Presented by:

Dr. DEEN LETCHMIAH

QUESTIONS

CHALLENGES AND CONSTRAINTS

IMPLEMENTATION METHODOLOGY

SOCIO-ECONOMIC OBJECTIVES

PUBLIC PROCUREMENT REGIME

INFRASTRUCTURE DELIVERY CHALLENGES & OPPORTUNITIES

INTRODUCTION

PRESENTATION FORMAT

INTRODUCTION

Integrating Infrastructure Delivery and Socio-economic goals

Major Challenges of Poverty, Unemployment and Inequality

Construction Industry recognised as one of the more efficient sectors to generate employment and create business opportunities

Appropriate procurement methodology is key to successful socio-economic outcomes

Compliance with existing constitutional and legislated procurement framework

The Gini coefficient is an indexindexindexindex that measures the

degree of inequality in the distribution of family

income in a country

The Gini coefficient is a number between 0 and 1,

where 0 corresponds with perfect equality (where

everyone has the same income) and 1 corresponds

with perfect inequality (where one person has all

the income—and everyone else has zero income).

GINI COEFFICIENT

HIGHEST TEN LOWEST TEN

1 Seychelles 0.658

2 Comores 0.643

3 Namibia 0.639

4 South Africa 0.631

5 Micronesia 0.611

6 Botswana 0.61

7 Haiti 0.592

8 Zambia 0.575

9 Honduras 0.57

10 Central African

Republic

0.563

1 Denmark 0.247

2 Japan 0.249

3 Sweden 0.25

4 Ukraine 0.256

5 Norway 0.258

6 Czech

Republic

0.258

7 Slovakia 0.26

8 Belarus 0.265

9 Finland 0.269

10 Romania 0.274World

Bank

2012

INFRASTRUCTURE INFRASTRUCTURE INFRASTRUCTURE INFRASTRUCTURE

DELIVERY CHALLENGES DELIVERY CHALLENGES DELIVERY CHALLENGES DELIVERY CHALLENGES

AND OPPORTUNITIESAND OPPORTUNITIESAND OPPORTUNITIESAND OPPORTUNITIES

CHALLENGES

• High unemployment levels

• Poverty alleviation

• Rate of Service delivery

• Availability of Skills and competencies

• Barriers to entry

• Capacity limitations

• Collusion

• Slow pace of economic transformation

PUBLIC SECTOR PROCUREMENT IN

SOUTH AFRICA EXPRESSED AS A

PERCENTAGE (24%) OF GDP

National

Provincial

Local authorities

State owned enterprises

11%

2%

6%

5%

National Infrastructure Plan (2012)National Infrastructure Plan (2012)National Infrastructure Plan (2012)National Infrastructure Plan (2012)

Established the Presidential Infrastructure Co-ordinating Commission (PICC) to co-ordinate, integrate and accelerate implementation

Primary objectives:

• Transform the economic landscape

• Create new jobs

• Strengthen the delivery of basic services

• Implement a program of capacity building and skills transfer

Construction Sector through infrastructure delivery identified as a key “Jobs Driver”

National Infrastructure Plan (2012)

• INFRASTRUCTURE DELIVERY IS CRITICAL TO :INFRASTRUCTURE DELIVERY IS CRITICAL TO :INFRASTRUCTURE DELIVERY IS CRITICAL TO :INFRASTRUCTURE DELIVERY IS CRITICAL TO :

• Promote Promote Promote Promote balanced economic developmentbalanced economic developmentbalanced economic developmentbalanced economic development

• Unlock economic opportunitiesUnlock economic opportunitiesUnlock economic opportunitiesUnlock economic opportunities

• Address socioAddress socioAddress socioAddress socio----economic needseconomic needseconomic needseconomic needs

• Promote job creationPromote job creationPromote job creationPromote job creation

