Adopting contract management framework a lesson for government
Government entities are making progress implementing National Treasury’s (NTs) Contract Management Framework released in 2011, Paul Maddison, Managing Director at Realyst Contract Management, tells SmartProcurement.
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Further PPPFA updates published
National Treasury (NT) issued further guidelines on its amended Preferential Procurement Policy Framework Act (PPPFA) on December 2, just days before today’s December 7 deadline when the amendments become active.
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Irregular state expenditure jumps 62%
Government spent R26,4-billion in 2010 in ways that contravened laws and regulations, BusinessDay reports.The national and provincial governments and their entities notched up R21-billion in irregular expenditure last year, a 62% rise over the previous year’s R13-billion, with unauthorised expenditure adding a further R3,8-billion (R8,9-billion), and fruitless and wasteful expenditure an extra R1,5-billion (R500-million).
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State-business accord sets buy-local target of 75%
Business, government and labour pledged on Monday to increase their expenditure on goods and services from South African producers to 75%. The move is a bid to boost industrialisation and create employment in the country.
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Using the new PPPFA Regulations for successful supplier adoption
The new Preferential Procurement Policy Framework Act (PPPFA) regulations are set to go into effect on 7 December 2011. This is great news that will positively impact the lives of many in South Africa as well as the country’s overall economic outlook, Catherine Hills, Partner: Global Accounts at Ariba, tells SmartProcurement.
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Tighter tender rules issued in bid to combat fraud, boost transparency
The National Treasury has taken new steps to improve the transparency of government procurement and tender processes through the issuance of an ‘instruction note’ to government accounting officers, which it says is designed to “combat fraud” and “improve accountability”.
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Government Contract Management Framework a definitive step forward
The Contract Management Framework published and distributed by National Treasury is a watershed moment for Procurement practice in the public sector, Rivaj Parbhu, Head of Business Development at Realyst Contract Management, tells SmartProcurement.
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Fighting corruption - secure an investigative unit's freedom
Out of 3134 public service irregularities reported to investigative units before April 2011, only 13% were investigated.
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Interim Chief Procurement Officer appointed at troubled State Owned Enterprise
State-owned Broadband Infraco has appointed an interim Chief Procurement Officer (CPO) while the network infrastructure organisation realigns itself after an internal audit revealed serious flaws in its business practices, CEO Dr. Andrew Shaw told SmartProcurement.Ashney Chetty has been acting as CPO since April 18 and will overhaul the SOE's procurement practices, among which is ensuring Infraco complies with the regulations of the PFMA.
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Public Service Commission plots history of procurement irregularities
Some 720 cases of irregular procurement practices in the public sector have been identified by the Public Service Commission (PSC).The irregular practices involved officials awarding government tenders without following policies and procedures and buyers awarding contracts to friends and family or rigging tenders in exchange for kickbacks.
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Cabinet to align treasury procurement regulations with BEE Act.
Cabinet announced in March that it will approve the alignment of the Preferential Procurement Policy Framework Act (PPPFA) and the Broad-Based Black Economic empowerment Act (BEE Act).Public entities follow the regulations of PPPFA to procure goods and services.
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SA public procurement - poor value for money
Taxpayers are simply not getting value for money from South Africa’s public procurement services - that’s in over 250 municipalities, 9 provincial governments and over 40 central government departments, Finance Minister Pravin Gordhan said in his budget speech last week.
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Government's SCM capacity building drive
In a bid to elevate the professionalism of Supply Chain Managers, Cabinet has stipulated that government will only employ qualified SCM practitioners and assist to plot their career paths within a system of excellence.To facilitate this new culture of success, the Department of National Treasury (NT) is on a path of significant capacity building, Kevin Naik, Director for Supply Chain Policy Training at NT, told delegates at the SmartProcurement World Conference.
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The contents of an ethical purchasing policy
Several SmartProcurement World 2010 speakers discussed the high levels of corruption exposed daily throughout the African continent - South Africa itself being the victim of many improper business practises within all sectors of the national economy. It was widely agreed that organisations need to reform their policy and procedure handbooks to ensure that positive steps are taken to reverse this continent-wide trend.
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South Africa not 'angry' enough about corruption
South Africa is not doing enough to combat fraud and corruption in its business sectors, said Vusi Pikoli, Gobodo Incorporated Forensic Investigations Head, at SmartProcurement World 2010.
