PROCUREMENT AND CONTRACTING POLICY

Transcription

1 PROCUREMENT AND CONTRACTING POLICY Name of Document: Procurement & Contracting Policy Reference Number: Xxxxx Originator/ Author: Mr. Bulelani Mahlangu Chief Finance Officer Custodian Chief Finance Officer Approved by: Structure: Council Date: 20 June 2016 Effective Date: 27 June 2016 Document Review Date: July 2018 Implementation Responsibility Chief Finance Officer

2 P a g e 2 TABLE OF CONTENTS 1. POLICY STATEMENT INTRODUCTION AND BACKGROUND DEFINITION OF TERMS OBJECTIVES OF THE POLICY SCOPE OF THE POLICY and the PRINCIPLES POLICY REGULATORY AND POLICY DIRECTION Regulatory environment Policy Statement PROCUREMENT GOVERNANCE STRUCTURE University Council Executive Management Committee (EMC) Central Procurement Office (CPO) Multi Functional Sourcing Team (MFST) End-users AUTHORITY TO EXECUTE (DELEGATIONS) DELEGATIONS TO INITIATE AND EXECUTE PROCUREMENT CONTRACTS AND ORDERS PROCURE TO PAY PROCESS PROCUREMENT OF GOODS AND SERVICES PREFERENTIAL PROCUREMENT FRAMEWORK PRE-TENDER Annual Demand Planning Annual Purchasing Plan Suppliers' Database Justification for the purchase and confirmation of funding TENDERING Quotation and tender requirements POST-TENDER Review, approval and authorization of contracts RESOLUTION OF DISPUTES: OBJECTIONS AND COMPLAINTS APPEALS... 15

3 P a g e TERMINATION OF CONTRACTS ETHICS CODES OF CONDUCT DECLARATION OF INTEREST KEY PRINCIPLES IN ETHICAL CONDUCT Equal Treatment Accountability Openness Confidentiality GIFTS AND HOSPITALITY FRAUD AND CORRUPTION TRANSACTIONS WITH UKZN S OFFICIALS, STAFF AND STUDENTS COMBATIVE PRACTICES SANCTIONS FOR INAPPROPRIATE BEHAVIOUR IRREGULAR EXPENDITURE CONCLUSION... 21

4 P a g e 4 1. POLICY STATEMENT This document sets out the University of KwaZulu-Natal s ( the University s ) Procurement Policy. The policy outlines the guiding principles in procurement and emphasizes the adoption of an integrated procurement function within the context of a devolved environment that will assist stakeholders understand the responsibilities and methodologies used by the University for procuring goods and/or services. 2. INTRODUCTION AND BACKGROUND The current Council-approved Procurement Policy has been reviewed, subsequently revised, and aligned with the prevailing statutory compliance requirements. In the formulation of this policy, cognizance was taken of the regulatory environment, the progressive move towards enhanced devolution of accountability and responsibility to budget holders and cost centre controllers, the procurement governance structure, the roles and responsibilities of the various stakeholders and the adoption of ethical standards and best practices within the procurement framework. This policy, which is supported by procurement procedures, has been formulated in a manner that enables the University to transform its supplier interactions and establish a competitive advantage in the procurement of goods and services which best meet the needs of the University. 3. DEFINITION OF TERMS TERM DEFINITION BBBEE Budget Holder CFO College The Broad-Based Black Economic Empowerment Amendment Act, 2013 (Act No. 46 of 2013) and its amendments. A member of the Executive Management Committee to whom any budget has been allocated in writing by the University and/or a person who is delegated the responsibility to officially sanction the tender. The Chief Finance Officer of the University. A cluster of cognate schools in the academic sector, and Support and Students Services Colleges.