• Help integrate human settlements and economic Help integrate human settlements and economic Help integrate human settlements and economic Help integrate human settlements and economic

developmentdevelopmentdevelopmentdevelopment

National Infrastructure Plan (2012)National Infrastructure Plan (2012)National Infrastructure Plan (2012)National Infrastructure Plan (2012)

IMPROVING PERFORMANCE ON INFRASTRUCTURE PROJECTS IMPROVING PERFORMANCE ON INFRASTRUCTURE PROJECTS IMPROVING PERFORMANCE ON INFRASTRUCTURE PROJECTS IMPROVING PERFORMANCE ON INFRASTRUCTURE PROJECTS

ChallengesChallengesChallengesChallenges::::• Poor planning at institutional level

• Slow approval of projects

• Late start to projects

• Poor quality of execution

• High costs and monopoly pricing

• Poor industry reaction time

• Poor project controls (schedule, cost, quality,safety, health and environment)

• Tender abuses and corruption

• Unrealistic acceleration

• Unplanned and costly rework of designs or construction

• No political alignment with no champion

• Lead time delays

• Slow or non-payment of contractors.

National Infrastructure Plan (2012)National Infrastructure Plan (2012)National Infrastructure Plan (2012)National Infrastructure Plan (2012)

IMPROVING PERFORMANCE ON INFRASTRUCTURE PROJECTS IMPROVING PERFORMANCE ON INFRASTRUCTURE PROJECTS IMPROVING PERFORMANCE ON INFRASTRUCTURE PROJECTS IMPROVING PERFORMANCE ON INFRASTRUCTURE PROJECTS

ActionsActionsActionsActions::::

• Programme to coordinate improvement in project-related skills with emphasis on project management

• Align the national, provincial and local structures

• Align the investment plan with funding allocation

• Predictable process for triggering of national projects, including regulatory approvals

• Strong policy direction for incentivisation of supplier development, localisation and private sector participation

• Plan and build projects that promote low life-cycle costs

• Standardised designs and delivery

• Strengthening project controls and monitoring

• Standardised and simple automated reporting to track project progress and performance

• Early warning to address bottlenecks

• New compact with private sector.

PUBLIC PROCUREMENT PUBLIC PROCUREMENT PUBLIC PROCUREMENT PUBLIC PROCUREMENT

REGIMEREGIMEREGIMEREGIME

THE SOUTH AFRICAN

PROCUREMENT REGIME

SA Constitution

(1996)

Good governance

in procurement

Attaining socio-

economic

objectives through

procurement

Public Finance Management Act (1999)

(for National and Provincial Government)

+ Municipal Finance Management Act (1999)

(for Local Government)

Preferential Procurement Policy Framework

Act (2000)

+ Broad Based Black Economic Empowerment

Act (2003)

CONSTITUTIONAL REQUIREMENTS

Organs of State (national, provincial and local)

or any other institution identified in national

legislation must contract for goods and

services using a system which is :

• fair

• equitable

• transparent

• competitive

• cost effective

CONSTITUTIONAL PROVISIONSCONSTITUTIONAL PROVISIONSCONSTITUTIONAL PROVISIONSCONSTITUTIONAL PROVISIONSFurthermore, organs of state or institutionscan implement a procurement policy whichincorporates :-

(a) categories of preference in the allocationof contracts;

and

(b) the protection or advancement ofpersons, or categories of persons,disadvantaged by unfair discrimination

SA LEGISLATION AND ECONOMIC SA LEGISLATION AND ECONOMIC SA LEGISLATION AND ECONOMIC SA LEGISLATION AND ECONOMIC

TRANSFORMATION OBJECTIVESTRANSFORMATION OBJECTIVESTRANSFORMATION OBJECTIVESTRANSFORMATION OBJECTIVES

Section 217 of Section 217 of Section 217 of Section 217 of the the the the

Constitution Constitution Constitution Constitution (Act 108 of (Act 108 of (Act 108 of (Act 108 of

1996)1996)1996)1996)