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What Pravin's budget speech means for Procurement
Minister of Finance Pravin Gordhan outlined in his October budget speech some of government’s plans to amended poor procurement practices and combat fraud and corruption.Here follow the extracts from his speech as it relates to Public Sector procurement:
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State Owned Enterprises - there's hope on the horizon
More than 300 parastatal organisations, or state-owned enterprises (SOEs), will be put under the microscope in the next year. Many of them are really struggling, like the SABC, but there are some that are regarded as leading lights, like the Development Bank of South Africa, Elaine Porteous tells this month's SmartProcurement.
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Verifying suppliers' capabilities: Managing expenditure and service delivery within local government
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Corruption: 7 government departments under the microscope
The president’s office has heeded the call from South Africa’s business sectors to put the brakes on corruption and has ordered a probe into allegations of corruption in no less than seven government departments.The departments’ procurement practices have come under the scrutiny of the Special Investigating Unit (SIU).
Posted by Editor at 6:10 AM | Comments (0)
Raising procurement's profile - two sides of the coin
Negotiate a lower price on a contract. Add $10 000 to the bottom-line.Get Procurement represented on the board. Add $-millions to the bottom-line.
Raise the profile of your profession, so that everyone can now see your lack of ethics. Priceless.
Posted by Editor at 5:00 AM | Comments (0)
20% of public procurement budget lost to corruption
Some R30-billion of South Africa’s R150-billion public procurement budget is lost to corruption, estimates TFAC and its alliance partner Sentigol, supplier of the Tendersure system.
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Strategic sourcing - stretching a limited financial kitty - Part 1
Urgent collective action is required to remedy how public sector and corporate organisations in emerging economies strategically acquire products and services and deal with selected suppliers, says Dr Douglas Boateng, SmartProcurement Editorial Board member and President of both the Institute of Operations management Africa and West African Institute for Supply chain Leadership.
Posted by Editor at 6:55 AM | Comments (0)
World Cup purchasing irregularities exposed - Download Report
The transparency of purchasing procedures for the FIFA World Cup has once again come under scrutiny. South Africa’s Institute for Sec urity Studies has published its concerns over stadia building and bidding practices in 'Pla yer and Referee: Conflicting Interests and the 2010 FIFA World Cup'.
Posted by Editor at 12:10 AM | Comments (0)
Corruption in government procurement, how are they doing it?
It has been estimated unofficially that R30-billion per year, 20% of the overall government procurement budget of R150-billion, is being lost or is disappearing into a black hole of corruption. Much of the loss is through rip-offs, overpricing and the failure of contractors to deliver on their promises, says Carol Paton, of the Financial Mail, who wonders if the government has the political will to stop it.SmartProcurement would like to know which fundamental Procurement disciplines have been ignored and which would counter this national dilemma?
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Professionalising SCM in Government
Government is ushering in a new benchmark for recognising the qualifications of Procurement and Supply Chain practitioners in the public sector in South Africa.
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Removing complexity from government Tenders
Print media are awash with articles about the many factors that can and do go wrong with the tenders process, or the pending changes to the process itself.
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Volume leveraging benefits - Where's the evidence?
Public sector Procurement organisations of many of today’s recession-hit territories are responding to demands for savings in various ways, including increasingly desperate attempts (in many cases) to deliver Procurement savings by pressurising suppliers to deliver lower prices, on the largest possible scale. Over the last few years public and pri vate sector volume leveraging strategies have been evolving worldwide, very quickly indeed. However, it is generally unknown if the greater the volume to which a buyer is able to commit lowers the unit price the buying organisation will be quoted. Is volume leverage ad infinitum a valid proposition when designing public and pri vate sector purchasing structures and strategies? Wally Johnson of Purchasing Index (PI) speaks to SmartProcurement.
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IPAP 2: Departmental dispute jeopardises plans to overhaul public procurement
Government’s plans to bolster the domestic economy through procurement reform as set out in the Industrial Policy Action Plan (IPAP2) are in danger because the Department of Trade and Industry (DTI) and National Treasury reportedly disagree on the scope the proposals should have.
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Strategic leveraging of public procurement critical to success of industrial policy
The latest Industrial Policy Action Plan (IPAP) has slated current public procurement for “not delivering adequately on either value-for-money or key industrial objectives.”
