How will the National e-Procurement portal affect set-asides for small business?

| 0 Comments
Proc.jpg
While national treasury is pushing ahead with an e-procurement portal, questions are being raised about what has become of the 30% of procurement budgets set aside for small, medium and micro enterprises (SMMEs) that President Jacob Zuma announced in the 2015 state of the nation address.


Last month, finance minister Pravin Gordhan said in his budget speech that from April 1 all companies wishing to do business with national and provincial government their entities must be registered on national treasury’s central supplier database. Municipalities will join on July 1.


Suppliers and government departments will then have to use government’s eTenders online portal.


Small business development minister Lindiwe Zulu said in her budget vote speech in May last year that she expected a practice note on the idea of “set-asides” to be drafted and released by national treasury by September that year. However, nothing has been released yet.


The department of small business development’s spokesman, Cornelius Monama, this week referred all queries to national treasury. But treasury did not want to tell the Financial Mail when or even whether the practice note would be released.


The e-Tenders portal will allow anyone with Internet access to view tender documents free of charge, which should improve smaller firms’ access to tenders. This could drive up the participation of small businesses in state procurement — as it did in South Korea and Chile, after similar portals were launched there in recent years.


National treasury media liaison Xolisa Dodo says that with the introduction of treasury’s central supplier database, all supplier information including BEE status and location — down to ward level — will be available to all practitioners and departments. Notification services can then be used to inform targeted small business groups of government opportunities, she says.


So far 107,000 users have been registered and 40,000 compliant suppliers are available on database.


While Dodo concedes that adoption by small businesses of the e-portal is dependent on the speed with which broadband is rolled out, she adds that walk-in centres are an interim alternative solution.


But the department of small business development’s special adviser, Thami Mazwai, is not convinced the e-portal will boost SME participation in state tenders. In a recent newspaper opinion piece he said small businesses must compete with “heavily resourced” competitors on the e-portal.


“The set-asides would give these small or black-owned entities a fighting chance. Instead, we are told set-asides are unconstitutional,” he wrote, alluding to a 2006 practice note in which treasury outlawed the practice.


Another concern of national treasury’s is that set-asides could push up procurement costs, partly because bigger companies (given their economies of scale) are able to offer lower prices. In a procurement review released in February last year, treasury said it was willing to consider set-asides if cost premiums were minimised and the measure was constitutional.


But Black Business Council (BBC) secretary-general Xolani Qubeka believes a “developmental cost” of expanding the economic and consumer base must be factored in.


He does, however, admit that the BBC, which initially lobbied for set-asides, has not conducted any research on how many small businesses could benefit or how many jobs could be created if a set-aside were to be approved.


Treasury, however, would probably have to overhaul the Preferential Procurement Policy Framework Act to allow for set-asides to go ahead, Qubeka says.


He points out that treasury tried last year to resolve this issue by suggesting that tenders of R10m or below would only have to be subjected to 50% preferential points.


He says the BBC did not support this, as it would limit it to smaller contracts for black firms.

This article first appeared on
financialmail.co.za 

Leave a comment


SmartProcurement Newsletter
X

Please enter your details below to receive the SmartProcurement Newsletter for FREE on a regular basis.

As part of the SmartProcurement Newsletter you will be receiving World Class Procurement News, Tools, Tips, Tactics, Procurement Training updates, Upcoming Events, and the latest Procurement Career Openings.