5 P a g e 5 TERM CPO Director EMC End-User Executive Financial Manager GRV ICS ICT ienabler ImageNow ITS MTC MoU MFST Procurement Official Project Manager Request For Information (RFI) Request for Tender (RFT) RFQ DEFINITION Central Procurement Office. These officials are located in the office of the CFO and are responsible for the oversight of procurement policy implementation by University students and staff. Director of College Professional Services or the Support Services Director (as applicable). Executive Management Committee. This comprises the deputy vicechancellors, the registrar or registrars and other members of senior management. The student or staff member that requires the sourcing of goods, services, or works to address an operational need in the execution of their duties. Members of the University Executive Management Committee The financial manager of the College/Support Division responsible for financial administration. Goods Received Voucher Information and Communication Services division of the University Information and Communication Technology The browser-based application that allows students and staff quick access to information on the ITS system through secure log-ons. The electronic contracts management software from OrangeNow that is designed to create a paperless work environment at the University by systematically linking contracts to the ITS system. ITS Integrator Management Software Enterprise Resource Management system that is used by the University. Minor Tender Committee. Appointed by the Budget Holder to execute a Minor Tender. Memorandum of Understanding The Multi-Functional Sourcing Team that comprises of subject matter experts and appointed by the Budget Holder to execute the open tender process. An employee of the University that is employed in the Central Procurement Office, College, or Division to perform and facilitate the procurement process. The University official that is delegated by the Budget Holder to oversee the planning, execution and management of people, resources and scope of a project. An RFI is often used as a solicitation sent to a broad base of potential suppliers for the purpose of conditioning suppliers' minds, developing strategy, building a database, and preparing for an (RFP), or Tender. An invitation to submit Tenders, and such a request is in respect of tenders only where the focus on price and or quality. Request For Quotation.

6 P a g e 6 TERM Request For Proposal (RFP) Responsive Tenderer Standard Tender Document Tender Process Tender File Tender Register Tender Value TOR University VC DEFINITION The Request for Proposal. The RFP is generally used in situations where the requestor is looking for the best value solution to resolve a problem, or to deliver goods or services, but is not exactly sure how to achieve it. A person who has submitted a tender that conforms in all material respects to the invitation by the University to tender. A template or base document that is used as a source/guide for tender documentation. The process whereby the University openly approaches the market to source goods, services, or works that are required to fulfil operational needs of the University. The document file that contains all information pertaining to a particular tender, including correspondence, minutes, evaluation reports, contract(s), and contractor performance information. This file is kept by the Procurement Official. A database of all tenders that have been initiated through the Procurement office and it details the key milestones in the tender process. The total cost of the product and/or service (total cost of ownership), including value added taxation (VAT). Where cost is to be incurred over a period of time, total cost can be determined by working out the Net Present Cost of a transaction. Terms of Reference The University of the KwaZulu-Natal which incorporates the erstwhile Universities of Natal, Durban-Westville, and Edgewood College. The Vice-Chancellor of the University.

7 P a g e 7 4. OBJECTIVES OF THE POLICY The objectives of the implementation of this policy and supporting procedures are to: a) create, maintain and continually improve a fair, equitable, transparent, competitive and cost effective procurement system in the University; b) ensure that procurement decisions will be made within a framework of financial efficiency and in support of socio-economic imperatives in South Africa; c) deploy a uniform procurement policy, purchasing threshold values (cut-off values), tender procedures, templates and forms to manage all of the University s purchasing transactions effectively; d) negotiate for the correct item at the right time, in the right quantities, of the right quality and at the right price, from the best source and to the best overall benefit of the University; e) award business on the basis of merit within the ambit of criteria set out in this policy and procedures document; f) set annual targets for and continually promote, accelerate and support the procurement of goods and services from B-BBEE suppliers in line with the B-BBEE Act and the Codes of Good Practice. 5. SCOPE OF THE POLICY and the PRINCIPLES This Policy applies to the procurement of goods and services by any member of the University, including those assigned to affiliated bodies, units and institutes, whether legally autonomous or not. The principles of the procurement policy are: accountability, transparency, cost effectiveness. 6. POLICY 6.1 REGULATORY AND POLICY DIRECTION Regulatory environment The University, as a public higher education institution under the Higher Education Act No. 101 of 1997, as amended, applies the following legislation, including any amendments thereto in order to regulate its procurement environment:- a) The Constitution of the Republic of South Africa of 1996; b) The Broad-Based Black Economic Empowerment Act No. 53 of 2003 (B-BBEE Act);

