Preferential Procurement Presentation

Report
PREFERENTIAL
PROCUREMENT
WORKSTREAM
ALIGNMENT OF SCM AND B-BBEE LEGISLATIONS
TASK TEAM CONSISTS OF DEDT - BEE UNIT AND PROVINCIAL TREASURY - SCM
OFFICIALS.
• INVESTIGATE CLASHES BETWEEN SCM AND B-BBEE LEGISLATIONS.
• HARMONISE THESE LEGISLATIONS
• ANALYSE PROCUREMENT SPEND OF THE PREVIOUS YEARS.
• CONSULTATION WITH OTHER DEPARTMENTS WHICH HAVE B-BBEE PROGRAMS IN
PLACE.
• DEVISE STRATEGY FOR THE IMPLEMENTATION OF TARGETS OF THE CODES OF
GOOD PRACTICE
• PROPOSE RECOMMENDATIONS AND POSSIBLE SOLUTIONS TO B-BBEE
IMPLEMENTATION CHALLENGES AND SUBMIT MEMO TO CABINET.
•
Legislative Framework Investigated
• Section 217 (2 and 3) of the Constitution of RSA
•Preferential Procurement Policy Framework Act 5 of 2000 and its
regulations
• Promotion of Administrative Justice Act of 2000
• Public Finance Management Act
• Broad Based Black Economic Empowerment Act 5 of 2003
• Codes of Good Practice
Principles of the Constitution
The constitution stipulates that procurement of goods and
services should be in accordance with a system that is:
•Fair
• Equitable
•Transparent
•Competitive
•Cost - effective
Objectives of SCM and B-BBEE
• To
give effect to the provisions of the Constitution, 1996;
• To give effect to the provisions of the PFMA and the MFMA;
• To transform the procurement and provisioning functions in
government into an integrated supply chain management function;
•To create a common understanding and interpretation of
government’s preferential procurement policy objectives; and
• To promote consistency in respect of supply chain policy and other
related policy initiatives in government.
SCM & BEE Objectives
Continued
•Promote economic transformation.
• Achieve substantial change in the racial composition of ownership and
management structures.
• Increase the extent to which communities, workers, cooperatives and other
collective
enterprises own and manage existing and new enterprises.
• Increase the extent to which black women own and manage existing
enterprises and increase their access to economic activities.
• Promote investment programmes that lead to broad-based and meaningful
participation in the economy by black people.
• Empower rural and local communities by enabling access to economic
activities, land, infrastructure, ownership and skills.
Procurement Spend analysis
• Spend Analysis revealed that R3.6 billion was paid to top 50
companies.
• Only R740 million, 23% of the R3.6 billion was found to have
been spent on BEE compliant companies.
•
The R740 million constitute only 4,8 percent of the total
procurement budget.( BEE compliant benefit only 4.8%)
• While departmental procurement spend may vary however
this reflect the Provincial Government procurement spend.
Objectives of the
Codes of Good
Practice
• To address the challenge of incoherent implementation
of BEE.
•To provide a standard implementation process of BEE
in an integrated and coherent manner to bring about
economic transformation of South Africa
• To provide consistency, and clear direction to BroadBased Black Economic Empowerment.
Public Sector Scorecard
Preferential Procurement
BEE Procurement Spend from all Suppliers based on the BEE
Procurement Recognition Levels as a percentage of Total Measured
Procurement Spend
Weighting
points
20
12
Compliance targets
Years
0-5
Years
6 - 10
50%
70%
BEE Procurement Spend from Qualifying Small Enterprises or
Exempted Micro-Enterprises based on the applicable BEE Procurement
Recognition Levels as a percentage of Total Measured Procurement
Spend
3
10%
15%
BEE Procurement Spend from any of the following Suppliers (regardless
of their BEE Procurement Recognition Level) as a percentage of Total
Measured Procurement Spend:
1. Suppliers that are more than 50% black owned (3
out of 5 Points) or
2. Suppliers that are more than 30% black women
owned (2 out of 5 points)
5
15%
20%
Public Sector Scorecard
Enterprise Development
Average annual value of all Qualifying Contributions
made by the Measured Entity measured from the
commencement of this statement or the Inception Date
to the date of measurement as a percentage of the
target
Weighting
Points
15
15
Compliance Target
3% of NPAT
Codes of Good Practice
• The 0 -5 years is 2007 – 2012 period while 6 -10 year period
is 2013 – 0nwards
• 50% compliance is for 2007 – 2012 period while 70% is 2013
onwards compliance target for Preferential Procurement
scorecard
• Departments need to budget for Enterprise Development
initiatives that will ensure that selected companies are
supported with relevant assistance consistent with Enterprise
Development Scorecard.
Recommendations
The task team recommended that:
• Provincial Government approves the implementation of
Codes of Good Practice target of 50% - 70% as a policy.
• The provincial departments / entities should appoint officials
who would responsible for the implementation of B-BBEE in
their respective organizations.
• To ensure sustainability of projects by introducing contract
management programme for medium to long term contracts.
• Introduce submission of BEE certificates to Provincial
Treasury as a requirement to ensure compliance by all
companies doing business with Provincial Government with
effect from 1 April 2010.
Recommendations
•
Implementation of the DTI 10 products / service by all departments.
 Cabinet decision on 7 November 2007 that 85% of expenditure on the following
10 listed products and services be secured from SMMEs including co-operatives
:
– Advertising, media and communication;
– Interior and exterior cleaning services and cleaning product supplies;
– Clothing and textiles;
– Computer equipment and consumable supplies;
– Interior and exterior furniture and décor;
– Events co-ordination and management;
– Maintenance, repair, construction and office space;
– Travel co-ordination and shuttle services;
– Food perishable and supplies; and
– Stationery supplies and printing.
Recommendations
Targets are primarily aimed at:
• Procurement Opportunities For Co-operatives and SMMEs
Departments and Public utilities must ensure that procurement
fairly discriminate in favour of enterprises owned by women,
youth and the people with disability.

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