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  • Supply Chain Management:
    E-Procurement - Do or Die?

Supply Chain Management:
E-Procurement - Do or Die?

18 November 2020

This article will focus on the public sector, mainly due to the seemingly archaic manner, in which National Treasury, through the Office of the Chief Procurement Officer, want to continue with demand and acquisition management within Supply Chain Management.

Currently, we have a draft set of regulations that the National Treasury wants to promulgate into law which has not taken e-procurement into consideration at all.  It is 2020 and we cannot continue what was deemed adequate 15 - 25 years ago.  Times have changed – Requirements have changed, and our government needs to react in the same vain.  Our National Treasury needs to empower the Chief Financial Officers and their teams to procure with efficiency and effectiveness.

If Covid-19 has thought us anything with regards to Supply Chain Management – it is that supply chain management processes cannot continue to operate as it is currently operating within the public sector.

Radical DIGITAL Transformation is required in the Demand, Acquisition, Contract and Performance Management throughout the sector.


Based on the most recent outcomes of the AGSA’s audit of the Municipalities during 2018/19 and the audit outcomes of 2018/19 for the Public Sector issued late 2019; Irregular Expenditure is on the rise – alarmingly so.  In 2018/19 the AGSA has reported on that irregular expenditure has increased to R62,60 billion from the R51 billion reported on in the previous year. A rise of 11bn in one year – where SCM processes have not been followed.

The AGSA’s report further states that “Auditees have a poor track record in dealing with irregular expenditure and ensuring accountability. The year-end balance of irregular expenditure that had accumulated over many years and had not been dealt with (through recovery, condonement or write-off) was R174,88 billion.

As a knowledgeable citizen, we know that this does not always culminate into fraud and corruption, but it is an alarming state we are in.  – Simply put, the Offices of Chief Financial Officers are not capacitated in many instances with the right skilled SCM officials – to ensure 100% compliance to the regulatory frameworks.

There are no formal SCM Oversight body for public and municipal sector officials to subscribe to.  SAPICS, SAPICS, which is the professional body for SCM practitioners and is an exclusive Premier Channel Partner of APICS in Sub-Saharan Africa and is an independent Professional Body for Supply Chain Management on the continent.  SAPICS is committed to developing a vibrant community of educated supply chain professionals in Africa. The body does not provide oversight and insights into the procurement of services and not necessarily goods.

The importance of Supply Chain Management is the begin and end all, of all transactions that empowers government to deliver on its 12 outcomes it committed to.

With speed our government departments and entities, including municipalities could procure PPE’s and the notion already, as per the many reports we encounter daily in print media – are that, many of the procurement regulations were flouted and not complied with.  Millions of Rands have been spent on PPE’s which were not certified / accredited by relevant medical bodies. Companies who were never in the business of selling PPE, suddenly also sold PPE and were bought from – all in the spirit of our safety.  This does not only relate to the various departments of Health in our country.

Treasury tried to regulate which entities PPE’s could be procured from – however, those entities could not keep up with the demand.  Costs as stipulated by the National Treasury were not adhered to in many instances and neither where the Instruction Notes issued.  What will the consequence management of this be?  


We need draw the line in the sand as the public who government must serve.  During the lockdown, various tenders (normal goods and services as well as construction tenders) were cancelled to be re-advertised, mainly after lockdown level 3 and 4 were achieved.  The costs incurred by the public bidders to submit tenders (which at time require as many as 5 printed copies) are enormous and not taken into consideration by the powers that be.  Tenders where re-advertised, and new versions of tenders had to be submitted – also in sets of 3 – 5 copies.

The cost of submitting tenders have become unbearable – especially to up and coming entities – which are the very entities the Government wants to support and nurture.  Many QSE’s and EME’s have also suffered most during lockdown and can simply not afford to submit tenders at this point in time as they would have also experienced delays in payments by government – whether it was due to officials not being at the office, or simply because of poor cash flow management.

National Treasury has the responsibility – now more than ever, to create an e-procurement system and to digitalise all processes related to Supply Chain Management.


Tender adverts are already loaded on the e-Tender Portal and many times the Specifications / Terms of Reference are already linked to the advertisement.

All Standard Bid Documents (SBD’s) and Municipal Bid Documents (MBD’s) CAN and MUST be digitalized and driven on single platform – available to each citizen in this country.  This will immediately be able to link with key SBD documentation already taken into consideration on the Central Supplier Database (CSD), i.e. Tax Status, BBBEE-level.

What would be added would the Costing SBD’s and MBD’s (whether professional services, goods and whether prices are fixed or not).  Declarations of interests will be able to link to CIPC information related to directorships.  Further to the above, this platform must then also be linked to Identification numbers and Persal numbers of State Officials which will immediately trigger when an Organ of State wants to procure goods and services of state officials – which are clearly disallowed by the Public Service Regulations.  The data though, should be safeguarded in lieu of POPIA.

The link must be made to the procurement portal already established and should simply allow for all procurement documentation – including actual proposals to be submitted.

Evaluation of submissions will then further be simplified where mandatory requirements such as BBBEE status, Tax Status, COIDA Status can all be verified by interlinking these platforms also.

Simply put – by integrating the abovementioned status within an e-procurement system, the Bid Evaluation Committees and SCM of each entity, will receive a compliance status report – from National Treasury itself.

The system should then also prompt any non-compliance to the above through an email to the prospective bidder which would allow it 7 days to submit/update their status as allowed by the PPPFR and other instruction notes.

With regards to construction contracts – and specifications / Bills of Quantities – pricing could be integrated with fixed fees per commodity – however, we are very aware of the capabilities and lack thereof to draft appropriate specifications in many regards related to construction, refurbishments and maintenance.

The role of the CIDB will be enhanced and could be pivotal related to construction contracts.  The various departments responsible for capital expenditure and infrastructure struggle to deliver these projects, on time, within planned costs – mainly due to specifications not being adequately designed and also the aged infrastructure we have – where the unforeseen works and related expenditure could result in various variation orders.

BEC meetings are then empowered by reviewing technical submissions through an online meeting process / physical meeting – however, minutes of the meetings and the bidding results, must still be uploaded on the e-procurement system to ensure compliance with Section 217 of the Constitution.

Adjudication can occur through open platforms, as already implemented with huge success in certain departments which makes it possible to stimulate open and transparent procurement processes.


We are not underestimating the work and funds that are required by National and Provincial Treasuries to implement e-procurement – but it is fundamental to the success of government’s plans to spend on infrastructure, goods and services.

The change is needed now – not in 18 months, not in 5 years but NOW.

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