8 P a g e 8 c) The King Report on Corporate Governance for South Africa of 2002; d) The Prevention and Combating of Corrupt Activities Act No. 12 of 2004; e) The Construction Industry Development Board (CIDB) Act No. 38 of 2000; f) Promotion of Administrative Justice Act No. 3 of 2000; g) Promotion of Access to Information Act (PAIA) No. 2 of 2000; h) The Competition Act No. 89 of Policy Statement a) It is the University s policy to promote efficient, effective, ethical, legal and uniform planning for, and procurement of, all goods, services, consultants and works required for the University s continued proper functioning. b) Procurement at the University must be executed in a manner that conforms to bestpractice procurement principles. The procurement system must be continually reviewed and improved to ensure conformity with the above principles, while supporting and promoting black economic empowerment goals in South Africa. 6.2 PROCUREMENT GOVERNANCE STRUCTURE The structures set out below must give strategic direction and execution of authority to this policy: University Council The University Council oversees, and has overall accountability for, the implementation of, and adherence to this Procurement and Contracting Policy, as well as all procurement activities performed under this Policy. Council delegates the responsibilities for management to the Vice- Chancellor, who in turn may delegate certain functions further to the Executive Management Committee (EMC) Executive Management Committee (EMC) a) The EMC shall approve a set of Procurement and Contracting Procedures to give effect to the Policy provisions contained hereunder. b) Each Executive must, through his/her delegated authority, ensure that a Multi-Functional Sourcing Team (MFST) is appointed, when applicable.

9 P a g e 9 c) Disputes of any nature arising within the MFST must be escalated to the responsible Executive and/or the CFO for resolution. d) The CFO shall exercise such additional functions and powers as may be conferred on him/her in this Policy Central Procurement Office (CPO) The CPO's responsibilities include, but are not limited to:- a) providing a centralized approach, where appropriate, to seek eligible suppliers, communicate the requirements and solicit supplier proposals. The CPO is required to create an environment of competitive alternatives; b) facilitating the planning, managing and negotiating of all University tenders for goods and/or services above the threshold value determined in the related Procurement and Contracting Procedures; c) Facilitating all advertisements for tenders; d) Establishing and approving all purchasing contracts or agreements for all purchases above the threshold value determined in the related Procurement and Contracting Procedures; e) Providing expert advice and support to University staff regarding all aspects of procurement including quotes, determining fair value and preferred suppliers.; f) Providing secretarial assistance at MFST meetings as well as acting as well as the secretariat to assist with any objections or appeals that may be lodged in terms of clauses 8.6 and 8.7 of this Policy Multi Functional Sourcing Team (MFST) The MFST comprises subject matter experts from different functional divisions and stakeholders, brought together to achieve the optimal value for the University when items are procured for or on behalf of the University. This team is appointed to ensure that, where applicable, a tender is carried out in accordance with this Policy and any procurement procedures for the acquisition of goods and services End-users End-user/s have the following obligations: a) To prepare electronic requisitions accurately, well in time, and to provide proper specifications for sourcing the correct item or service. b) To provide a written motivation when single suppliers are requested to be used. c) To refrain from sourcing or making any commitments to suppliers, whether verbal or in writing (such as correspondence, letters of intent, telephonic or written orders,

