How the 2015 budget will address the constraints of efficient government procurement

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Parliament.jpgAs much as 45% of the proposed R1.2-trillion budget could be procured from third parties, said Dr Dinesh Kumar, Head of Supply Chain and Procurement consulting at KPMG.


Considering the level of expenditure in question, it was necessary that government improved the efficiency of its purchasing, said Dr Kumar, who was speaking at an industry round table on the procurement elements contained within the budget speech.


He outlined some initiatives that Government has put into action.


Cabinet has approved that all Accounting Officers be required to include supply chain metrics in their performance scorecards. Furthermore, Accounting Officers must engage with the supply chain function at a strategic level.


The Office of the Chief Procurement Officer (OCPO) has further introduced common standards and new technologies to support work initiatives and to enhance the skills of personnel.


Dr Kumar indicated that the various initiatives appear to be centre-led.


“Government is not aiming to centralise procurement, rather it is trying to make more efficient the repetitive tasks that happen in every department.”


The goal is to collate de-centralised processes into one so that departments can focus on critical procurement tasks rather than administrative tasks. For example, a vendor will register on Government’s supplier database only once.


Similarly Government has proposed the use of an e-Tendering platform through which all tenders are published. “It would align all departments and create efficiencies and visibility in the supply chain system,” said Dr Kumar.


However, aside from issues of technology and compliance, Government also feels the burden of a lack of skills. “The proposed centre-led initiatives will not be effective if the skills are not there. Skills remain the biggest constraint to these initiatives,” noted Kumar.


“In the short term, to stem value leakage and bridge the efficiency gap quickly, I suggest a top-down change brought about through high-level interventions that target senior level personnel who would then lead Government departments,” said Kumar. “In the long term we need to enhance the [skills] base by creating education programmes and training interventions to build the fundamental knowledge of personnel.”


Consultants KPMG and the CIPS hosted the round table.
 

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