Dear Corruption Watch,
I run a small business involved in the construction industry. It’s very difficult to find out about government tenders, but more difficult still to follow the process through to the end. My understanding was the government was meant to review its procurement practices to make it easier for businesses like mine to participate and at the same time less open to corruption. What exactly did government promise and what has it delivered in this regard?
On ‘Tender’ Hooks
You are correct that government has promised “rigorous procurement reforms” to improve infrastructure project management, eliminate waste and root out corruption.
In October 2012, finance minister Pravin Gordhan announced that the National Treasury planned to introduce various reforms in the procurement system to prioritise getting value for money while strengthening the fight against corruption in South Africa. He echoed this intent in his budget speech in Parliament in February 2013, spelling out changes to the public procurement system which had a particular focus on curbing corruption.
In essence, Gordhan revealed that the Treasury would establish the position of a chief procurement officer (the CPO), drawing on international best practice, to oversee the design and implementation of the reforms. The primary aim of the CPO, and the office which he or she would head, was to restructure and simplify government’s procurement processes.
One of the priorities, he announced, was to reduce the number of points where procurement takes place. Every year, government departments and agencies spend more than R450-billion on procuring goods and services, including vehicles, textbooks and medication. There are more than 660 entities engaging in procurement activities, including some 280 municipalities. Gordhan said during his budget speech that one of the core problems of the government’s procurement system is that there is little transparency in procurement transactions.
Among the first initiatives of the CPO, Gordhan also announced, would be the enhancement of the existing system of price referencing. This would set fair value prices for certain goods and services.
So what has become of these laudible statements of intent?
In early 2013, Kenneth Brown, then head of intergovernmental relations within the Treasury, was appointed as the CPO. It seems that his focus for much of the past two years has been on understanding how the system currently functions, by identifying its weaknesses and strengths. For example, on the agenda is a process of legislative reform. For example, a technical committee has been established to assess the Preferential Procurement Policy Framework Act and to decide whether amendments are needed.
As far as construction is concerned, Brown has indicated that the Treasury wants to standardise standards, specifications and contracts. If government enters into a contract for a housing project, for example, the relevant contract should be standard, from specification to the conditions of the contract. There is an opportunity to standardise documentation used in the procurement process so that the contracting authority, and the bidders, can simply download the documents from a central website.
On 4 February 2015, National Treasury published the supply chain management (SCM) review, the first major assessment of the system of buying goods and services by the public sector since 2004. The review is a culmination of the work done by the Office of the CPO since its inception. It outlines a number of reforms, which if implemented properly, will result in a public sector SCM system that is transparent, accountable, provides value for money; and ensures good quality service delivery.
There can be no doubt that these are all steps in the right direction, but there is a long way to go.
• This article was first published in Sunday Times: Business Times