10 P a g e 10 memorandums of understanding (MoUs), interim supply agreements and formal agreements/contracts) without the formal approval of the designated responsible persons (Executive/Dean/Budget Controller). d) To obtain budget approval in terms of financial delegations. e) To submit requests for new suppliers to the Central Procurement Office to be considered on the University Supplier Database. f) To nominate a project leader for each tender project. g) To ensure that project leaders participate fully in the entire scope of the tender project. h) To ensure that the project leader appointed signs off on invoices to confirm that goods or services were delivered according to requirements. i) To identify the goods or services that suit the requirements of the College/School/Division or Department and advise the relevant Procurement Officials accordingly. j) To obtain approval from the Director responsible for building infrastructure where any goods or services are procured that will have an impact on infrastructure or the operational requirements of the University, and to ensure that sufficient electrical power consumption, space, and the suitability of the area is considered. This approval must accompany the electronic request and no process will be started without it. k) To obtain prior approval from the Director responsible for building infrastructure where any changes/alterations are to be made to existing buildings, offices or new buildings. This signed approval must accompany the electronic request and no process will be started without it. l) For the purchase of any hazardous material, including radioactive materials/items, obtain prior approval via the Occupational Health and Safety section from the relevant authorities (for example, the Department of Health). This approval from the appropriate authority must accompany the electronic requisition and no process will be started without it. m) For the purchase of all items related to Information and Communication Services (ICS), be it computers, network or telephone cabling or points, servers, software, printers or any telephone exchange-related items, obtain appropriate approval from the Director: ICS. This approval must accompany the electronic request and no process will be started without it. Note: ICS must provide a checklist of specific requirements as far as compliance with the various statues are concerned. 7. AUTHORITY TO EXECUTE (DELEGATIONS) 7.1 DELEGATIONS TO INITIATE AND EXECUTE PROCUREMENT a) End-users who intend to purchase goods or services must initiate the process in accordance with the delegations set out in the University s Financial Authority Limits and within the University Council Approved Signatories list limits, as amended from time to time.

11 P a g e 11 b) End-users must ensure that approval to initiate is obtained from the relevant authorised persons and that adequate funds have been approved from their departmental budgets/fund accounts for such a purpose. The electronic financial system has been set up accordingly in order to effect the approval hierarchy. Should there be any changes required to the existing setup, a formal application duly approved by the respective Executive/Dean/Director must be handed to the financial systems personnel for update. c) No procurement should take place without a budget. d) End-users must adhere to the delegations set for the acceptance and allocation of tenders and quotations. 7.2 CONTRACTS AND ORDERS a) All contracts and orders entered into on behalf of the University, except for employment contracts, must only be signed and authorised by the authorised signatory and representative of the University. b) The breakdown of order approvals is in terms of the Guidelines and Principles document for electronic system approvers. 8. PROCURE TO PAY PROCESS 8.1 PROCUREMENT OF GOODS AND SERVICES a) All requests for information (RFIs), requests for proposal (RFPs), requests for quotation (RFQs), requests for sealed quotation and tenders must be issued and administered by the designated Official or Procurement Official. b) Only the designated Official/s and Procurement Official/s are allowed to place orders on behalf of the University. c) All negotiations on procurement matters must be conducted via the Procurement Officials. d) Supplier disputes, except those to be dealt with in terms of clause 8.6 and 8.7 of this Policy, must be managed via the Procurement Officials. Records of all correspondence in respect of disputes, and the minutes of meetings to resolve disputes, must be kept and other official correspondence must be in writing. e) Supplier interaction on supplier performance management issues must be conducted via the CPO.

