Cape Town – Finance Minister Pravin Gordhan says the Office of the Chief Procurement Officer is implementing procurement reforms with the aim of saving R25 billion over the next three years.
The Minister said this when he delivered the 2016 Budget, in the National Assembly, on Wednesday.
“Our reform proposals draw on a consultation programme last year that reached over 7 000 suppliers and 2 500 supply chain practitioners, and attracted over 27 000 responses to a national survey.
“It is clear that we can achieve considerable savings to government, while also ensuring that procurement processes are streamlined and service providers are paid on time,” the Minister said.
Minister Gordhan said government procurement reforms also relied on collaboration with ministers from other departments, including Public Works Minister Thulas Nxesi, Trade and Industry Minister Rob Davies and Small Business Development Minister Lindiwe Zulu in the areas of industrial participation, supplier development and black economic empowerment.
He said well-managed public administration reforms offer broader opportunities.
“Investments by telecommunication partners in fast internet connectivity for schools, clinics and government buildings brings down the costs, over time, for internet connectivity for neighbouring homes and businesses.
“When government office accommodation projects are well planned, they create opportunities for commercial and residential development in the surrounding precinct.
“And government as an employer contributes to training and organisational development across the wider economy,” said the Minister.
National Treasury said the Office of the Chief Procurement Officer was hard at work to reduce the cost of doing business with the state, as well as eliminating wastage and duplication.
“Since the inception of the eTenders portal in 2015, for example, the site has published 2 500 tenders worth about R35 billion. Transparency has improved, and advertising and administrative costs have come down significantly,” the National Treasury said.
It said a national standard for infrastructure procurement and delivery has been distributed throughout government.
Procurement reforms that are set to be implemented in 2016 include:
- All companies that wish to do business with government must be registered on the central supplier database from 1 April 2016 for transactions with national and provincial government and their entities, and from 1 July 2016 for municipalities;
- From 1 April 2016, it will be compulsory to procure routine goods and services through the centrally negotiated contracts in place. The process will be managed through the gCommerce portal, which automates ordering and allows for bulk discounts. The automation process is expected to reduce corruption by reducing the risk of human intervention to override established protocols;
- A national travel and accommodation policy has been developed for public servants who travel for work. The policy is expected to reduce spending in this category by R1.6 billion over the medium term.
National Treasury said government is presently holding talks with its top 100 suppliers to reduce prices. These discussions could yield significant savings over the medium term.
A Public Procurement Bill is also being finalised and will be released for comment in the first half of 2016.
It will consolidate the fragmented legal and regulatory landscape, align referential procurement with section 217 of the Constitution, and modernise procurement rules, according to National Treasury. – SAnews.gov.za
