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Following the revelation by National Treasury last month that the South African public sector spent an “enormous” R500-billion on goods and services and construction works in the 2013/14 fiscal period, Finance Minister Nhlanhla Nene told Parliament on Wednesday that several supply-chain management (SCM) reforms were currently being implemented to remedy the “imperfect” public procurement system.
Noting that achieving “better value for money” in public service delivery relied on rigorous financial management, effective systems and an “unrelenting” fight against corruption, he reiterated that a central supplier database for government suppliers would be launched in April.
“This will significantly reduce the administrative burden for business, especially small- and medium-sized enterprises. The database will interface with the South African Revenue Service, the Companies and Intellectual Property Commission and the payroll system.
“It will electronically verify a supplier's tax and black economic-empowerment status and enable public sector officials doing business with the State to be identified. This intervention will also reduce the administrative burden for SCM practitioners and address many of the concerns raised by the Auditor-General every year,” he commented.
In close collaboration with the State Information Technology Agency, Treasury would, in April, also introduce a compulsory central e-tender portal on which all tenders would be advertised and all tender documents made freely available.
“Tender advertisements in newspapers and the government gazette will be phased out,” said Nene.
In consultation with Basic Education Minister Angie Motshekga, additional reforms in the education sector would see the delivery of all books to schools from January 2016 managed through a centrally negotiated contract.
In addition, with effect from May, all school building plans would be standardised and the cost of construction controlled by the Office of the Chief Procurement Officer.
“Too often, and for too long, we have paid too much for school building projects,” he remarked.
The routine maintenance of school buildings and minor construction works would, meanwhile, be decentralised and would be accompanied by measures to combat inefficiency and corruption at district and school level.
Nene further acknowledged the nonpayment of suppliers on time as a perennial problem that required “serious attention”.
“This practice works against government's efforts to grow the economy and develop the small, [medium-sized and microenterprise] sector. Payment of suppliers within 30 days will now be included among other SCM requirements in the performance agreements of accounting officers,” he noted.