Gauteng aims for 60% of tenders to be awarded using public system by end-2016

3rd July 2015 By: Natalie Greve - Creamer Media Contributing Editor Online

Gauteng aims for 60% of tenders to be awarded using public system by end-2016

Photo by: Duane Daws

After becoming the first provincial government to adjudicate its central banking services tender selection process in public on Friday, the Gauteng provincial government (GPG) now plans to roll out the “transparent” tender award process across the province to ensure that by the end of next year, 60% of all tenders awarded by the GPG will be done using the open, public-appraisal model.

Throwing open a process often criticised for its lack of transparency and frequent irregularities, the GPG first opened the adjudication of a tender in April when it held a public adjudication and selection process for a tender for the upgrade of a portion of Cedar road, in northern Johannesburg.

This week's public adjudication of Gauteng’s R90-billion central banking services tender, which would see the bank recommended by the bid evaluation committee (BEC), endorsed by the bid evaluation committee (BAC) and approved by the province’s accounting officer, managing all GPG’s banking transactions, including the payment of salaries to its 200 000 officials and supplier payments of some R3-billion a month.

Gauteng Finance MEC Barbara Creecy – who launched the Open Tender Pilot project in November – told journalists at Friday’s public tender adjudication, held at the provincial legislature, that the province would, based on lessons learnt during the pilot phase, develop a plan to roll out the public tendering process, initially targeting tenders valued at over R50-million.

Provincial Treasury would also, in the coming months, launch an online “e-tender” system that aimed to tackle issues of probity in procurement and would see the entire tender application processed online.

“In welcoming the successful conclusion of this pilot phase, we are now in line to implement the system across the province over the next four years. Today, [Treasury] will prepare a memorandum for the provincial executive committee to suggest what the process should be to take this important experiment forward.

“In it, [we] will recommend that, over the course of this year and 2016, we adjudicate all tenders worth over R50-million in public and, by the end of 2016, this will take us to a position in which 60% of provincial expenditure on goods and services will be adjudicated in public,” she commented.

Further recommendations would be made to shore up public-sector skills and provide technical and advisory support for supply-chain teams in the various provincial departments.

Creecy added that these efforts were aimed at restoring public confidence in government’s procurement system by improving transparency in the award of contracts, in line with the supply-chain-management provisions of the Public Finance Management Act (PFMA).

While asserting that the “vast majority” of public procurement was exercised in accordance with the PFMA, the MEC acknowledged the need to restore public confidence in a procurement process that had historically seen scope and budget creep.

“[This system] will also allow those that have bid for public tenders to watch the process and be satisfied that those entrusted with public procurement are carrying out their duties and are doing appropriate due diligence. Public taxes must [support] the service delivery [objective] they were intended for,” Creecy said.

Friday’s open adjudication of Gauteng’s banking tender saw the BEC present a report and recommendation of the most appropriate bid to the BAC.

After discussions, the BAC voted to endorse First National Bank (FNB) as the preferred service provider to manage the provincial government’s account.

This recommendation, together with the report of an independent probity team, would now be forwarded to the Gauteng Provincial Treasury head of department Nomfundo Tshabalala for final approval.

According to the provisions made by National Treasury, only four major banks – FNB, Absa, Nedbank and Standard Bank – were approved as clearing banks for the purposes of opening bank accounts with provincial governments and were, thus, the only banks eligible to submit their bids for the tender.