Public Public Public Public Finance Finance Finance Finance

Management Management Management Management Act (Act 1 of Act (Act 1 of Act (Act 1 of Act (Act 1 of

1999)1999)1999)1999)

Preferential Preferential Preferential Preferential Procurement Procurement Procurement Procurement

Policy Policy Policy Policy Framework Framework Framework Framework Act (Act 5 of Act (Act 5 of Act (Act 5 of Act (Act 5 of

2000)2000)2000)2000)

BroadBroadBroadBroad----Based Based Based Based Black Black Black Black

Economic Economic Economic Economic EmpowermenEmpowermenEmpowermenEmpowerment Act (Act 53 t Act (Act 53 t Act (Act 53 t Act (Act 53

of 2003)of 2003)of 2003)of 2003)

BEE Codes of BEE Codes of BEE Codes of BEE Codes of Good Good Good Good

Practice Practice Practice Practice

BBBEE BBBEE BBBEE BBBEE Transformation Transformation Transformation Transformation

ChartersChartersChartersCharters

&&&&

BBBEE BBBEE BBBEE BBBEE ScorecardsScorecardsScorecardsScorecards

The framework states that specific goals may

include:

i) contracting with persons, or categories ofpersons, historically disadvantaged by unfairdiscrimination on the basis of race, gender ordisability.

ii) implementing the programme of theReconstruction and Development Programme aspublished in Government Gazette no. 16085dated 23 November 1994.

GOALS PROVIDED FOR IN THE PPPFAGOALS PROVIDED FOR IN THE PPPFAGOALS PROVIDED FOR IN THE PPPFAGOALS PROVIDED FOR IN THE PPPFA

PREFERENTIAL PROCUREMENT POLICY PREFERENTIAL PROCUREMENT POLICY PREFERENTIAL PROCUREMENT POLICY PREFERENTIAL PROCUREMENT POLICY

FRAMEWORK FRAMEWORK FRAMEWORK FRAMEWORK ACT ACT ACT ACT (Act 5 of 2000)(Act 5 of 2000)(Act 5 of 2000)(Act 5 of 2000)

1(e) any specific goal for which a point may

be awarded, must be clearly specified in the

invitation to submit a tender;

(2) Any goals contemplated in subsection 1(e)

must be measurable, quantifiable and

monitored for compliance.

PREFERENTIAL PROCUREMENT

DEFINITIONDEFINITIONDEFINITIONDEFINITION :

Preferential procurement policy is

defined as a “procurement policy that provides objectives additional to those associated with the immediate objective of procurement itself.”

Provides employmentemploymentemploymentemployment and businessbusinessbusinessbusiness

opportunities to targeted groups

NOTENOTENOTENOTE:::: Preferential Procurement does

notnotnotnot guaranteeguaranteeguaranteeguarantee work to the

targeted group.

PREFERENTIAL PROCUREMENT

PPPFA ALIGNED TO BBBEE

New Preferential Procurement Regulations gazetted on 08 June 2011 - aligned with the prescripts of the Broad-Based Black Economic Empowerment Act No. 53 of 2003

Effective from 07 December 2011

The 20 or 10 points is now awarded to a tenderer based on its BBBEE status level only and not HDI ownership

BBBB----BBEEBBEEBBEEBBEE Status Level of ContributorStatus Level of ContributorStatus Level of ContributorStatus Level of Contributor Number of PointsNumber of PointsNumber of PointsNumber of Points

1 20

2 18

3 16

4 12

5 8

6 6

7 4

8 2

Non-compliant contributor 0

ALLOCATION OF 80/20 POINTS

BBBB----BBEEBBEEBBEEBBEE Status Level of Status Level of Status Level of Status Level of

ContributorContributorContributorContributor

Number ofNumber ofNumber ofNumber of PointsPointsPointsPoints

1 10

2 9

3 8

4 5

5 4

6 3

7 2

8 1

Non-compliant contributor 0

ALLOCATION OF 90/10 POINTS

Pre 2011 PPPFA Regulations contributed to increased participation of those enterprises with HDI shareholding

