAY FOR FURTHER REPLACEMENT CARDS).


5.1.5 The design of pension data cards of both SERVICE PROVIDERS shall be
approved by the Department,


5.1.6 Both SERVICE PROVIDERS shall use the same biometric identification
method,


5.1.7 Only one on-line reporting system must be developed by each SERVICE
PROVIDER from which reports can be obtained by the DEPARTMENT when
needed.


6. INTERFACE WITH THE HANIS PROJECT


6.1 In order to interface with the HANIS project in future, the SERVICE
PROVIDER must take note of the following information:


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6.2 The SERVICE PROVIDER should take cognizance of HANIS, specifically the
smart ID card project currently being undertaken by the Department of Home
Affairs.


6.3 The SERVICE PROVIDER must take cognisance and be aligned with the
development of the South African Government's standards for biometrics
fingerprints, when approved and finalised. When these standards have been
finalised, the level of inclusion and impact on the SLA shall be evaluated
and negotiated.


7. DUTIES OF THE SERVICE PROVIDER


7.1 THE SERVICE PROVIDER SHALL RENDER THE FOLLOWING SERVICES:


7.1.1 ENROLMENT of all BENEFICIARIES and their nominated procurators
(including those paid via ACB and Post Office) in the PROVINCE of
the Eastern Cape;


7.1.2 Payment of all BENEFICIARIES or their duly nominated procurators
electing to receive their payment in cash;


7.1.3 Dissemination of information to the BENEFICIARIES as and when
requested by the DEPARTMENT; as per the SOPCEN message field.


7.2 IN ORDER TO RENDER THESE SERVICES, THE FOLLOWING WILL APPLY IN RESPECT OF:


ENROLMENT


7.2.1 In respect of ENROLMENTS the SERVICE PROVIDER shall be responsible
for:


7.2.1.1 The identification and obtaining of ENROLMENT sites, in
addition to the enrolment sites already identified by the
Department for cheque payments.


7.2.1.2 Consultation with the DEPARTMENT to confirm and approve the
identified sites,


7.2.1.3 The ENROLMENT of BENEFICIARIES AUTHORISED BY THE DEPARTMENT.


7.2.2 The ENROLMENT process must consist out of the following minimum
steps:


7.2.2.1 The capturing of the four (4) fingers with the best minutiae
of the BENEFICIARY,


7.2.2.2 The capturing of the four (4) fingers with the best minutiae
of the BENEFICIARY and of the Procurator when applicable, and


7.2.2.3 Capturing of a Digital Photograph.


7.2.3 The ENROLMENT of BENEFICIARIES requires the Service Provider to
validate/verify the BENEFICIARY'S identity based on a beneficiary's
13 digit valid bar coded South African Identity Document and
photograph to be produced for each BENEFICIARY, in an accurate and
reliable manner.


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7.2.4 The ENROLMENT of BENEFICIARIES shall be evidenced by the production
of complete lists (available electronically in a database format and
also in hard copy format) of BENEFICIARIES enrolled by pay point.
The database information shall provide a query and interrogation
facility by any field within the database. The lists of enrolled
beneficiaries will be reconciled to the BENEFICIARY payment files
made available to the SERVICE PROVIDER by the DEPARTMENT at the
commencement of the contract or any revised list supplied
subsequently.


7.2.5 The ENROLMENT process shall contribute positively to minimising the
risk of fraud and corruption.


7.2.6 The SERVICE PROVIDER shall ensure that a BENEFICIARY with the same
ID Number is not ENROLLED more than once by the same Service
Provider. A procedure for detection of duplicate enrolments due to
fraudulent, multiple IDENTIFICATION NUMBERS shall be negotiated and
established. Once the HANIS system is functional, a cold search of
suspected duplicated fingerprints will be done as and when required.
The cost of the cold search shall be for the account of the
Department.


7.2.7 The ENROLMENT process shall consist of both the initial bulk
ENROLMENTS (the immediate ENROLMENT of all BENEFICIARIES and their
elected procurators onto the new payment system) and on-going
enrolments throughout the contract period (the continued ENROLMENT
of new BENEFICIARIES in the PROVINCE).


BULK ENROLMENT


7.2.7.1 This will take place according to an implementation timetable
as agreed upon by the DEPARTMENT and the SERVICE PROVIDER,
which is attached to this agreement as Annexure B. Bulk
ENROLMENT is to take place with the least disruption to the
payment process and the least inconvenience to the
BENEFICIARY.


