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Public procurement reforms underway

Public procurement reforms underway [Image: www.pcm.com]

In a bid to improve spending on goods and services, government will roll out public procurement reforms over the next three years. Finance Minister Nhlanhla Nene announced this when he tabled the Medium Term Budget Policy Statement in Parliament, Cape Town.

The Minister said budgetary controls on non-essential items, innovative procurement reforms and strengthened cost-containment measures will encourage more effective use of resources in the years ahead.

“In the February budget speech, I emphasised the urgent need for improved efficiencies and effectiveness in public procurement. I indicated that the modernisation of supply chain management would target better use of technology,” he said.

The Minister said a lot has been achieved since then, including:

  • The establishment of government’s eTender portal, which provides a single point of entry to business opportunities with government, which in the process enhances transparency and reduces the time and cost of accessing tender documents;
  • Ensuring that a Central Supplier Database is operational, easing the administrative burden for business and government alike. More than 20 000 suppliers have registered and a total of 9 500 have been verified since September 2015;
  • The transversal contract for Learner Teacher Support Material has been completed, and the highest contract price for Grade R stationery is R115, inclusive of packaging and delivery;
  • This month, Treasury launched a buying site for high volume-low value items, similar in design to commercial e-commerce sites, enabling supply chain management practitioners to purchase routine items through www.gcommerce.gov.za; and
  • A consolidated Procurement Bill is being developed to rationalise the more than 80 legal instruments, guidelines and instruction notes that currently apply.

The Minister said a framework has been developed to standardise public procurement reporting, supported by a training programme for responsible officials.

“Further enhancements that support SMMEs in the area of electric bids, quotations and technologies will be implemented in 2016/17. Tender documents will be made user-friendly and easy to comprehend.

“The number of documents needed for a tender will be reduced and they will be customised to reflect the diversity of procurement processes. Buying a filing cabinet is different to hiring an advisor or building a school, yet our present systems do not reflect these differences adequately,” the Minister said.

Minister Nene said public procurement is big business and that the public sector spends over R500 billion a year on the procurement of goods and services.

“Making better use of technology is important but it is not enough.

“Reform of a supply chain management will remain a central priority to generate short and medium term savings but more importantly to bring value for money and to combat corruption,” he said.

National Treasury said, meanwhile, that a single procurement bill is being developed to replace the more than 80 different legal instruments, guidelines and instruction notes that govern public procurement. The Office of the Chief Procurement Officer will present a draft bill for comment in January 2016, the National Treasury said. 

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