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Comment: Draft preferential procurement regulations' effect on currently exempt SOEs
Ashney Chetty, Manager of Policy and Governance at Transnet, and her group offer the following commentary on the draft Preferential Procurement Regulations (“the Regulations”) to SmartProcurement readers. It will focus on the impact and effects of the Regulations upon SOEs that are currently exempted from the PPPFA.
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"Box ticking" affirmative procurement does more harm than good
Over the last 15 years or so, the Government has tried various means to spread South Africa’s wealth more equitably among its people. Good progress appears to have been made, however, there is a growing move towards a complex political box-ticking ‘compliance’ approach to affirmative procurement and associated policies which may, in the long run, do more harm than good, says Dr. Douglas Boateng, SmartProcurement editorial board member and CEO of niche business advisory organisation PanAvest International.
Posted by Editor at 9:45 AM | Comments (0)
Historic culture can lead to Public Sector Procurement fraud - 5 tips for reducing fraud
The allegiances formed during South Africa’s troubled political history are still influencing the country’s supply chain processes. This was one of the issues highlighted during a panel discussion on SCM fraud prevention at SmartProcurement’s 2009 Public Sector Supply Chain Management Summit.
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Public Sector SCM Summit played host to 10 HDI students
In a bid to promote experiential learning, and open up our conferences to interns / learners and trainees SmartProcurement’s Public Sector Supply Chain Management Summit and Workshop played host to members of the Logistics Graduates of South Africa, based at the Vaal Technikon (LGSA).
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Possible Government tenders workshops in the rest of SA
The SmartProcurement ‘Tenders in Government’ Technical Workshop met with such a positive response that this niche P & SM online media organisation is planning to take the one-day programme country-wide, for the benefit of SCM practitioners on the procure and supply side.
Posted by Editor at 9:10 AM
Larger fiscal deficits call for stricter compliance to government tender guidelines
There is a greater need for public sector tenders to be more strictly awarded according to government’s guidelines. The outcome of tender awards influenced by government officials with stakes in corporate companies, bribery and financial mismanagement is not just that incompetent people receive a contract, but also the waste of government’s steadily shrinking pockets.Professor Justin YIfu Lin with Minister in The Presidency: National Planning Commission, Trevor Manuel.
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Procurement Competency Development initiative acknowledged by IPSA
eThekwini Municipality’s initiative to uplift procurement competency has been recognized at the Institute of Purchasing and Supply South Africa’s (IPSA’s) 2009 awards, Sandile Ngcobo, Deputy Head: Supply Chain Operations at eThekwini Municipality, told SmartProcurement.
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Strategic sourcing offers the public sector a guiding hand
Strategic sourcing has become best practice in procurement management and makes good business sense for meeting the State’s ongoing commitment to taxpayers, Estelle van Rooyen, Director of Compliance, Contract Management in Specialist Functions for National Treasury, told SmartProcurement.
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Stopping the stealing in the Public Sector
Last week the media ran scathing reports confirming what many government procurement professionals have been telling, SmartProcurement in private:
" That so called public servants abuse public funds to enrich themselves, bypassing or undermining procurement processes to fund their pursuits. That, senior individuals, use their political connections or seniority to pose veiled threats to SCM individuals who are intimidated into retreat..."
Posted by bernievn at 10:13 AM | Comments (0)
Peer Reviewed: The law of Government Procurement in South Africa
In SmartProcurement’s May Newsletter, we discussed the Public Procurement Law Review’s opinions on Phoebe Bolton’s new legal work ‘The Law of Government Procurement in South Africa’. This month, SmartProcurement publishes a review of the book by Mr Isac Smith, director Supply Chain Management at the Western Cape Department of Health.
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Public Sector Supply Chains helping to keeping economy afloat
The IPSA/ CIPS Pan African Conference, held at Emperors Palace on 26th and 27th May, attests to the significant role that public sector supply chains are playing in ensuring the resilience of the South African economy against the worst effects of the present global downturn. In particular, the State supply chain management machine is managing many massive contracts that are keeping several sectors of the economy afloat and their balance sheets in the black.
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New work provides easy access to government's procurement policies
“A must-read for anyone who is pursuing a professional career in Procurement & Supply Management!"Owing to the fragmented regime governing public procurement in South Africa, it is exceedingly difficult to form a coherent view of the legal regime of government contracting. Professor Phoebe Bolton's book, The Law of Government Procurement in South Africa, provides for the first time relatively easy access to this regime, which will undoubtedly be of significant assistance to anyone approaching this field of law, says Geo Quinot in the 'Public Procurement Law Review'.