* Email Address:
* Title:
* First Name:
* Surname:
* Company:
  Position:
* Country:
* Public / Private:

 

Career opportunites

Demand Planning Manager

  • <500 000 Gauteng Operations, Planning & Inventory Projects / Category Management
(Total Cost to Company R750k - R900K) excluding ...More

Global Category Manager: CONTRACTS

  • <500 000 Buyer Commodities Contract Gauteng
Total Cost to Company R1mil - R1.2mil excluding

Project Manager :12-18 MONTH CONTRACT

  • <500 000 Contract Procurement Officer / Specialist Projects / Category Management
Description:A well-known retail organization is looking for an ...More

Procurement Analyst

  • <500 000 Analyst Gauteng Permanent Procurement Management
Description:A leading infrastructure development group with strong presence ...More

Commodity Manager: Fuels and Lubes

  • <500 000 Commodities Gauteng Permanent Strategic Sourcing
Description:Ensuring continuity of supply in line with business ...More

Senior Facilities Manager

  • <500 000 Gauteng Operations, Planning & Inventory Permanent Projects / Category Management
(Total Cost to Company R800K - R900K) Description: ...More

Supply Chain Analyst

  • <500 000 Analyst Permanent Supply Chain Western Cape
(Total Cost to Company R350K - R550K) SOUTHERN ...More

Demand Planner

  • <500 000 Gauteng Operations, Planning & Inventory Permanent Supply Chain
(Total Cost to Company R450k - R550k, dependent ...More

Procurement Specialis

  • <500 000 Gauteng Permanent Procurement Management Procurement Officer / Specialist
(Total Cost to Company R700k - R800k including ...More

Solutions Architect

  • <500 000 Analyst Gauteng Operations, Planning & Inventory Permanent
(Total Cost to Company R1.3Mil - R1.1Mil including ...More

Engineering Manager

  • Gauteng Industrial Engineer Permanent Procurement Management
Total Cost to Company R850k - R950K including ...More

Country Head of Procurement

  • Permanent Procurement Management Procurement Officer / Specialist
https://careers.peopleclick.com/careerscp/client_gsk/external1931/gateway.dofunctionName=viewFromLink&jobPostId=359235&localeCode=en-us CBS Procurement,Hub Head of Procurement To lead, ...More

Demand Planner

  • <500 000 Gauteng Operations, Planning & Inventory Permanent Projects / Category Management
https://www.tech-pro.co.za/pages/jobdetail.aspx#!Gauteng/Planning/Demand%20Planner/TP2005490/MSe Category: PlanningPosition Title: Demand PlannerSalary: R600 000 ...More

Head of Procurement

  • <500 000 Gauteng Permanent Procurement Management Procurement Officer / Specialist
https://www.tech-pro.co.za/pages/jobdetail.aspx#!Gauteng/Procurement/Head%20of%20Procurement/TP2005488/ZBuCategory: ProcurementPosition Title: Head of ProcurementSalary: R1.3 million ...More

Warehouse and Distribution Manager

  • <500 000 Gauteng Logistics & Warehousing Permanent Supply Chain
https://www.tech-pro.co.za/pages/jobdetail.aspx#!Gauteng/Logistics/Warehouse%20Distribution%20Manager/TP2005455/TMa Category: Supply ChainPosition Title: Warehouse and Distribution ...More

Supply Chain Manager

  • <500 000 Mpumalanga Permanent Procurement Officer / Specialist Supply Chain
https://www.tech-pro.co.za/pages/jobdetail.aspx#!Mpumalanga/Supply%20Chain/Supply%20Chain%20Manager/TP2005448/LMa Category: Supply ChainPosition Title: Supply Chain Manager ...More

Industrial Engineer

  • <500 000 Gauteng Industrial Engineer Operations, Planning & Inventory Permanent
https://www.tech-pro.co.za/pages/jobdetail.aspx#!Gauteng/Consulting/Continuous%20Improvement%20Manager/TP2005489/SNh Category: ConsultingPosition Title: Industrial EngineerSalary: R900 000 ...More

Operations Manager

  • >500 000 Gauteng Operations, Planning & Inventory Permanent Supply Chain
Our client within the FMCG industry with a ...More

Warehouse and Distribution Manager

  • >500 000 Gauteng Logistics & Warehousing Operations, Planning & Inventory Permanent
An exciting opportunity awaits for a Warehouse and ...More

Demand Planner

  • <500 000 Permanent
Get an opportunity to be part of one ...More