Bulk Enrolment - Cheque Payments


7.2.7.1.1 Enrolment is to take place at least at the payment sites for
all current cheque payment methods. The BENEFICIARY shall be
enrolled before receiving his / her payment.


Bulk Enrolment: Post Office Payments


7.2.7.1.2 ENROLMENT of current BENEFICIARIES paid through the Post
Office shall take place in accordance with a timetable and at
venues as mutually agreed upon.


Bulk Enrolments: ACB Payments


7.2.7.1.3 Bulk ENROLMENTS of current ACB cases shall take place in
accordance with a timetable and at venues as mutually agreed
upon. Individual letters will be sent by the DEPARTMENT to
every BENEFICIARY to advise them of the ENROLMENT venue and
date. The DEPARTMENT will devise a management plan to deal
with those


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BENEFICIARIES who do not respond to this communication and
whose grants need to be suspended. No pension card shall be
issued for ACB beneficiaries.


Bulk Enrolments: Institution Payments


7.2.7.1.4 Bulk ENROLMENT of institution cases will be done at the
institutions, in accordance with a timetable as mutually
agreed upon.


Bulk Enrolment: Bed-Ridden Beneficiary


7.2.7.1.5 ENROLMENT of BENEFICIARIES who are bed-ridden, together with
their procurators, shall have to be undertaken in their homes,
in accordance with a programme as mutually agreed upon. The
DEPARTMENT shall advise the SERVICE PROVIDER of identified
cases.


ENROLMENT OF NEW APPLICANTS (ONGOING)


7.2.7.2 Ongoing ENROLMENTS shall take place at venues and dates as
agreed upon between the DEPARTMENT and SERVICE PROVIDER for
the duration of the contract period.


7.2.7.3 The ENROLMENT of bed-ridden BENEFICIARIES in their homes and
institutional BENEFICIARIES will have to take place for the
duration of the contract.


THE DEPARTMENT SHALL:


7.2.8 Assist the SERVICE PROVIDER with the execution of a communication
plan for the ENROLMENT of BENEFICIARIES,


7.2.9 Update the SOCPEN system with data that shall enhance the ENROLMENT
process such as:


7.2.10 Capturing of information of the procurators appointed by
BENEFICIARIES, and


7.2.11 Allocating codes to future pay-points before commencement of
ENROLMENT at a specific venue, and


7.2.12 Provide a help desk facility at each paypoint.


7.3 PAYMENT RELATED OPERATIONAL REQUIREMENTS


PAY POINTS


7.3.1 With the phasing in of the new system, payment shall take place at
existing Pay points for the first 3 months.


7.3.2 The SERVICE PROVIDER in conjunction with the DEPARTMENT shall, where
necessary, acquire convenient and suitable payment facilities from
where BENEFICIARIES will be paid.


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7.3.3 The creation or change of any PAY POINTS shall only be considered
after full consultation between the affected COMMUNITY, the SERVICE
PROVIDER and the DEPARTMENT, which retains the right of final
approval.


7.3.4 As far as possible PAY POINTS should be located in community halls
or other similar facilities as may be agreed between the DEPARTMENT
and the SERVICE PROVIDER.


7.3.5 The SERVICE PROVIDER should notify the DEPARTMENT, who shall make
the final decision, where BENEFICIARIES are to be moved between pay
points.


7.3.6 PAY POINTS should be accessible to all frail and disabled
BENEFICIARIES.


7.3.7 Where practically possible and financially cost effective a pay
point must not service more than 1 000 BENEFICIARIES per day.


7.3.8 The scheduling of BENEFICIARIES and equipment must take into account
the capacity of venues available at PAY POINTS to prevent as far as
possible overcrowding and unacceptable queues.


7.3.9 A BENEFICIARY should not be in a queue for more than two (2) hours
during the specified payment hours.


7.3.10 The distance that a BENEFICIARY needs to travel to get to a pay
point should not exceed 20 km. This will be jointly determined by
the DEPARTMENT and SERVICE PROVIDER.


7.3.11 Mobile PAY POINTS should be within a 5 km radius from where the
BENEFICIARIES reside. This will be jointly determined by the
DEPARTMENT and SERVICE PROVIDER.


7.3.12 No hawkers / money lenders and other vendors or unauthorized
individuals shall be allowed on the premises of pension payments,
unless agreed to by the Department.


