Supply Chain/Procurement Management Western Cape Government. 12 September 2013
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1 Supply Chain/Procurement Management Western Cape Government 12 September 2013
2 Provincial Spend Budget 2012/13=R 40b R R R R Personnel Goods & Services Capital Transfers
3 Procurement Spend R R /13=R 11,573 b R R R Dept of Premier R R Other Community Safety R R Education Health Social Development
4 Legislative Framework governing procurement Constitution of the Republic of South Africa (Act No. 108 of 1996) - Section 217 states that government procurement systems must be Fair, Equitable, Transparent, Competitive and Cost Effective Fair, Transparent, Competitive, Cost Effective Equitable Public Finance Management Act (Act No. 1 of 1999) Municipal Finance Management Act (Act No. 56 of 2003) Construction Industry Development Board Act (Act No. 38 of 2000) Preferential Procurement Policy Framework Act (Act No. 5 of 2000) Broad Based Black Economic Empowerment Act (Act No. 53 of 2004) PFMA MFMA CIDB PPPFA BBBEE Public Sector Clients Public Sector Clients Public and Private Sector Clients Public Sector Clients Public and Private Sector Clients
5 Section 217(1) of the Constitution provides the basis for procurement by determining that: When an organ of state in the national, provincial or local sphere of government, or any other institution identified in national legislation, contracts for goods and services, it must do so in accordance with a system which is fair, equitable, transparent, competitive and cost effective.
6 Supply Chain Management SCM could be described as a function that ensures that goods and services are delivered to the right place, in the right quantity, with the right quality, at the right cost and at the right time. These are the underlying principles that drives any procurement process. This process is aimed at: As its primary function to render services to the public; and As a secondary function to address socio-economic benefit.
7 Setup in the Province A Provincial Treasury must promote and enforce transparency and effective financial management The Province is committed to proper transparent and accountable governance that is mainly aimed at how we conduct our daily business (governance) and interact with our people (citizens and employees); This vision is captured as: To be the best run regional government in the world; which seeks to ensure that the organisation and its people are able to effectively deliver on the other objectives; and With a strategic focus on Management for Results aimed at performance through achieving desired outcomes and ultimate impact, using performance information for internal management learning and decision-making and accountability in reporting results to stakeholders.
8 Provincial Context Supply Chain Management vests under the auspices of the accounting officers of each institution /department in the Province whose role it is to deliver the services that each is responsible for, in a cost effective and efficient manner; This is done via the accounting officer s access to two main resources, i.e. Personnel and Goods & Services; Central to this responsibility is that of good, clean and accountable and transparent decision making in the supply chain management process through adherence to legislative requirements and good governance as the guiding principles.
9 Procurement Methods Informal bidding- purchasing to the value of R Competitive bidding- purchasing more than R Limited bidding where there is a sole supplier or limited suppliers Contracts arranged by National Treasury Provincial Treasury Government agencies Other organs of state Public Private Partnerships
10 Preferential Procurement and BBBEE The PPPFA, Act 5 of 2000 incorporates the 80/20 and 90/10 preference point systems as discussed earlier; Definitions contained in the B-BBEE Act and Codes of Good practice is used, e.g. Black people instead of HDIs. B-BBEE status level attained by a tenderer must be used to determine the number of points scored outof10or20byatendererforb-bbeecontribution. Verification Certificates (indicating B-BBEE Status Level of contributor) that are issued in terms of the B-BBEE Codes of Good Practice (Balance Scorecard Methodology) will be used to calculate points out of 10 or 20 which ratings will be conducted by Verification Agencies accredited by SANAS;
11 Preferential Procurement and BBBEE - continued Bidders with annual turnover of less than R5million qualify as Exempted Micro Enterprises. Automatic level 4 B-BBEE status level. Evidence of such qualification must be issued with a certificate by a registered auditor or accounting officer or an accredited verification agency. Evaluation of bids on functionality Clear indication must be provided in bid documents if bids will be evaluated on functionality. Evaluation criteria must also be objective. Evaluation criteria, the weight for each criterion, applicable values and the minimum qualifying score (for each bid on its own merit) must be indicated in bid documents; Bids failing to achieve qualifying score for functionality must be disqualified. Bids achieving the minimum qualifying score must be evaluated further in terms of points for price and B-BBEE status level contribution.
12 Initiatives 1. Supplier Database Revision for the Provincial Departments Move toward compulsory registration on the supplier database that will manage and house tax clearance certificates, declarations and disclosures and certain bid documents that require annual submission once off for all bid processes as a central governance management tool for the Province; Move toward easy access and transacting to eliminate many documents being submitted many times over in different tender processes by suppliers. Currently as at 23 August 2013 the database has: duly registered suppliers in total; suppliers semi complete registered suppliers on the database
13 Initiatives continued 2. E-procurement solution (IPS) Electronic invitation of quotations to suppliers duly registered for a commodity on the Western Cape Supplier database Roll-out in the long term for formal bids as well 2 pilot sites have now been launched at Health Head Office and Worcester hospital The nominated officials (buyers and approvers) of the pilot sites have been formally trained as well as system controllers within PT Pilot site went live on 15 May 2013 publishing the first RFQ in the production environment Training to suppliers on selected pilot commodities have been provided to pilot site suppliers via pod casts, one-on- one training Internet access and registration on the database is the only requirement to receive a bid invitation via the new e-procurement solution
14 Initiatives continued 3. Supplier Open Days These initiative are aimed at to exposing the business community (suppliers/ vendors) to all the opportunities that exist for doing business with government, both at Provincial and Local level; Foster relations between the stakeholders of BBBEE and SMME Development, harness cohesion between Local Economic Development and Supply Chain Management in the provincial and local spheres; Inform the Public on the legislative requirements in Government Procurement; Facilitate relations between the Provincial and Local spheres of Government, external stakeholders in the supply chain management environment and suppliers; The general approach is a more holistic one toward supplier development.
15 Initiatives continued 4. Red Tape Reduction programme The key requirements of whether something constitutes Red Tape are unnecessary and burdensome administrative and regulatory requirements. Red tape can involve: overlap and duplication insurmountable paperwork resulting in time delays on business unnecessary or inflexible regulations lengthy delays in processing inefficiencies in the system Project identifies and manages the reduction of Red Tape in supply chain management processes.
16 Initiatives continued 4. CIDB Initiatives: The Construction Industry Development Board (CIDB) is mandated through CIDB Act 38 of 2000 to support contractor development and emerging sector participation throughout government and industry. MINMEC specifically, has mandated CIDB in collaboration with the National and Provincial Departments of Public Works to devise and implement a National Contractor Development Programme (NCDP). NCDP Summary Framework (2010) establishes the parameters for implementation.
17 Initiatives continued 5. Drive and focus on SCM transparency, accountability and efficiency: Institutional clarity on policy and procedure; Establishing a credible foundation for a culture of accountability and transparency; Resources to fight poor governance and malpractices; Efficiency of broader budgeting spend that is growth and development orientated; Better planning of tenders; Improve specifications and post-tender contract management; Avoid the snapshot view but take cognisance of long term impact that delivers efficiency and value for money.
18 THANK YOU! DANKIE! ENKOSI!
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