The alternative payments scheme was suggested two weeks ago by the expert panel set up by Sassa and Black Sash under the supervision of the court.
Treasury director general Dondo Mogojane says Sassa jumped the gun by excluding the Post Office from three of the four services Sassa required.
Sassa and Sapo are yet to reach a deal for the payment of social grants and their negotiations have been pushed back to November 17
The Sassa and Sapo have been entangled in a lengthy negotiation battle to try work out a deal for the payment and management of social grants.
Sassa and Sapo appeared before a joint parliamentary meeting on Tuesday and are attempting to work out a deal for the payment of social grants
Five months now remain for Sassa to find an alternative service provider to handle the core aspects of the grants scheme.
What Sassa is now proposing is that the bidding process be reopened on November 3 2017.
The offer follows talks between the two entities in what has been described as a "closed procurement process".
Parliament’s social development portfolio committee will seek legal advice on whether to summon Dlamini.
With more than half its jobs vacant, Sassa has until 2021 to find a solution to distribute grants.