12 P a g e PREFERENTIAL PROCUREMENT FRAMEWORK The University subscribes to the spirit of the B-BBEE Act and to this end prescribe that all purchasing be done in accordance with the University's Enterprise Empowerment and Development Strategy. This includes but is not limited to: a) Where feasible, the University will, in tender documents, allow sub-contracting and joint ventures with small, medium and micro enterprises (SMMEs) and B-BBEE enterprises where the B-BBEE enterprise or SMME may be unable to fulfil all tender requirements due to the size or nature of the requirement. b) The University will incorporate a "Preferential Procurement" methodology that is applicable to all purchases above R The CFO will determine the methodology and include such information as part of the Procurement & Contracting Procedures Manual. c) The University will record its procurement expenditure ( spend ) and report annually to the EMC on its preferential procurement spend. 8.3 PRE-TENDER Annual Demand Planning The Procurement Officials (Central and Colleges) must consult with relevant departments/divisions/schools in order to submit annual quantities of certain goods and services Annual Purchasing Plan The CPO will, where deemed beneficial in terms of strategic sourcing, analyse past University expenditure to quantify details for specific goods and services for the last financial year, the suppliers and their locations, utilisation statistics, inventory analysis, stock levels, and economic order quantity Suppliers' Database a) The CPO will maintain an updated Suppliers' Database from which suppliers will be selected to satisfy University procurement needs. This database will be used to source quotations for purchases up to the determined value as per the prevailing Procurement Procedures and in cases where a deviation from the normal procurement process has been authorised. b) The CPO will maintain an updated Suppliers' Database from which suppliers will be selected to satisfy University procurement needs. c) Any supplier who approaches the University to supply goods or services will be afforded the opportunity to apply for inclusion on the University's Suppliers' Database.

13 P a g e 13 d) The Suppliers' Database will be analysed at least annually to determine which suppliers should be added to the Suppliers' Database, based on criteria such as the quantity of suppliers within the commodity, the B-BBEE level of the supplier, and the past experience, capacity and market-related pricing of the supplier. e) The CFO will determine and approve, on an annual basis, the applicable criteria for entity registration on the Suppliers' Database. f) Suppliers may be removed from the approved supplier list for the following reasons: i. Being placed in liquidation or declared insolvent; ii. Acting unethically; iii. Giving a false declaration to the University; iv. Fronting; v. Providing goods or services that are not satisfactory and/ or of a poor standard; vi. Failing to perform in terms of the contract; and vii. Doing anything or causing anything to be done which, in the opinion of the University, will or may cause the University indirect or direct financial loss or damage, or potentially damage its reputation. g) The University reserves the right, in its sole and absolute discretion, to remove a supplier from any Supplier database for any reason contemplated in 8.2.3(f) above, or for any other reason determined by the CFO to constitute grounds for removal Justification for the purchase and confirmation of funding Prior to the purchase of goods and services, there must be sufficient justification to demonstrate that there is a need for the goods and services to be provided and that funding is available. Formal confirmation of funding must be obtained prior to engaging the market it must be demonstrated that adequate funds have been made available to cover all relevant costs associated with the acquisition of a good or service. 8.4 TENDERING Quotation and tender requirements The CFO must present a schedule as part of the Procurement Procedures defining the thresholds that are applicable for the different types or methods of procurement for approval by the EMC.

14 P a g e POST-TENDER Review, approval and authorization of contracts a) All contracts must be routed through the University s Legal Services Division for review and onward transmission to the VC/Registrar/CFO or other authorized signatory as stated in the Council approved Signatories List, for approval. b) No Official, Procurement Official, staff member or student of the University may authorize, instruct or direct a supplier to proceed with the delivery or supply of goods and services to the University, prior to a written contract being signed and fully executed by the parties as provided for in clause a) above. c) Any conduct that is in violation of sub-clause b) will be dealt with in terms of the relevant University disciplinary code applicable to staff and students. 8.6 RESOLUTION OF DISPUTES: OBJECTIONS AND COMPLAINTS a) Any person aggrieved by decisions or actions referred to in sub-clause 8.6 c) must lodge within five (5) working days of the decision or action, a written objection or complaint to the CFO against the decision or action. b) The CFO may refer the objection or complaint to the Procurement Official in terms of clause 8.1 d). c) Notwithstanding clause 8.6 b), the CFO may appoint an independent and impartial person not directly involved in the procurement processes of the University ( the Adjudicator ) to assist in the resolution of a dispute regarding: i. any decisions or actions taken by the University in the implementation of its Procurement Policy and Procedures, other than a decision relating to the award of a tender; or ii. any objections or complaints regarding any decision or action or any matters arising from a contract awarded in terms of this Policy. d) The Adjudicator must: i. Take all such steps as may be necessary in the circumstances to attend to, and resolve, the objection or complaint within ten (10) working days of the appointment. ii. Strive to resolve the dispute summarily on the papers before him/her and with the minimum of formalities. For the purpose of resolving the dispute, documentation may be requested from any interested or affected party who must provide the documentation within the time stipulated. In the event that a dispute arises with regard to the confidentiality or otherwise of the documents requested, the Adjudicator shall

