TERMS OF REFERENCE (ToR s) REQUEST FOR PROPOSALS TO PROVIDE SIMPLE SMALL BUSINESS FINANCIAL MANAGEMENT SOFTWARE (SSBFMS) October 2010

TERMS OF REFERENCE (ToR s) REQUEST FOR PROPOSALS TO PROVIDE SIMPLE SMALL BUSINESS FINANCIAL MANAGEMENT SOFTWARE (SSBFMS) October 2010

INDEX PAGE 1. INSTRUCTION TO BIDDERS 2 1.1 ALTERATION OR WITHDRAWAL OF BIDS 2 1.2 COSTS FOR PREPERATION OF TENDER/PROPOSAL 2-3 1.3 OWNERSHIP TENDERS AND PRESENTATIONS 3 1.4 CONFIDENTIALITY 3 1.5 ETHICS 3 1.6 CANCELLATION OF BID PRECEDURE 3 1.7 OTHER 4 2. SERVICE PROVIDER TERMS OF REFERENCE 4-9 2.1 PROJECT PURPOSE 4-5 2.2 PROJECT BACKGROUND 5-6 2.3 SPECIFIC DELIVERABLES 6-8 3. REQUIRED EXPERTISE AND COMPETENCIES 8 4. METHODOLOGY 9 5. SUPPORTING DOCUMENTATION 9 6. PREFERENCIAL PROCUREMENT 10 7. SERVICE LEVEL AGREEMENT 10 8. DISCLAIMER 10-11 9. IMPORTANT NOTICE 11 10. DURATION FOR STUDY 11 11. REPORTING 11 12. ADJUDICATION PROCESS. 11 13. FEE STRUCTURE 12 14. EVALUATION CRITERIA 12 15. SUBMISSION OF PROPOSALS 13 16. ENQUIRIES 13 1

1. INSTRUCTION TO BIDDERS a) The services required by the Eastern Cape Development Corporation are described in these Terms of Reference. b) Timetable is envisaged as below: Activity Date Time Terms of Reference to bidders 20 Oct 2010 Closing date for submission of proposals 12 Nov 2010 12h00 Compulsory briefing session 25 Oct 2010 11h00 Appointment and Notification of award to 30 Nov 2010 selected service provider Contract Signing 05 Dec 2010 Commencement date 17 Jan 2011 Duration of contract 3 months Presentation of the 1 st Draft Report/Tool 31 Jan 2010 Presentation of the second draft 28 Feb 2011 report/tool Presentation of the final Report/Tool 31 Mar 2010 1.1 ALTERATIONS OR WITHDRAWAL OF BIDS Bidders may withdraw their Bids by written notification on or before the 12 November 2010. 1.2 COSTS FOR PREPERATION OF TENDER/PROPOSAL The costs incurred by the Bidder in respect of the attendance of any briefing or presentation meetings or costs incurred in preparing any proposal will be borne 2

by the Bidder and the ECDC shall in no way be liable to reimburse the Bidder for such costs incurred. 1.3 OWNERSHIP OF TENDERS AND PRESENTATIONS. The ECDC shall on receipt of any tender or proposal relating to this call, and submitted in accordance with this tender procedure, become the owner thereof and the ECDC shall not be obliged to return any tenders or proposals to Bidders who request such a return. 1.4 CONFIDENTIALITY The entire process of calling for proposals as initiated by the ECDC in terms of its procurement policy is confidential. All deliberations in respect of the acceptability or otherwise of the proposals shall be conducted in closed sessions and members of the Evaluation and Procurement Committee is bound by confidentiality. 1.5 ETHICS Any attempt by a Bidder to obtain confidential information, or enter into unlawful agreements with competitors or influence the Evaluation and /or the Procurement Committee or the ECDC during the process of examining, evaluating and comparing tenders will lead to the rejection of its tender in its entirety. The Bidder must declare any business or other interests it has with the ECDC or any employee of the ECDC, failing which the Bidder shall automatically be disqualified from further participation in the Tender or call for proposals. The Declaration of interest form Annexed hereto marked B must be submitted with the quotation 1.6 CANCELLATION OF BID PROCEDURE The ECDC shall be entitled, within its sole and entire discretion, to cancel this tender at any time and shall notify the Bidders accordingly. 3

