Public Sector Procurement

Procurement inefficiencies uphold poor intra-Africa trade

 

LindiweZulu.jpgThe impact of ineffective procurement in Africa has been estimated at US$31,5-billion - US$24,9-billion for sub-Saharan Africa alone - in terms of value leakage – by auditor KPMG.

The inefficiencies are caused by procurement organisations struggling with basic issues around delivering value, such as low use of technology, inadequate skills and non-compliance with procurement policies.

“It is difficult to separate this ineffective procurement from Africa’s trade - they are two intricately linked aspects, which link directly to intra-trade on the continent”, said Minister of Small Business Development Lindiwe Zulu, at Smart Procurement World Western Cape. Minister Zulu added that, “intra-trade accounts for only 10 - 12% of the continent’s trade, in comparison with high levels of inter-regional trade recorded in Europe (60%) and in Asia (40%)”.

Buy local or face audit findings!

 

RobDavies_ProudlySA.jpgUnder the World Trade Organisation’s agreement on Trade-Related Investment Measures, The South African government cannot prescribe to the business sector that they must follow localisation (75% local content in purchases) in the same way it prescribes to public entities.

“We don’t have that ability, and are challenged internationally [if the topic of localisation is broached with international organisations],” said Minister of Trade and Industry, Rob Davies.

However, some business organisations have embraced the spirit under which the Economic Development Department (EDD) negotiated the local content designations, to drive economic development in the country.

Minister Davies shared some of these corporate-level local procurement stories at Proudly SA’s Buy Local Summit, in early April.

Short-term SCM investment for long-term savings

IanNeilson.jpgThe City of Cape Town has leveraged its supply chain management policy to grow its economy, procure sustainably and create jobs. And save money, of course.

Opening the Smart Procurement World Western Cape Conference, the city’s Executive Deputy Mayor, Alderman Ian Neilson gave delegates an insight into the City’s supply chain efforts to create employment for Cape Town’s people, promote resource efficiency, reduce negative environmental effects, and promote the competitiveness of local businesses.

Is SA's public procurement mature enough to grow the country's SMMES?

Mmatshepo_Rasebopye.jpgIt is not surprising that today many believe that public sector supply chain management is a new thing and that its advent has brought about challenges. While it is true that the world of supply chain management has evolved a great deal, 1994 was not a quantum leap that brought about the new South African procurement regime; procurement has always been there and we have been either personally or business-wise subconsciously practising it. And it has always experienced challenges.

But has procurement matured? Asks Mmatshepo Rasebopye, lecturer, facilitator and practitioner in public sector supply chain management, in this month’s SmartProcurement.

Buyers must know what is made locally before they can consciously 'buy local'

 

PhillippaRodseth.jpg“Buyers need to understand the importance of ‘buying locally’ and have the ability to identify locally manufactured products. By doing so they actually buy back jobs,” said Philippa Rodseth, Executive Director of the Manufacturing Circle.

Speaking at an Economic Policy Dialogue hosted by the Department of Trade and Industry (dti), Rodseth said that there is a need to educate consumers to know what is locally produced when making a purchase. She said it is a strong move towards full scale industrialisation and inclusive growth.

10 things to consider when selling performance improvements to government

 

StephenBauld.jpgIt is important to understand the process procurement managers go through before they will take the risk to adopt a new product for use in a municipal setting. Not only is it the many rules, regulations, bylaws and municipal documents, it is also how government procurement personnel react to new ideas related to goods and services.

“For government it relates to past performance in other municipalities, or some assurance that the good or service will be measured against some standard that is used to make sure the product is equivalent to what they are using at the present time,” says Stephen Bauld, President & CEO at Purchasing Consultants International in this month’s SmartProcurement.

Overpricing is where government's real leakage sits, says Treasury's Kenneth Brown


Kenneth_Brown.jpgIt is South Africa’s equivalent to the proverbial $640 Pentagon toilet seat — a paper binding machine that the government buys from its suppliers for the rand equivalent of almost $2,000, about 13 times what it should cost.

Chief Procurement Officer Kenneth Brown cited the binding machine as an example of the massive waste that means as much as 40% of the government’s R600-billion budget for goods and services is being consumed by inflated prices from suppliers, and by fraud.

Addressing this would mean that "without adding a cent, the government can increase its output by 30%-40%," he says. "We could be building more roads, more schools without even adding more money to the current budget."