15 P a g e 15 make a determination that is just and equitable, having regard to Chapter 4 of the Promotion of Access to Information Act 2 of 2000 and the applicable law. iii. Submit a report to the CFO within three (3) days of determining the dispute. iv. Provide reasons to the CFO if he/she fails to resolve the dispute within the stipulated time period and request an extension of time, if necessary. v. The Adjudicator s decision is final and binding on all the parties concerned. 8.7 APPEALS a) A tenderer aggrieved by the decision to award a tender may lodge a written appeal within five (5) working days of the decision. Only appeals lodged within the five (5) working day period will be considered. b) The procedure for dealing with the appeal is as follows: i. The appeal, clearly and succinctly setting out the grounds of appeal together with any supporting documents, must be lodged at the office of the CFO. ii. The CFO shall provide the CPO with a copy of the appeal and the CPO shall act as Secretariat for the purposes of processing the appeal. iii. The VC shall appoint an Appeals Committee ( the Committee ) comprising of between one (1) to three (3) members depending on the complexity of the issues raised by the appellant. If the Committee comprises more than one (1) person, the VC shall appoint the Chairperson of the Committee. iv. In the event that there are allegations made against third parties, the CPO shall invite the affected third parties, through the CPO, invite the affected third parties to respond to the allegations within five (5) working days. v. After receiving any representations from affected third parties, the CPO shall deliver all the documents relating to the appeal to the Chairperson of the Committee who must decide, within three (3) working days, whether the appeal is capable of being decided on the papers or whether an oral hearing must be convened. c) The Committee shall determine the manner in which the appeal is to be resolved. It shall strive to determine the appeal speedily and with minimum formalities but with due regard to the principles of natural justice. i. The Committee must hear and determine the appeal within five (5) working days of having decided that the appeal is capable of being determined on the papers, or within five (5) working days of the last sitting of the hearing. ii. For the purpose of determining the appeal, the Committee may make a determination on any request for documentation, including copies of the tender document of the appellant or any affected third party who is a party to the appeal. If any dispute arises

16 P a g e 16 with regard to the confidentiality or otherwise of the documents requested, the Committee shall make a determination that is just and equitable, having regard to Chapter 4 of the Promotion of Access to Information Act 2 of 2000 and the applicable law. iii. The Committee shall make a decision to either confirm, vary or set-aside the award made to the preferred bidder. In doing so, the Committee must strive to reach consensus but if this is not possible, the decision shall be determined by the majority vote. iv. If the award is set-aide, the Committee may make any order it considers appropriate regarding the manner in which the appeal needs to be resolved, including awarding the tender to the appellant or any third party who is a party to the appeal. v. The Committee may make a default order if it is satisfied that the notice of the hearing was adequately served on all the affected parties to the appeal. vi. The Committee s decision is final and binding on all the parties concerned. 8.8 TERMINATION OF CONTRACTS a) Notwithstanding anything to the contrary, the CFO/VC/Registrar or his/her delegate may terminate the contract of any supplier contracted with the University, if the supplier :- i. fails to deliver any or all the goods or services within the period specified in the contract or agreement, or any extension thereof granted by the University; ii. fails to perform any other obligation under the contract; iii. in the judgement of the University has engaged in corrupt or fraudulent practices in competing for the contract; iv. ceases trading or winds down trading; v. is financially distressed as defined in terms of section 128 (1) of the Companies Act, 2008; vi. takes steps or has steps taken against it, or effects or has effected against it, any supervision, business rescue, winding up or deregistration, in any jurisdiction; and vii. effects a compromise with any of its creditors generally, which compromise is not in the ordinary course of business; b) Once a contract has been terminated, the procurement process should be invoked to establish a suitable alternative supply.