1.7 OTHER a) The bidders shall furnish such additional information that the ECDC may reasonably require. b) The ECDC may invite bidders for an oral interview prior to the approval of their appointment. The ECDC will not be liable for the costs incurred by the bidder in connection with such interview. c) The ECDC reserves the right to visit the premises of the bidder if deemed necessary. d) Any false declaration of information will result in the exclusion of the tender from consideration. The ECDC shall in no way be liable for any damages whatsoever, including, without limitation, damages for loss of profit, in any way connected with the cancellation of this Tender procedure. The publication of an Invitation to call for proposals does not commit the ECDC to appoint any of the qualifying Bidders. 2. SERVICE PROVIDER TERMS OF REFERENCE It is the intention of the Eastern Cape Development Corporation to enter into a formal Service Level Agreement with the successful Bidder to provide the services more fully described hereunder. These Terms of Reference and the service provider s proposal will form the basis of the service level agreement to be entered into between the parties. 2.1 PROJECT PURPOSE The purpose of this project is: 1. To secure a multifunctional financial management tool for Small Medium and Micro Enterprises. 4

2. Provide training to 100 SMME s, as identified by the ECDC, on the multifunctional financial management tool. 3. Provide training to ECDC Enterprise Development Support (EDS) Unit staff on how to install, use and provide minor maintenance to the tool. 2.2 PROJECT BACKGROUND The Eastern Cape Development Corporation (ECDC) is an entity set up by Eastern Cape Government to support the promotion of Small Medium and Micro- Enterprises. ECDC therefore has amongst other units the following: Development Investment which is a section that provides development finance to enterprises and the Enterprise Development Service (EDS) which is a unit that provide nonfinancial support to enterprises. EDS therefore provides pre and post support to enterprises that have been financed by ECDC. Furthermore the corporation provide these non-financial support interventions to non financed enterprises as well. There has been a high rate of failure of business which in certain instances has led to high impairment rate of loan finance. One of the reasons identified for high failure rate is financial management skills, tools and system to efficiently and effectively operate the enterprises. It is in this light that ECDC is planning to build financial capacity of enterprises in order to run sustainable enterprises. ECDC s intention is to provide financial management training to enterprises as well as assist enterprises with appropriate financial management software that will help them to manage their financial records and provide relevant reports. This bid is aimed at software component, its installation and training on its use, whilst a separate process is underway for broader financial management training and does not form part of this request for proposal. The project involves the appointment of a service provider to supply the ECDC with a computerised tool that is best suitable to assist small medium and micro enteprises in managing their financial resources (in or out). The system should also be capable of assisting the business in tracking its customers and suppliers (debtors, creditor, stock and material management). 5

The appointed service provider will supply the ECDC with a mutli-user license directly and provide technical support, train the ECDC Enterprise Development Staff and the first 100 SMME s that are selected to be provided with the tool. The service provider will also be expected to develop selection criteria for beneficiaries in conjunction with the ECDC. 2.3 SPECIFIC DELIVERABLE The service provider must take into account the unique situation of the SMMEs in the Eastern Cape Province and the profile of the targeted beneficiaries (SMMEs) by the Eastern Cape Development Corporation such as the Business sophistication level, formal education level, local history, demographic profile. The financial management tool therefore should be able to accommodate all types of businesses or sectors, all kinds and levels of entrepreneurs found in the Eastern Cape Province. The project shall be divided into two phases namely. The Development of the Financial Management Tool Supply- that can be installed to several users computers. The provision of Training on the Tool- train ECDC staff and one representative per SMME. The objective of the second phase is to ensure that ECDC staff members are able to install and use the tool and also provide user support to the SMMEs. The training of the SMME representatives provides base training to enable the enterprises to use the tool correctly. NB: The tool must be compatible to be installed to a basic computer. The main features of the tool must be its ability to produce monthly and quarterly reports including but not limited to cash-flow statements, income statements, creditors, debtors analysis, year-end report, easy creation and activation of clients or supplier accounts, Quick and Easy installation for both start-up and existing businesses. The Financial Management Section 6