However, high number but low monetary value of contracts <= R 500 000 – therefore limited success

Financial premium from 2006 to 2010 (5 year period) was 1.4% of cumulative value – lower than assumed

New PPPFA Regulations (2011) make no provision for implementing RDP goals as contemplated in the PPPFA

RELEVANT FINDINGS OF RECENT

RESEARCH

SOCIO-ECONOMIC

OBJECTIVES

PROCUREMENT AS AN PROCUREMENT AS AN PROCUREMENT AS AN PROCUREMENT AS AN

INSTRUMENT OF POLICY INSTRUMENT OF POLICY INSTRUMENT OF POLICY INSTRUMENT OF POLICY

Internationally procurement has been used to:

• stimulate economic activity;

• protect national industry against foreign competition;

• improve the competitiveness of certain industrial sectors;

• remedy regional disparities;

• achieve certain more directly social policy achieve certain more directly social policy achieve certain more directly social policy achieve certain more directly social policy functionsfunctionsfunctionsfunctions

TYPICAL DEVELOPMENT TYPICAL DEVELOPMENT TYPICAL DEVELOPMENT TYPICAL DEVELOPMENT

OBJECTIVES OBJECTIVES OBJECTIVES OBJECTIVES

Development of sectors of an industry, e.g. Small business, women owned business and local industry development.

Development of sub-contractors to Prime Contractors.

Development of management capacity of small businesses

Local Economic Development

Job Creation

Poverty Alleviation

Community-based developments

Policy objectives - business empowermentbusiness empowermentbusiness empowermentbusiness empowerment

- employee empowerment

- job creationjob creationjob creationjob creation

---- development of SMEsdevelopment of SMEsdevelopment of SMEsdevelopment of SMEs

- poverty alleviation

- community based developments

- local economic development

Target group - Targeted Enterprises

race / ethnicity / gender / size /

locality / community parameters

- Targeted Labour

disability / age / residency / race

ethnicity / gender / wage levels /

period of unemployment

FACTORS TO CONSIDER

TARGET GROUP DEFINITION

• locality

• gender, race, ethnicity,citizenship

• age

• wage levels

• disability

• period of unemployment

LabourLabourLabourLabour

TARGETS

• definable

• measurable

• quantifiable

• verifiable

• auditable

Must be :

PPPFA PPPFA PPPFA PPPFA –––– SPECIFIC GOALS SPECIFIC GOALS SPECIFIC GOALS SPECIFIC GOALS

RELATING TO RDPRELATING TO RDPRELATING TO RDPRELATING TO RDP

• the use of local resources

• the use of labour intensive methods

• the use of small, medium and micro enterprises

• job creation

• equity shareholders

• affirmative action principles

• promotion of local enterprises

• skills training and development; and

• community and social investment

CORE COMPONENTS OF BROADCORE COMPONENTS OF BROADCORE COMPONENTS OF BROADCORE COMPONENTS OF BROAD----BASED BASED BASED BASED

BLACK ECONOMIC EMPOWERMENT BLACK ECONOMIC EMPOWERMENT BLACK ECONOMIC EMPOWERMENT BLACK ECONOMIC EMPOWERMENT

CHARTERSCHARTERSCHARTERSCHARTERS

Ownership

Strategic Representation

Employment Equity

Skills Development

Preferential Procurement

Enterprise Development

Corporate Social Investment

IMPLEMENTATION

METHODS

PROCUREMENTPROCUREMENTPROCUREMENTPROCUREMENT

Is the processprocessprocessprocess which creates, creates, creates, creates, managesmanagesmanagesmanages and terminatesterminatesterminatesterminates Contracts.

