State procurement ‘far from perfect’ – Nene

Central supplier database, e-tender portal in April.

Finance minister Nhlanhla Nene admitted in his budget speech on Wednesday that public sector procurement has been “far from perfect” with “frequent allegations of corruption and inefficiency”

He announced interventions and reforms in an effort to ensure better value for tax payers’ money.

Nene said from the beginning of next year all books delivered to schools will be managed through a centrally negotiated contract.

In an effort to reduce the cost of construction of new schools, all school building plans will be standardised and the cost of construction will be controlled by the Chief Procurement Officer, who is located within national treasury. “For too long, we have paid too much for school buidling projects”, Nene said.

He said routine maintenance and minor construction will be decentralised, but this step will be accompanied by measures to combat inefficiency and corruption and district and school level, Nene said.

Supplying goods and services to government is set to be simplified from April 2015 when one central supplier database will be introduced. This means that suppliers will be relieved of the burden to register on a different database when soliciting business from more than one state entity.

Nene said the database will interface with the South African Revenue Service (Sars) and the Companies and Intellectual Property Commission (CIPC) as well as the payroll system.

This will enable the electronic verification of suppliers’ tax and BEE status as well as the identification of public servants doing business with the state.

The Auditor-General has in the past repeatedly criticised the failure of officials to declare their interests in this regard, but state entities had difficulty in identifying directors of supplier companies as being employed by the state due to fragmented systems within government.

Nene said this intervention will reduce the administrative burden for supply chain management practitioners and address many of the Auditor-General’s concerns.

Government tenders will from April no longer be advertised in newspapers and the Government Gazette, but on a central e-tender portal. Publication of state tenders on the portal will be compulsory.

While that will cost the embattled print industry precious revenue, it will mean that all tender documents will be freely available.

A price referencing system will provide state entities with a benchmark for costing commonly procured goods.

Nene further said the payment of suppliers within 30 days will be included in the performance agreements of accounting officers in an effort to curb payment delays that he said “works against government’s efforts to grow the economy and develop the SMME sector”.

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