Costing Preparation & Analysis Budgeting (ability to compare with actual) Breakeven analysis Report Monthly expense schedule Ledger Accounting Details Transaction Listing Report Complete Trial Balance, Aged Analysis Report, General Ledger. Income Statement, Financial Interpretation Report, Cash Flow Statement, Balance Sheet reports. Ratio analysis report Trade Account, Income with Budget Report The system must able to track Value Added Tax & Non-Vat. Asset Register The Payment Tracking Section Management of Bank account Reconciliation of Bank account- to track cash movement Payment Tracking for the receiving of: Cash Cheque Bank Deposit Electronic transfer Credit Card Payment Tracking for payments by: Cash Cheque Bank Deposit Electronic transfer Credit Card Clearing of entries by password control Loan accounts for shareholders or Members Capital introduced and drawings for Sole Traders and Partnerships The Customers Sales Transactions Customer setup and maintenance Customer Transaction Listing Customer Statements Customer Balances Customer Age Analysis Customer Trial Balance 7

Customer Invoices Customer Journal Entries The Suppliers and Purchases Transactions The system must be able to create, register and maintain supplier transactions and list. Ability track transactions of payments and complete the age analysis. Record & Track Supplier Statements and Invoices from suppliers. Supplier Trial Balance and Supplier Journal Entries. KINDLY TAKE NOTE that it is ECDC s expectation, that all intellectual property rights in and to the Tool being developed will reside with the ECDC and shall not vest in any third party. 3. REQUIRED EXPERTISE AND COMPETENCIES The Bidders proposal must outline the following: The expertise and experience of the Bidder in the field of financial management tool development. The expertise and experience of the Bidder in the development of related information technology systems for such tools extensively. The professional qualifications of the team the bidder will dedicate to this project supported by CV s, knowledge and skills in the Information Technology sector. Demonstrate past experience in provision of a similar financial management Tools and related IT systems. Demonstrate a skill and experience in the training for the utilisation of the financial management tool. Should have an extensive knowledge and experience of the SMME sector. At least three Contactable Trade or Other references. KINDLY NOTE THAT A FAILURE TO EXPRESSLY COVER THIS IN YOUR PROPOSAL WILL RESULT IN YOUR PROPOSAL BEING REJECTED WITHOUT FURTHER CONSIDERATION. 8

4. METHODOLOGY The Bidders proposal must outline the methodology they intend adopting to meet the deliverables specified in 2.3 above. This outline should cover the following questions, How are you planning to carry out the work in a more specific and detailed manner? Indicate what you will do to achieve the desired objective as well as clear budget breakdown. Bidders are expected to put clearly defined broken down targets in line with the scope of work. The budget breakdown would therefore be linked to the target and outputs. KINDLY NOTE THAT A FAILURE TO EXPRESSLY COVER THIS IN YOUR PROPOSAL WILL RESULT IN YOUR PROPOSAL BEING REJECTED WITHOUT FURTHER CONSIDERATION. 5. SUPPORTING DOCUMENTATION 5.1 Bidders are required to submit original valid tax clearance certificate. 5.2 Company profile detailing the companies track record with contactable references. 5.3 Abridged CV s of the Project Team Members 5.4 Bidders shall be required to submit proof of professional indemnity insurance cover if such insurance cover has been taken out and is required by the association to which the Bidder belongs. 5.5 Company registration documentation, e.g. ck-1, ck2 or CM-1. 5.6 Proof of professional or accreditation certificates. KINDLY NOTE THAT A FAILURE TO SUBMIT THESE DOCUMENTS WITH THE PROPOSAL WILL RESULT IN YOUR PROPOSAL BEING REJECTED WITHOUT FURTHER CONSIDERATION. 9

