City of Cape Town. Supply Chain Management

Transcription

1 City of Cape Town Supply Chain Management Processes Presented by: Leonard Shnaps

2 A Walk Through Legal Framework SCM Conceptualised Demand Planning Supplier Management Tenders Procurement Website Unsolicited Bids Ethics

3 LEGAL FRAMEWORK

4 LEGAL FRAMEWORK Constitution Preferential Procurement Policy Framework Act (PPPFA) Municipal Finance Management Act (MFMA) Municipal Supply Chain Management Regulations Broad Based Black Economic Empowerment Act (BBBEE)

5 LEGAL FRAMEWORK - Municipal Finance Management Act MFMA Chapter 11 - Applies to the procurement of goods and services; City must have and implement a Supply Chain Management Policy (SCMP); The SCMP must be fair, equitable, transparent, competitive and cost-effective and comply with a prescribed regulatory framework; Prescribed Regulatory Framework contained in Supply Chain Management Regulations published in May 2005.

6 LEGAL FRAMEWORK - Supply Chain Management Regulations Published i.t.o MFMA Regulations deal with Establishment and Implementation of Supply Chain Management Policies Framework for Supply Chain Management Policies i. Demand management; ii. Acquisition management; iii. Logistics, Disposal, Risk and Performance Management iv. Other : Ethical Standards Objections and Disputes Rewards and Gifts

7 LEGAL FRAMEWORK - SCM Policy, Processes & Procedures SCM Policy underpins the processes and procedures for the City s procurement environment The policy is reviewed on a regular basis and is vetted by Provincial counterparts Processes and procedures are reviewed as and when required and published on the web Where a need requires innovative thinking, the process and procedure is adapted in line with policy.

8 SCM CONCEPTUALISED Supply Chain Management Consists of: Planning Vendor Management Tenders & Contract Admin Order / Acquisition Inventory & Stores Management

9 SCM CONCEPTUALISED Supply Chain Management Is not: Project management Specification Definition Quantity Assessors Quality Control Payment Control

10 DEMAND PLANNING

11 PLANNING SCM Overview Value for money Good governance Cost efficiency Competitive Equitable Transparent Fair access to procurement opportunities

12 PLANNING SCM Overview Identify the need to procure Assemble specifications Advertise in media and web Evaluate and recommend Adjudication and award Notify bidders of the and the project commences Line departments manage the project and supply to conclusion Emphasis on term contracts

13 Spending Enabler R14.5bn Tenders / Contracts Demand Support SCM & Line Inventory Supplier

14 DEMAND PLANNING - The 80/20 Principle 80% of our direct procurement spend through properly secured contracts 20% is indirect through approved procedures 15% is via ISM (secured contracts) 5% via exceptions requiring individual reports Single source Emergencies Condonations Strip & Quote

15 DEMAND PLANNING Current plan overview

16 SUPPLIER MANAGEMENT

17 SUPPLIER MANAGEMENT CoCT standardised and streamlined an in-house SAP Vendor Master data system. All potential vendors must be registered on the City of Cape Town SAP Vendor database. All registered vendors must be tax compliant and registered with relevant statutory bodies (CIDB, BIBC, COIDA, etc) Vendors are blocked if they are non compliant Ability to communicate with vendors via Fax, or SMS Onus is on Vendors to keep their information housed in the vendor database up to date

18 SUPPLIER MANAGEMENT - Vendor registration Information to Vendors regarding Vendor registration Registration form, related documentation and information can be: Downloaded from the City Web /SupplierRegistration.aspx Collected from the Supplier Management office on the 2 nd Floor, Civic Centre, City of Cape Town. Registration form, once completed, accompanied by all relevant documentation must be handed in at the Supplier Management office for processing. Goods and services may only be provided after an official order has been issued, followed by the GRN and payment process after successful completion.

19 TENDERS

20 TENDERS - Advertising and opening of Bids Tender advertisements are published in the Municipal Notices Section of the Cape Times and Die Burger and on the City of Cape Town s website Bid number and description Where to obtain documents Briefing and/or Site visit if applicable Closing date and time Contact person s details Goods and Services 21 days after publication Construction Works 21 days after publication Contract > R10m or > 1 year 30 days after publication Banking Services 60 days after publication Register of documents drawn

21 TENDERS - Advertising and opening of Bids Must submit before closing time indicated in advert Late bids will not be accepted Bids opened in public Bidder details and more read out to public at opening Bid documents stamped, signed and secured at the opening Register of bids received (published)