7.3.13 A Paymaster shall operate each payment unit during payout.


PAY POINT FACILITIES


7.3.14 SERVICE PROVIDERS are expected as part of their social
responsibility obligations to contribute towards developing the
infrastructures at pay points and enrolment points. A pay point and
enrolment point should, as far as possible, meet the following
criteria as prescribed in the national norms and standards:


- Accommodation (permanent building or a marquee),


- Toilets (permanent and / or mobile),


- Chairs (in case of temporary pay point collapsible
chairs are preferred),


- First Aid Kit, wheel chairs and collapsible beds,


- Electricity or a generator,


- Water,


- Where possible the number of BENEFICIARIES should be
in-line with the size of the venue, and


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- Suitability for disabled and old age BENEFICIARIES.


7.3.15 The following nationally approved norms and standards are not
included above for practical reasons. However the objective of the
SERVICE PROVIDER and DEPARTMENT SHALL be to implement these
remaining norms and standards over a period of time. These
facilities are:


- Telephone lines,


- Computer lines, and


- Security Fence. A fence shall be constructed, where
possible, 10 meters round the pay point as a security
measure.


7.3.16 Six months after signing the Service Level Agreement it shall be
expected from the SERVICE PROVIDER to provide the DEPARTMENT with a
report on the conditions at each PAY POINT measured against the
above criteria.


7.3.17 The DEPARTMENT shall evaluate the infrastructures at PAY POINTS on a
regular basis throughout the contract period.


PAY TIMES


7.3.18 The SERVICE PROVIDER shall, in consultation with the DEPARTMENT,
make payments to BENEFICIARIES at fixed PAY POINTS during normal
office hours, that is from 08h00 to 16h00 weekdays, excluding public
holidays.


7.3.19 Cash payment of grants at any pay point, whether fixed or mobile,
may not continue after 16h00. Should there be extraordinary
circumstances which make this impossible, the DEPARTMENT (in the
form of the management committee representative for that region) or
Department representative at paypoint, must be informed, in order to
give prior approval.


7.3.20 Cash payment of grants on the new system shall be introduced in
terms of a timetable to be agreed upon in writing by both the
DEPARTMENT and the SERVICE PROVIDER.


7.3.21 The SERVICE PROVIDER must ensure that the pay dates coincide with
the cut-off dates as determined by the National Department of Social
Development.


7.3.22 In case of exceptional circumstances, the SERVICE PROVIDER shall be
expected to re-schedule payments to enable beneficiaries to receive
their payouts in that pay period. That can only happen after
consultation with the DEPARTMENT and communication with the affected
BENEFICIARIES.


7.3.23 The SERVICE PROVIDER must communicate with the BENEFICIARIES to
inform them of the next month pay date.


7.3.24 The Service Provider must develop contingency plans for all events
which could affect the payment of grants. All rescheduling in the
event of non-payment of a pay point must be undertaken in
conjunction with the Department. In all cases, should a


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pay point not be paid, payment must be rescheduled within a maximum
of 5 working days.


7.3.25 Following their official pay days beneficiaries may attend any pay
point in the nominated pension district to collect payout.


7.3.26 The Service Provider must develop contingency plans for all events
which could affect the payment of grants. All rescheduling in the
event of non-payment of a paypoint.


PAY METHOD


7.3.27 The service provided via the system shall result in improved
citizen-service. A minimum level of service shall include meeting
the agreed ENROLMENT and implementation deadlines referred to in
this Service Level Agreement.


7.3.28 The following steps must be regarded as the minimum steps that must
be followed when paying out a BENEFICIARY:


7.3.28.1 The system must ensure that only a valid enrolled BENEFICIARY
is going to be paid.


7.3.28.2 The system must ensure that the correct amount of money is
paid to the correct BENEFICIARY, according to the instructions
received from SOCPEN.


7.3.28.3 Nobody except the BENEFICIARY or his / her procurator must
handle the money that is paid.


7.3.28.4 The system must ensure that the BENEFICIARY knows when the
next pay day as well as follow-up pay day shall be for the
following month.


7.3.28.5 The system must ensure that the BENEFICIARY does not draw the
same amount of money either on the same day at a different pay
point or later on in the month again.


7.3.29 Payments must follow the following sequence:


- Disability grants - first,


- Old Age grants - second,


- War Veterans grants - third; and


- The rest.


7.3.30 At PAY POINTS war veterans and old age BENEFICIARIES shall have a
special queue while child support grant and other grants shall have
a different queue where practically possible in conjunction with the
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