6. PREFERINTIAL PROCUREMENT In compliance with the Preferential Public procurement laws applicable to the ECDC s and in terms of ECDC s procurement policy preferential points will be awarded to Bidders who demonstrate BEE in its management and ownership structures and who claim such points on the Preferential Points claim form attached hereto. Service providers who are regarded as contributors in terms of the B-BBEE Codes of Good Practice and who submit Certification to that effect must still submit the required claim form. KINDLY NOTE THAT A FAILURE TO EXPRESSLY DEAL WITH YOUR BEE STATUS IN YOUR PROPOSAL AND TO SUBMIT THE REQUISITE CLAIM FORM, WILL RESULT IN NO PREFERENTIAL POINTS BEING AWARDED FOR YOUR BEE STATUS. 7. SERVICE LEVEL AGREEMENT 7.1 The acceptance of any proposal shall only be confirmed with the conclusion of a written service level agreement between the ECDC and the successful Bidder, in terms of which the rights and duties of the parties are recorded, which agreement shall regulate the relationship between the ECDC and the Successful PROVIDER. 7.2 Until such time that an appropriate service level agreement has been concluded between the ECDC and successful Bidder, no rights shall be conferred nor shall any legitimate expectations be conferred to the successful Bidder to carry out the works or services provided for in this call for proposals. 8. DISCLAIMER The ToR has been prepared for the purpose of providing information to interested parties and allowing them to respond to this ToR. 10

ECDC accepts no liability for any loss incurred by any person(s) due to events or actions taken as a consequence of the preparation and dissemination of the ToR document. ECDC accepts no responsibility for the fairness, accuracy or completeness of any information or opinion, for any errors, omissions or mis-statements, misrepresentation, negligent or otherwise, made by any person in this ToR document or any written or oral communication transmitted or made available at any time to an interested party or its advisers. 9. IMPORTANT NOTICE Submission does not commit the recipient to enter any negotiation or any other agreement in relation to the development of the said project. The only or lowest tender will not necessarily be accepted and the ECDC reserves the right to accept the whole or any portion of the tender, or make an appointment. Neither should the issue of this ToR, nor any information in it be regarded as commitment on the part of ECDC. Receipt of this document does not confer any right on any party or create any expectation in respect of the envisaged tender process in respect of the SIMPLE SMALL BUSINESS FINANCIAL MANAGEMENT TOOL (SSBFMT). 10. DURATION FOR PROJECT It is anticipated that the duration of the project shall not be more than three (3) months. Any extension of time must be fully motivated. 11. REPORTING Written monthly progress reports in Microsoft Word will be required to be presented in person to the ECDC-EDS & DIU in East London. 12. ADJUDICATION PROCESS Final adjudication will be done by ECDC procurement committee on the recommendations of the preferred service if no letter of acceptance is received within three (3) months of closing date please consider your bid to have been unsuccessful. 11

13. FEE STRUCTURE 13.1 Tenders are required to expressly cover their proposed fee and disbursement structure based on the activities they propose undertaking to provide the service requested in this call for proposals. 13.2. The ECDC reserves the right to negotiate any aspect of the proposed fees and disbursements with the preferred Bidder and shall not be bound to the fees and disbursements submitted by any Bidder. KINDLY NOTE THAT A FAILURE TO EXPRESSLY COVER THIS IN YOUR PROPOSAL WILL RESULT IN YOUR PROPOSAL BEING REJECTED WITHOUT FURTHER CONSIDERATION. 14. EVALUATION CRITERIA Bids will be assessed according to the following criteria, using an 80/20 preference point system: The skill and experience of the project team in respect of financial management; The skills, experience and general exposure to computerised/electronic financial management tools; General knowledge and experience of the SMME sector in South Africa in general and Eastern Cape in particular. Adherence to the terms and conditions of this call for proposal; A demonstrated understanding of this call for proposal and terms of reference; Approach and Methodology which will be utilized to carry out the work; The black empowerment credentials of the Bidder in the BEE composition of management or project team of the Bidder and in the BEE composition of the ownership or shareholding structure of the company. The costs at which the services would be provided to the ECDC 12

15. SUBMISSION OF PROPOSALS All submissions must be submitted by hand or by Post on or before November 2010 and marked as follows: the 01 st Expression of Interest-Small Business Financial Management Tool Eastern Cape Development Corporation ECDC House Ocean Terrace Park Moore Street Quigney EAST LONDON Tel. No.: +27 43 704 5600 16. ENQUIRIES Enquires should be addressed to: Tando Mbangeni Tel: 041 373 8260 tmbangeni@ecdc.co.za 13