22 Information on Tenders TENDERS The list of tenders awarded is available on the City s website Information on why bidders were unsuccessful is available on request, but personal information cannot be disclosed. Such information can only be disclosed subject to the guidelines set out in the Promotion of Administrative Justice Act (Act 3 of 2000) Tender fee A minimal non-refundable tender fee is payable which only covers the cost of printing the relevant documents Always consider 21 Day appeal period and appeal legal process Abuse policy for non-performance, fraud, fronting, etc

23 TENDERS - Supply Chain Management Committees Bid committees established: Bid Specification Committee Bid Evaluation Committee Bid Adjudication Committee SCM Representative at all meetings Regular committee meetings Tender process needs to be well-documented ie specifications, criteria and functionality using the standardised set of documentation. Legally sound process with emphasis on compliance and good governance

24 TENDERS - Supply Chain Management Committees Bid Specification Committees Compile specification for inclusion in tender documentation Line Director to authorise No brand names use of equal to and or equivalent May not be written for any specific service provider Compile evaluation criteria functionality and criteria Consists of minimum of 3 members (Chair, Line rep, SCM Rep) Chairpersons appointed by Director SCM Chairperson drives tempo and proceedings SCM Representative at all meetings Declarations of interest

25 TENDERS - Supply Chain Management Committees Bid Evaluation Committees Consists of minimum of 3 members (Chair, Line rep, SCM Rep) Evaluate submissions for functionality and or price Compile report to BAC Chairpersons appointed by Director SCM Chairperson drives tempo and proceedings SCM Representative at all meetings Declarations of interest

26 TENDERS - Supply Chain Management Committees Bid Adjudication Committee Appointed by City Manager Regular committee meetings Bound by delegations High level of integrity and due diligence required

27 PROCUREMENT

28 PROCUREMENT - Threshold Values Petty cash purchases up to the value of R250 (VAT incl) A transaction value less than R2 000 (VAT incl) At least one written price quotation From R2 000 to R (VAT incl) At least three written price quotations (Advertised RFQ process) Above R (VAT incl) or contract longer than 12 months Competitive Bid Process (Tender)

29 PROCUREMENT Process Line department to identify the need to procure Draw up specifications Project Manager Estimate the value of service to be provided, ie. Under or Over R < R advertised for 2 days on the City s website > R advertised for a minimum of 7days on the City s website and official notice board Evaluate and recommend Project Manager Adjudication and award Supply Chain Management Generate Purchase order and commence with project

30 WEBSITE

31 SCM WEBSITE One-stop information hub Planning Vendor Registration Request for Quotations - Bid Initiations Tenders & Procurement Inventory & Disposals Contact Us and Useful Links

32 SCM WEBSITE New Tenders

33 SCM WEBSITE Awarded Tenders

34 UNSOLICITED BIDS

35 UNSOLICITED BIDS City is not obliged to consider an unsolicited bid If the City is to consider an unsolicited bid the product or service is a demonstrably or proven unique innovative concept; the product or service will be exceptionally beneficial to, or have exceptional cost advantages the person who made the bid is the sole provider of the product or service; and the reasons for not going through the normal bidding processes are found to be sound by the accounting officer.

36 ETHICS

37 PROCUREMENT Typical Corruption Price Fixing Companies agree to keep a price at a specific level Dividing Markets Company A agrees that it will not approach Company B s clients or territory Collusive Tendering Company A, B and C are the only players in a specific industry and they share information before government tenders to ensure that the prices remain high and they each get some tenders

38 Ethics - Prohibitions No award may be made to: A person in service of the State A company with a director / principal shareholder who is in service of the Sate An advisor / consultant contracted to the Municipality Awards to family members of people in service of the State Awards above R2000 to Spouse, Child or Parent of a person in service of the State must be disclosed in financial statements: Name, position, amount

39 Declarations of interest Ethics - Disclosures Employees must disclose any private or business interests that they or close family have Committee meetings Withdrawal from involvement in such processes Gifts No gift in excess of R350 may be accepted All gifts must be declared and recorded in gift register DO NOT OFFER GIFTS

40 Ethics Abuse of the process Trying to influence the process unduly Fraud National Treasury register for defaulters which means that no government entity will be allowed to deal with you Contracts cancelled Criminal prosecution, fines and imprisonment Same applies to Municipal officials who do not adhere Disciplinary action Criminal prosecution

41 Purpose Ethics - Summary To achieve fair procurement process To deliver services to the community To develop businesses It requires us all to know our rights and take up our responsibilities Duty to report abuse Your knowledge and active participation will help build an ethical Municipality

42 Thank you.