Public Sector Procurement

When does directing a company become Board interference?

SOEs_100.jpgPerformance of SOEs remains a top priority for the president and by extension the minister of public enterprises. The question remains, to what extent will these changes affect procurement and supply chain? What is the proper way of governing SOEs?

At the recent 13th Annual Smart Procurement World Indaba, discussions centred around the restructuring of state-owned enterprises, focusing on methods to increase economic impact and development. Further discussions showed the danger of executive influence on procurement and performance of SOEs.

So, when does directing a company become Board interference?

Oxymoron: Ethical policies and public procurement?

StephenBauld_100.jpgWe would all agree that government procurement should be held to the highest level of ethical standards.

It is very important to the entire system that everyone working with or for a municipality be of the same mind set. The whole idea of the importance of adherence to an appropriate standard of ethics in the conduct of the procurement function is self-evident.

Yet in historic terms, concern with respect to ethics is a fairly recent phenomenon, particularly at the local government level, says Stephen Bauld, a government procurement expert.

State capture: a supply chain created problem?

Mediacy_.jpgBy Mediacy Mudekwa

The cost of state capture is estimated to be around R1.5-trillion over the last approximate four years. To put this into perspective, R1.8-trillion is the national budget for 2019. According to the Daily Maverick, state capture has wiped out "a third of South Africa's R4.9-trillion gross domestic product, or effectively annihilated four months of all labour and productivity of all South Africans, from hawkers selling sweets outside schools to boardroom jockeys".

Of course, there is no way we can quantify the true cost and real extent of state capture. One can only guess what this has done to state-owned enterprises (SOEs) and the influence that it has had on their balance sheets and service delivery. The question is: what role has procurement and the supply chain played in this? And what procurement/supply chain management (SCM) lessons can we learn from state capture?

The unenviable task of the Chief Restructuring Officer (CRO)

CRO_125.jpgBy Matodzi Ratshimbilani

President Cyril Ramaphosa and the Minister of Finance have, on several occasions in the recent past, informed South Africa that mega state-owned enterprises (SOEs) will soon be under the helm of chief restructuring officers (CROs), of whom a lot is expected to turn around the fortunes of beleaguered SOEs.

On 30 July 2019, the appointment of Freeman Nomvalo as CRO of Eskom was announced. However, previous announcements were scant on the details around the role of CROs at SOEs. The nomenclature of CROs seem to be borrowed from the United States where the practice was abound after the 2008 financial crisis.

Join us at Smart Procurement World in September, where we will look at what procurement functions can do to build more confidence in SOEs and how procurement should be positioned to protect and strengthen SA's core institutions.

Brexit can right the wrongs of public procurement

brexit_100.jpgBrexit has delivered some issues, no doubt about that. It has also presented a massive opportunity to put right a lot of what is wrong with public procurement.

"This is, indeed, a chance to establish the foundations of public procurement policy and to enable contracting authorities to drive real value for money, cost effectiveness, continuous development and innovation into the public services for the communities they serve", writes David Salters, Director of Procurement, Greenview Group.

Policy changes pin hopes of economic transformation on government procurement

AndrewMolver_100.jpgChanges made to South Africa's government procurement policy are aimed at relying more heavily on public procurement as a tool for increasing the pace of economic transformation and urgently addressing socio-economic imbalances owing to South Africa's pre-democratic past.

This was largely performed through the implementation of the Preferential Procurement Regulations of 2017, which introduced a number of significant changes.

Join us at Smart Procurement World for insight into supply chain management (SCM) in a municipal environment. Andrew Molver, Partner at Adams & Adams, will be looking at the Promotion of Administrative Justice Act (PAJA) and whistle blowers as well as discuss the joint and several liability protections that exist for SCM role players.

Procurement perspectives: corruption thrives on secrecy in government procurement

StephenBauld_100.jpgInconsistency in procurement processes is prevalent. In many published articles on a variety of topics, corruption is much like a mushroom, it thrives in the dark.

The benefit of competition is well-recognised by economists but, to a large extent, concern around public procurement processes is based more on the concerns of political science rather than on those of economics.

"The goal is to avoid corrupt practices", says Stephen Bauld, a government procurement expert.

Free State welcomes Smart Procurement World

SPW_FS_100.jpgSmart Procurement World is bringing its regional conference to the Free State.

Partnering with the Free State Department of Economic, Small Business Development, Tourism and Environmental Affairs (DESTEA) has enabled Smart Procurement World to take its procurement and supply chain indaba into its fourth South African province.

Since beginning in Gauteng in 2009, Smart Procurement World has extended into the Western Cape, KwaZulu-Natal and, on 19 March 2019, into the Free State.

