THE SOUTH AFRICAN TENDER PROCESS: 20 YEARS LATER
By: Khumbuzile Mbuqe
A tender is best described as an offer to carry out work and or supply materials or another defined asset at a stated fixed price.
Prior to 1994 the tendering process did exist, although it benefitted established businesses, thus making it difficult for the new and smaller upcoming companies to enter the market. In 1995, government established a forum on standard procurement processes, with the sole aim to improve and investigate the existing process and possibly establish necessary procurement reform measures and processes. It was also to make the tendering system easily accessible.
The amount of public resources that national government uses in the tendering process is huge. It is estimated at being well over 20% of the GDP which has direct implications on service delivery, job creation as well as the issue of readdressing past discrimination by empowering designated groups of peoples to receive preference in tendering.
Establishing a transparent tendering process, by maintaining integrity also ensures that government officials operate fairly and in good faith and do not play one supplier against another, thus avoiding any conflict of interest.
Although government has tried to minimise corruption in the public sector with a host of new laws and regulations introduced over the past 12 years, such as the Public Finance Management Act (PFMA) and its Supply Chain
Management Framework, these seem to have had the unintended effect of prolonging tender processes without necessarily decreasing corruption.
Senior Administration Officer for eThekwini Municipality, Sipho Sibisi says the government procurement processes are complicated with multiple committees being involved in every tender.
“Once tenders have been awarded, it often takes months before the terms of reference, payment milestones and legal contracts are concluded because they span across different departments. The process often drags on into a new financial year and the money [for the project] is no longer available,” said Sibisi.
Young entrepreneurs, who requested not to be named fearing for their safety, said that it is extremely difficult to get awarded a tender and stay afloat. To increase the chances of being awarded a tender, a bribe is often solicited from them by officials chairing the bid committee either directly or indirectly in a discreet manner. Not paying the requested amount limits the chances of being awarded that tender.
They added that “government departments then take it a step further with delayed payments. Payment for services rendered can be delayed to periods of up to 12 months”.
It seems that public sector organisations often fall short of these goals because of weak implementation of existing regulations and processes, rather than a lack of good policies and laws, while corruption will always be a problem.
A crippling lack of procurement skills in the public sector seems to account for most of the problems that government departments and agencies experience during their tender processes.