• TRADITIONAL:• Time

• Quality

• Cost

PROJECT PROJECT PROJECT PROJECT IMPERATIVESIMPERATIVESIMPERATIVESIMPERATIVES

• Socio-economic objectives

• Project Deliverable Project Deliverable Project Deliverable Project Deliverable ––––product and processproduct and processproduct and processproduct and process

ADDITIONAL IMPERATIVE:

PROJECT IMPERATIVESPROJECT IMPERATIVESPROJECT IMPERATIVESPROJECT IMPERATIVES

The Client

The Contracting Entity(Prime Contractor)

The Sub-Contractor

PRIME CONTRACTSPRIME CONTRACTSPRIME CONTRACTSPRIME CONTRACTS

The Contracting Entity

Contractor A Contractor B

The Client

The Sub-Contractor

STRUCTURED JOINT VENTURESSTRUCTURED JOINT VENTURESSTRUCTURED JOINT VENTURESSTRUCTURED JOINT VENTURES

THIRD PARTY

MANAGEMENT

SUPPORT

Performs those

functional activities,

which the Contractor

is unable to perform.

The Contracting

Entity

Performs some

functional activities

The Client

DEVELOPMENT CONTRACTSDEVELOPMENT CONTRACTSDEVELOPMENT CONTRACTSDEVELOPMENT CONTRACTS

• Simplification in bid submission requirements

• Broadening of participation base of small

suppliers

• Waiving of bid requirements

• Contractor registration / prequalification

systems

• Procurement documentation

• Dispute mechanisms

FACTORS TO CONSIDERFACTORS TO CONSIDERFACTORS TO CONSIDERFACTORS TO CONSIDER

DEFINING AND QUANTIFYING

SOCIO-ECONOMIC DELIVERABLES

• Requires a measurable component to enable the amount of

participation by the target group to be quantified

• To provide a level playing field for all tenderers, socio-economic

deliverables and related specifications must be clearly and precisely

defined.

• The key elements associated with socio-economic objects must

accordingly:– Define what constitutes each target group;

– Set goals (targets), measurable in monetary terms, which can be met by engaging the

target groups in the pursuit of predetermined socio-economic / development

objectives;

– Provide for the measurement of key indicators to ensure that goals may be quantified

and audited during the performance of the contract; and

– Set out of the manner in which goals can be achieved, as well as what and how

penalties will be applied in the event that a contractor fails to meet his contractual

obligations.

UNBUNDLING STRATEGIES

Either contract directly with a public body as the prime contractor, or participate as a subcontractor

Unbundling involves breaking down the tender into work components that are small enough for targeted enterprises to compete as a main contractor, or which are suitable for subcontracting as part of the main contract.

Unbundling strategies afford participation opportunities to the full spectrum of targeted enterprises, from those operating as labour only contractors to those operating as prime contractors.

TARGETED PROCUREMENT

SYSTEM

Targeted Procurement provides employment and business opportunities for historically disadvantaged businesses, marginalized individuals and poor communities.

The use of Targeted Procurement enables contracts to be unbundled in a number of ways, viz.:

• by procuring works in the smallest practicable quantities

• by obligating prime contractors to engage targeted enterprises in the performance of their contracts in terms of resource specifications

• by requiring joint venture formation between large businesses and targeted enterprises (known as Structured Joint Venture); and

• by providing third party management support to enterprises which are not capable of operating as prime contractors (known as Development Contracts).