Procurement perspectives: exploring a more efficient procurement process

StephenBauld_100.jpgIf a municipality intends to explore the possibilities around effective and efficient procurement by adopting a more strategic approach, then it must place emphasis on taking proactive measures to improve the purchasing function.

"It is not sufficient to rely on only those measures that would prevent things from going wrong; it would be time well spent to concentrate, initially, on conceptualising an overall proactive approach to the procurement function", says Stephen Bauld, a government procurement expert.

Stopping the public procurement rot: don't blame the mouse, blame the hole in the wall!

Parliament-100.jpgThe chickens have come home to roost for public procurement in South Africa − and what a lot of chickens there are! All indications are that public procurement has been beset by peddlers of influence, venal vendors, rogue executives and delinquent boards. Without a doubt, those responsible must be held accountable for their ruinous conduct. But, more importantly, state-owned companies (SOCs) must extract every bit of learning that they can from this calamitous experience. There is a Talmudic saying: "don't blame the mouse, blame the hole in the wall". This aphorism teaches us to not only focus on the transgressors, but to identify systemic weaknesses that have allowed transgressions to occur.

Peter Volmink, a procurement lawyer employed by a major public entity and chair of a special interest group on procurement law, highlights six areas that require focused attention.

Join us at Smart Procurement World Western Cape, where will unpack the lessons procurement has learnt so far form the State Capture Enquiry. What should procurement do NOW to get its constitutional mandate and operate free from external influences? How can procurement be positioned to protect and strengthen core institutions from in South Africa? Join us for this keynote address on 9 April 2019.

Inconsistent laws a public-sector headache when recovering irregular expenditure

HelenVenter_100.jpgThe public sector's struggle to recover irregular expenditure is hamstrung by inconsistent laws. Public-sector specialist Helen Venter unpacks the problem in this month's SmartProcurement.

Municipal materials management may require a counter-intuitive purchasing approach

StephenBauld_100.jpgEnsuring that the right quality of an item is ordered and delivered may seem like a fairly obvious responsibility. However, doing so in practice requires a fairly sophisticated understanding of market conditions and user requirements, which, like many organisations, municipal departments do not possess.

"There is a higher probability of generating measurable savings if municipal purchasing departments play a pro-active role to assist client departments to identify needs before they arise", says government procurement expert Stephen Bauld, in this month's SmartProcurement. Bauld argues that successful municipal materials management may require a counter-intuitive approach towards purchasing.

Good governance + accountability = long-term socio-economic development

DouglasBoateng.jpgLocal government procurement practitioners need to recognise the inextricable link between good governance, accountability and long-term socio-economic development, says Prof. Douglas Boateng.

Factoring political dimensions into municipal procurement

StephenBauld_100.jpgWhen talking about procurement projects for a municipality it is safe to say you must factor in the political dimension.

Although the importance of council supervision in the municipal procurement process is clear, difficulties arise when the political side of council thinking begins to cloud the discharge of its fiduciary responsibility. Stephen Bauld explores the political dimension that procurement must appreciate, in this month's SmartProcurement.

5 pillars - a procurement blueprint for accelerating inclusive growth

Prof_MarcusAmbe.jpgSibongile_Shongwe.jpgThe ambition of creating a developmental state to transform the Apartheid economy has been hamstrung by an inability to implement transformation policies; it is a situation exacerbated by a lack of skills, competencies and capacity; and the patronage of corrupt procurement practices.

Prof. Marcus Ambe, from the University of South Africa's School of Public and Operations Management, in collaboration with Sibongile Shongwe, Director of MtileniMazi Enterprises, unpacks a procurement blueprint to accelerate inclusive growth and socio-economic development, in this month's SmartProcurement.

Simplifying the process of doing business with government

RakgadiMotseto.jpgThe challenge for emerging businesses to access government opportunities continues

Most suppliers believe that doing business with government is easy: it amounts to applying for a job that has no specified minimum requirements, where your business is merely distinguished from the rest.

In this month's SmartProcurement, Rakgadi Motseto, Chief Director: Stakeholders and Client Management Office of the Chief Procurement Officer, responds to questions practitioners commonly ask about suppliers.

Contracts: Paying for what works

SusanDeWitt.jpgAre performance clauses and outcomes-based contracts the answer?

Dr Susan de Witt from the Graduate School of Business at the University of Cape Town unpacks contract performance measurement in this month's SmartProcurement.

The need for compliance and transparency in public procurement

BenardOdote.jpgBenard Odote, Group Managing Director, House of Procurement, looks at the need for governance in public-sector procurement.



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