17 P a g e ETHICS 9.1 CODES OF CONDUCT a) The University commits itself to a policy of fair dealing and integrity in conducting its procurement activities. All Officials, Procurement Officials and role players in the procurement system are required to promote fairness, transparency, independence, mutual trust, respect and honesty. b) The University adheres to the Code of Conduct for Procurement Practitioners and this will guide all Procurement Officials and other role players in their conduct within and with the University. Officials and Procurement Officials who fail to observe this code will be subject to appropriate disciplinary action. c) A Procurement Official of the University who becomes aware of a breach of, or failure to comply with, any aspect of the policy must immediately, in writing, report the breach or failure via the Financial Manager of the College/Support Division to the relevant Director (Professional/Support Services), if and when necessary. d) The EMC will take all reasonable steps to prevent abuse of the procurement system. e) Any conduct that is a violation of this Policy will be dealt with in accordance with the University s disciplinary code. f) No Council members or officials exercising a power or performing a function in terms of this policy, or any other University policy, or any legislation, can be held personally liable in respect of any loss or damage resulting from the exercise of that power, or the performance of that function in good faith. 9.2 DECLARATION OF INTEREST a) All staff of the University must declare to the University details of any private or business interest that he/she or any close family member may have in any proposed procurement process of or in any award of a contract by the University, where the staff member has the ability to influence the decision-making of that transaction. b) A Procurement Official or other role player must recognise and disclose to the University any conflict of interest that may arise and must immediately withdraw from participating in any manner whatsoever in the process relating to the contract/transaction. 9.3 KEY PRINCIPLES IN ETHICAL CONDUCT Equal Treatment All Procurement Officials and other role players must treat all suppliers and potential suppliers equitably.

18 P a g e Accountability End-users, Officials and Procurement Officials must be prudent in their use of University property and funds and must ensure that procurement policies and procedures are followed in a manner that reflects the probity of the system. The abovementioned persons will be held to account for their utilisation of University resources by their line managers and, ultimately, by the Council Openness End-users, Officials and Procurement Officials are only allowed to provide relevant information if such information has been requested by a third party (requester) and where the requester has duly completed and submitted a Request for Access to Records under Section 18(1) of the Promotion of Access to Information Act (PAIA) 2000 as specified in the University PAIA Manual, provided that this clause does not apply to request for information or documents made in terms of clauses 8.6 or 8.7 of this Policy Confidentiality Any information that is the property of the University, or its suppliers or service providers, must be protected at all times. No information regarding any tender, or contract, or tenderer, or contractor, may be revealed, if such an action will infringe on the relevant tenderer or contractor s rights, provided that this clause does not apply to request for information or documents made in terms of clauses 8.6 or 8.7 of this Policy. 9.4 GIFTS AND HOSPITALITY a) Gifts received from suppliers, students, or third parties, with whom any employee or the University has a professional relationship that have a value in excess of R1,000 (one thousand rand) must be recorded in the Gift Register within 10 days of receipt. In the absence of a generally available Gift Register, disclosure of the gift must be reported to the Risk Champion of the employee s College, School, Division or Department or, in the case of Associated persons, to the Registrar. The onus to declare such gifts and/or hospitality lies with the employee or Associated person concerned. b) It is the responsibility of all staff involved in the procurement process to declare their interest and to maintain confidentiality at all times. c) Officials or Procurement Officials must ensure that s/he does not compromise the credibility or integrity of the procurement system through any form of misconduct. 9.5 FRAUD AND CORRUPTION a) The Prevention and Combating of Corrupt Activities Act No. 12 of 2004, the University s Fraud Policy and Response Plan and the Whistle Blowing Policy must be adhered to.