INPUT

PROCESS

OUTPUT

CONVENTIONAL PROCUREMENT CONVENTIONAL PROCUREMENT CONVENTIONAL PROCUREMENT CONVENTIONAL PROCUREMENT SYSTEMSYSTEMSYSTEMSYSTEM

Economic benefits

Technical specifications

Technical design

Contracting strategies

Technical quality assurance

Materials

Plant/equipment

Labour

Management skills

Goods

Services

Products

Assets

INPUT PROCESS

OUTPUT

TARGETED PROCUREMENT SYSTEMTARGETED PROCUREMENT SYSTEMTARGETED PROCUREMENT SYSTEMTARGETED PROCUREMENT SYSTEM

Economic and social benefits

Technical specifications

Technical design

Contracting strategies

Technical quality assurance

Resource specifications

Targeting strategy

Technology choice

Compliance monitoring

Materials

Plant/equipment

Labour

Management skills

Goods - Focussed business

Services participation

Products - Focussed employment

Assets opportunities

THE TARGETED PROCUREMENT THE TARGETED PROCUREMENT THE TARGETED PROCUREMENT THE TARGETED PROCUREMENT

SYSTEMSYSTEMSYSTEMSYSTEM

This system permits socio-economic deliverables

(goals and targets) to be :

•Clearly defined so that they are legally

enforceable.

•Measurable and quantifiable for the purpose of

monitoring and evaluation.

•Verifiable and auditable to satisfy public sector

accountability.

MONITORING REQUIREMENTS AS MONITORING REQUIREMENTS AS MONITORING REQUIREMENTS AS MONITORING REQUIREMENTS AS

SPECIFIED IN SPECIFIED IN SPECIFIED IN SPECIFIED IN PPPFAPPPFAPPPFAPPPFA

1(e) any specific goal for which a point may

be awarded, must be clearly specified in the

invitation to submit a tender;

(2) Any goals contemplated in subsection 1(e)

must be measurable, quantifiable and

monitored for compliance.

TARGETED PROCUREMENT

SPECIFICATIONS

Types Types Types Types of Resource Specificationsof Resource Specificationsof Resource Specificationsof Resource Specifications

Resource SpecificationsResource SpecificationsResource SpecificationsResource Specifications Document Reference Socio-Economic Objectives

Targeting of Affirmable Targeting of Affirmable Targeting of Affirmable Targeting of Affirmable

Business Enterprises Business Enterprises Business Enterprises Business Enterprises

(ABE’s)(ABE’s)(ABE’s)(ABE’s)

TP1

(APP1)Development of sectors of an industry, e.g. SMME’s, HDI owned business,

women owned business and local industry development. The specification

provides for affirmative participation targets to be set by the Client which a

contractor is required to meet in order for the tender to be responsive.

Structured Joint Ventures Structured Joint Ventures Structured Joint Ventures Structured Joint Ventures

(Affirmable Partners)(Affirmable Partners)(Affirmable Partners)(Affirmable Partners)

TP2

(APP2)Development of sub-contractors to prime (main) contractors and development of

management capacity of emerging contractors.

Structured Joint Ventures Structured Joint Ventures Structured Joint Ventures Structured Joint Ventures

(Targeted Partners)(Targeted Partners)(Targeted Partners)(Targeted Partners)

TP3

(APP3)

The specifications provide for the setting of joint venture participation targets by

the Client which promotes participation of target enterprises in a structured

manner.

Targeting of Local Targeting of Local Targeting of Local Targeting of Local

ResourcesResourcesResourcesResources

TP4

(APP4)Local economic development; job creation; poverty alleviation; and community

based developments. The specification provides for the setting of participation

targets for the procurement of local resources in contracts.

Engagement of Targeted Engagement of Targeted Engagement of Targeted Engagement of Targeted

LabourLabourLabourLabour

TP5

(APP5)

Job creation for targeted sectors of the population (based on race, gender,

disability, age, period of unemployment, etc.) and poverty alleviation. The

specification provides for the setting of targeted labour participation and

requires contractors to engage labour in accordance with the specified

conditions.

Targeting of Affirmable Targeting of Affirmable Targeting of Affirmable Targeting of Affirmable

Professional Service Professional Service Professional Service Professional Service

ProvidersProvidersProvidersProviders

TP6

(APP6)Development of sectors of the built environment professions to facilitate skills

development and capacity building. The specification is used for the

appointment of Affirmable Professional Service Providers.