Posted by StaffWriter at 2:58 PM | Comments (0)
Procurement visibility needed at compulsive buyer: UK National Health Service (NHS)
In the United Kingdom (UK) Government’s search for budget balancing savings of tens of £ billions annually, as led by Prime Minister Gordon Brown, attention is increasingly directed to the more than £160 billion that the public sector reportedly spent on the procurement of goods and services from third party suppliers (half of which is spent on common consumables).
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Zuma tender solution will hamper service delivery. Accountability the answer
In response to ANC President Jacob Zuma’s statement that the government tendering process should return to the old tender board system, SmartProcurement and independent experts are clear that this move will hamper service delivery, negate progress made in public sector procurement and still not be a foolproof mechanism to prevent fraud. Individual accountability within the current context offers a better solution.
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Can the public sector ever negotiate successful relationships?
“The public sector has significant influence on private sector contracting. Many innovative terms and contracting methods have seen their beginnings in public procurement - examples range from 'termination for convenience' through to public-private partnerships”, Gregg Barrett, Director of Cylon Technology, recently told SmartProcurement.
Posted by Editor at 11:44 AM | Comments (0)
Call for Papers - Tendering Best Practices and Effective Implementation of the bidding process conference
How to effectively conduct Tendering and Bidding processes in line with World Class Practices in both the Public and Private Sector is the theme of the Tendering Best Practices and Effective Implementation of the Bidding Process - Conference to be held on 29-30 July 2009. SmartProcurement is calling for papers from interested (and even afflicted :)) parties ...
Posted by Editor at 6:42 AM | Comments (0)
Procurement and SCM impact on organisations' bottom-line - A SA government perspective
In today’s environment, where globalisation is a reality, the role of purchasing and supply management has taken on an air of additional importance. “For organisations of all types (private or public sector), the challenge is to improve the quality of products and services whilst driving down costs."
Posted by Editor at 8:30 AM | Comments (0)
The SOE Procurement Forum explained
It is common knowledge that State-Owned Enterprises (SOEs) have tremendous clout in the procurement of goods and services in South Africa. Indeed collectively they represent billions of Rands spend in South Africa as well as in Africa itself. In the international market, SOEs are also big players when it comes to the acquisition of capital goods and direct procurement.
Posted by Editor at 6:15 AM | Comments (0)
Taming Project Procurement: Better the Devil you Know than the One you Don't...
In South Africa large amounts of money are presently being spent through the public sector, especially on commodities such as infrastructure. “Procurement for these projects is a key function, the integrity of which can mean the difference between millions saved or wasted, time commitments met or missed, and social development requirement compliance or non-compliance. Traditionally, these projects are handled inefficiently since procurement usually buys commodities based on price, therefore removing all advantage by buying too much ‘just-in-case’ and ignoring the value of the integration of activities”, Rob Stuart, a Procurement Specialist at Volition Consulting Services, told SmartProcurement.
Posted by Editor at 11:43 AM | Comments (0)
BBBEE Compliance vs Government Procurement Practices - a Contradiction in terms?
"No government department has ever asked for a Broad Based BEE certificate, and it may be some time before they do" Wade van Rooyen of Iquad Verification Services tells SmartProcurement. . The answer to the question of why government has not asked for certificates is based on conflicting legislation which may have a serious impact on your business.
Posted by StaffWriter at 10:25 AM | Comments (0)
Home-grown technology offers fix for government spending woes
Inadequate or ineffective financial controls have been a serious problem in many national and provincial government departments, with the Auditor General repeatedly highlighting problems of overspending, inappropriate or fruitless spending and underspending. The solution, according to Fraxion MD Stanton Jandrell, is to automate the financial management process as far as possible to enforce compliance without adding to red tape and compromising service delivery.
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Finding a cure for "BAD" contracts and outsourcing deals?
"It is a well researched fact that the majority of outsourcing deals become unsatisfactory to one of the partners involved, within the first two years of the agreement, Cecil Harris, MD of ODMS tells SmartProcurement. This dissatisfaction could range from poorly delivered services to unhappiness with the pricing. "Invariably all outsourcing deals require a degree of remediation or renegotiation at some point during their lifetime, he says.
Posted by bernievn at 3:17 PM | Comments (0)