19 P a g e 19 b) The CPO must ensure that proper controls are in place to prevent or discourage fraud. c) All staff of the University must assist the University in combating corruption and fraud in the procurement system. The University will not tolerate any fraud or corruption. 9.6 TRANSACTIONS WITH UKZN S OFFICIALS, STAFF AND STUDENTS a) Persons in the service of the University, or its affiliated entities, including staff and students, are prohibited from conducting business directly or indirectly with the University that entails or may entail a conflict of interest with the University unless the CFO pre-approves that:- i. the goods, product or service in question are unique; ii. the supplier is a sole provider; and iii. it is in the best interest of the institution The prohibition shall also apply to juristic entities of which a member of staff or student is an owner, director, member or shareholder unless the consent of the CFO has been obtained. b) Awards to a close family member (parents, siblings, children) of a member of staff in the service of the University must be declared. c) An Official or staff member of the University may not:- i. use his/her position for private gain and improperly benefit from confidential information obtained as a staff member; ii. take a decision on behalf of the University concerning a matter in which that staff member or his/her close family member has a direct or indirect personal or private business interest. 9.7 COMBATIVE PRACTICES a) The University will employ combative practices in that it will not allow reference to nonexistent competition and the exploitation of errors. b) Any sponsorship promised, offered or granted to the University, which will create either financial or contractual liability, whether directly or through a representative or intermediary, by any person who is a provider of goods or services or prospective provider of goods or services to the University, or who is a recipient or prospective recipient of goods disposed or to be disposed of by the University, must be done via the office of the Executive Director (Corporate Relations) in writing, explaining details of the sponsorship. The Executive Director (Corporate Relations) will notify the EMC about the sponsorship. c) No sponsorship will/should influence any procurement decision regarding any future procurement from that supplier or service provider.

20 P a g e SANCTIONS FOR INAPPROPRIATE BEHAVIOUR The University may, in addition and without prejudice to all other remedies at law, cancel any contract between the University and any supplier, and resolve that no tender from such supplier will be accepted for a period of five (5) years from the date of such decision where it is found that the Supplier: i. Is executing a contract or Service Level Agreement in an unsatisfactory manner; ii. Has offered, promised or given a bribe, or other remuneration, in a direct or indirect manner to the Chairperson, a Committee Member, an Official, Procurement Official, staff member or student of the University, or his/her close family member or any other connected person, for the purpose of obtaining and executing a contract; iii. Has acted fraudulently or in bad faith, or in any other unsatisfactory manner, in obtaining or executing a contract, or that the supplier has managed it/his/her affairs in a manner that has resulted in it/him/her being found guilty of an offence in terms of the Prevention and Combating of Corrupt Activities Act, or Broad-Based Black Economic Empowerment Act, and any other applicable legislation; iv. Has approached a Chairperson, a Committee member, an official, or member of staff, before or after tenders have been invited for the purpose of influencing the award of the contract in its/his/her favour; v. Has misrepresented the B-BBEE status of the company and/or certain facts in order to gain advantage in a tender process; or vi. Has misrepresented any other information.

21 P a g e IRREGULAR EXPENDITURE End users, Procurement Officials, or any party who becomes aware of any irregular expenditure, is obliged to report it to the CFO. The Chief Finance Officer must report all irregular expenditure to Council through the Audit and Risk Committee. Categories of irregular expenditure include: 10.1 Irregular expenditure incurred as a result of UKZN procuring goods or services by means other than through competitive bids and where reasons for deviating from inviting competitive bids have not been recorded and approved by the Budget Holder/CFO/VC/EMC/Finance Committee (each is responsible for certain thresholds); 10.2 Irregular expenditure incurred as a result of non-compliance with a requirement of the University s Delegations of Authority; and 10.3 Irregular expenditure incurred as a result of non-compliance with a provision contained in any applicable legislation. 11. CONCLUSION This policy statement sets the framework for procurement processes at UKZN. It will be reviewed and revised, as appropriate, from time to time to take account of changing circumstances.