Presently available as South African National Standards (SANS) documents (www.sans.org.za)

EXAMPLE: PARTICIPATION OF

TARGETED LABOUR• These Special Conditions of Bid refer to and are read together with the procedures for

Targeted Construction Procurement - Part 5: Participation of Targeted Labour (SANS 1914-5: 2002)

• Targeted Labour refers to South African citizens classified as Youth who permanently reside, where practical, within a 50km radius of each applicable school. It is incumbent on individuals to demonstrate their claims to such residency on the basis of identification and association with and recognition by members of the school and extended community residing within the target area.

• Youth refers inclusively to young people within the age group of 14 to 35 years as defined in the National Youth Policy 2009-2014.

• The Employer has determined the minimum Contact Participation Goal (CPG) for this contract to be 10 % (ten per cent).

• The minimum CPG is a functionality criteria and any bidder not meeting this requirement will be considered non-responsive and accordingly the bid will be disqualified.

• Penalty for Non-compliance - The Contractor shall pay penalties in accordance with the following formula:

Rand Value of Penalty = 0.05 x (D – Do) x Net Amount

(D)

• Where D = the bid Contract Participation Goal percentage

• Do = Contract Participation Goal achieved in the contract

EXAMPLE: PARTICIPATION OF

TARGETED ENTERPRISES• These Special Conditions of Bid refer to and are read together with the procedures for

Targeted Construction Procurement - Part 1: Participation of Targeted Enterprises (SANS 1914-1: 2002)

• Targeted Enterprises refer to Youth Owned Contractors as registered with CIDB in the GB Category.

• The Employer has determined the minimum Contact Participation Goal (CPG) for this contract to be 50 % (fifty percent).

• The minimum CPG is a functionality criteria and any bidder not meeting this requirement will be considered non-responsive and accordingly the bid will be disqualified.

• Penalty for Non-compliance - The Contractor shall pay penalties in accordance with the following formula:

Rand Value of Penalty = 0.10 x (D – Do) x Net Amount

(100 – Ds)

Where D = the Bid Contract Participation Goal percentage

Do = Contract Participation Goal achieved in the contract

Ds = the specified minimum Contract Participation Goal percentage

100 = the maximum possible Contract Participation Goal percentage that can be

achieved

EVALUATION OF TENDERS ON

FUNCTIONALITY

Must indicate in the invitation to tender if to be evaluated on functionality

If evaluating on functionality, the criteria must be clearly specified in the tender invitation

Will not be an acceptable tender if it fails to achieve the minimum score for functionality

Only tenders achieving the minimum qualifying score will be evaluated further using the points system

EMPOWERMENT REQUIREMENTS IN

CONCESSION CONTRACTS

Equity by Disadvantaged Persons in the Bidding Entity

Business Participation by Target Groups

Employee Empowerment

Accounting officers are required to have:

•an appropriate procurement and provisioning

system which is fair, equitable, transparent,

competitive and cost effective;

•effective, efficient and transparent systems of

financial and risk management and internal control;

and

•a system for properly evaluating all major capital

projects prior to a final decision on the project.

PUBLIC FINANCE MANAGEMENT ACT (PFMA)

REQUIREMENTS FOR PROCUREMENT AND

DELIVERY MANAGEMENT

CHALLENGES &

CONSTRAINTS

•access to markets

•skills

•finance

•supportive institutional

arrangements.

CONSTRAINTS TO BUSINESS CONSTRAINTS TO BUSINESS CONSTRAINTS TO BUSINESS CONSTRAINTS TO BUSINESS

DEVELOPMENTDEVELOPMENTDEVELOPMENTDEVELOPMENT

CHALLENGES AND BARRIERS

• Resistance to Change

• Prejudice / Attitudes

• Fronting and Abuse

• Lack of Monitoring and Reporting

• Effective Supply Side Measures

• Quality Management and Assurance

THANK YOU

QUESTIONS?