Cost-cutting drive has pitted Treasury against government departments

 

Ralph_Mathekga_.jpgTreasury’s cost-cutting drive has pitted it against other government departments.

Chief Procurement Officer Kenneth Brown has drawn criticism from politicians who are unhappy with his investigations of procurement, said Ralph Mathekga, a political analyst at the Johannesburg-based research group, the Mapungubwe Institute of Strategic Reflection.

In September the Treasury said it rejected a request from Home Affairs Minister Malusi Gigaba for his staff to fly in business-class seats and it turned down appeals from state power utility Eskom for company credit cards.

eProcurement is actually about people

 

Thumbnail image for Pumezo1.jpgThe Council of the European Union (EU) placed a renewed focus on public e-Procurement when it adopted directives for the reform of public procurement in February 2014.

Globally, governments have been pursuing initiatives to affect good governance and the “smart expenditure” of limited funds. They have pursued the implementation of a more effective procurement system and, in many cases, an electronic procurement system.

However, one can become so enamoured of the technology that one forgets what it is all about: it is about people, says Pumezo Gulwa, Director of the eCommerce Centre in the Office of the Chief Procurement Office, sharing one of the lessons National Treasury learned in implementing eProcurement.

Drones delivering blood for transfusions: Supply Chain Innovation

 

drones_.jpgA drone service delivering blood for transfusions has been launched in Rwanda.

The drones are expected to make between 50 and 150 life-saving deliveries each day to far-flung and inaccessible clinics across the western half of the country. Excessive blood loss during childbirth is the leading cause of death in pregnant women in Rwanda.

Zipline, the company behind the technology, said it could complete a delivery in around 30 minutes after receiving an order via a call or text message.

ZUMA - Major BEE procurement shake-up

 

JacobZuma.jpgThe government’s procurement policy will be overhauled in a bid to support black and small businesses, said President Jacob Zuma.

”The buying power of the state is a powerful economic tool. It can and must be used to advance black economic empowerment, ” said Zuma, speaking at a Black Business Council dinner in September.

Public Preferential Procurement regulations being revised

 

schalkhuman.jpgThe Treasury is rethinking the draft preferential procurement regulations it published in June, and there is a possibility the revised version could claw back some of the more generous provisions for enhanced black economic empowerment.

“The latest revision of the regulations is expected to be submitted to Finance Minister Pravin Gordhan in September and could be ready for promulgation in October” said Schalk Human, Acting Chief Procurement Officer, National Treasury.

Failed supply chain policies led to Eskom's Tegeta payments - Corruption Watch

 

BenNgubane.pngEskom failed to follow its own supply chain policies, the PFMA and Section 217 of the Constitution when making pre-payments to the Gupta’s Tegeta exploration and resources to secure coal supply, said Corruption Watch in a statement.

“We are concerned about the nature and scale of procurement irregularities at Eskom,” said Corruption Watch’s executive director, David Lewis.

Gauteng Treasury to assist SMMEs next week to register on government's Central Supplier Database (CSD)

 

CSD_Expo_1.jpgGauteng Provincial Treasury will assist suppliers and small businesses to register on the Central Supplier Database (CSD) next week at SmartProcurementWorld.

On 14 September 2016, Treasury will be available at The Absa Enterprise Supplier Development Expo Open Day, co-hosted at Smart Procurement World.

 A key feature of the CSD is that government procurement officials will be able to identify local suppliers throughout the country.

Absa partners with Western Cape provincial government to launch support programme for small suppliers

 

DougWalker.jpgAbsa bank, in partnership with the Department of Economic Development and Tourism, launched a business skills programme in June 2016 to equip small suppliers with the necessary skills and knowledge to grow and sustain their businesses.

The two-day programme aims to reach at least 1 000 small suppliers and, will run across the province until December 2016, says Doug Walker, Managing Executive for Absa Western Cape.

eThekwini municipality linking procurement and SMMEs

 

Fawzia.jpgHosting Smart Procurement World KwaZulu-Natal gave the city of eThekwini’s SMMEs the chance to network with big business procurement from the corporate and public sectors.

“Involving Procurement in assisting SMMEs to grow and creating new businesses generates jobs for citizens,” eThekwini Municipality Cllr Fawzia Peer, Chair: Finance & Procurement, told SmartProcurement.

“[Linking Procurement with small businesses] helps the municipality, in terms of poverty alleviation, and the State, in terms of less welfare support. Ultimately, it improves the quality of life of our people,” said Cllr Peer.


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