EXPENDITURE: STORES AND PROCUREMENT
PROCUREMENT POLICIES AND PROCEDURES:
CITY OF JOHANNESBURG
1.OBJECTIVE
To have in place a procurement policy and procedure document so as to ensure that the Council contracts for, and purchases goods and/or services in accordance with a system that is fair, equitable, transparent, competitive and cost effective.
2.AIMS
2.1To provide a policy framework within which the Council and its affiliated Utilities,
Agencies and Corporatised entities can implement an effective procurement procedure.
2.2To promote fiscal discipline associated with the procurement of goods and/or services and/or work.
2.3To broaden the supplier base of vendors concluding business with the City of Johannesburg, and in the process, promote and sustain local economic development and growth.
2.4To reduce the Council’s exposure and risk associated with ineffective procurement practices.
2.5To promote better management control over procurement practices.
2.6To reduce operational costs and ensure optimum utilisation of human and material resources associated with the procurement function.
2.7To produce management information on various aspects of procurement, as and when required.
2.8To promote commercial and economic equity between previously enfranchised, and disenfranchised individuals, as well as previously marginalised trading concerns.
3.LEGISLATIVE FRAMEWORK
The following legislation shall govern the policies and procedures set out herein, and shall be read in conjunction with these policies and procedures.
Any pertinent legislation promulgated from time to time shall take preference over these policies and procedures, or in the case of any other procurement policy and/or procedure being approved by Council, in which case the latter shall apply.
3.1The Constitution of the Republic of South Africa: Act No 108 of 1996.
3.2The Preferential Procurement Policy Framework Act: Act No 5 of 2000, and the Preferential Procurement Regulations 2001 as published there under in terms of Government Gazette No 22549 dated 10 August 2001 under Notice R725.
3.3The Local Government Municipal Structures Act: Act No 117 of 1998.
3.4The Local Government Municipal Structures Amendment Act: Act No 33 of 2000.
3.5Section 12 Notice, Government Gazette Notice 6766 of 2000 as amended, establishing the City of Johannesburg.
3.6The Local Government Municipal System Act: Act No 32 of 2000.
3.7Section 35 of the Local Government Ordinance No 17 of 1939.
3.8Gauteng Rationalisation of Local Government Affairs Act No 10 of 1998.
3.9The Local Government Transition Act 1993 and the Regulations published there under, being the Regulations regarding the Calling of Tenders as published in Government Gazette No 19300 of 20 October 1998 under Notice R1224 (“the Dispensing with Tenders Regulations”) and also the Amendment of Dispensing with Tender Regulations as published in Government Gazette No 19886 of 26 March 1999 under Notice No R387.
The relevant sections contemplated in the aforementioned legislation and underlying delegations shall remain in force and shall be expressly followed until repealed or rescinded.
3.10The Delegations of Power to the Executive Director: Finance.
3.11Delegations of Power to the Managing Director of the Utilities, Agencies or Corporatised Entities.
3.12Delegations of Power and/or Committee mandates granted to Senior Officials and/or Section 79/80 Committees.
3.13In the case of the Council’s trading entities, procurement shall be governed by applicable clauses set out in the Sale of Business agreements and/or Service Level Agreements, and/or Company Constitution, and/or in terms of powers and/or functions confirmed on the Board of Directors of that particular Utility, Agency or Corporatised entity.
4.DEFINITIONS AND INTERPRETATION
This policy is drafted in the English Language, and interpretation shall be in accordance therewith.
No part of this Policy and Procedure document shall be enforceable if found to be in conflict with any National or Provincial legislation.
Unless otherwise stated, the Council shall mean the City of Johannesburg, including the Utility, Agency or Corporatised entity, established in term of the Igoli 2002 plan. In these Policy and Procedure documents, unless the context indicates otherwise:
4.1The Executive Director: Finance, shall be the official as applicable, within the Core Administration, Utility, Agency, or Corporatised entity’s, head of Finance or his/her nominee.
4.2All legislative definitions and/or interpretations shall be as set out in the body of the applicable legislation.
4.3The Stores and Procurement section shall mean the function within the respective Core Administration, Utility, Agency or Corporatised entity responsible for procuring goods and/or services and/or works on its behalf.
4.4Buyer shall mean any official specifically employed by Council or its Utilities, Agencies or Corporatised entity to carry out the function of procurement within Core Administration or said entity.
4.5 Spot purchases shall be defined as those purchases made on a quotation or catalogue
price basis, in terms of Government Gazette Number 19300, Regulation 1224 of 2 October 1998 as amended.
4.6 Contract/s shall mean an agreement entered into by virtue of a formal tender process
and shall include proposal calls, the former being as defined in the Preferential Procurement Policy Framework Act of 2000.
4.7Delegations of Power shall be those powers as applicable, delegated to the Executive
Director: Finance in terms of a Council or Board of Directors Resolution, or to
another official stated therein, or further delegated.
4.8Where reference is made to a specific incumbent of a post such reference shall be that
person held against said post or their nominee.
4.9ABE shall mean Affirmable Business Enterprise as contemplated in the Public Sector Procurement Policy of the Department of Public Works.
4.10Unless otherwise stated, where a designation of a particular Core Administration official is cited, this official shall in the case of a Utility, Agency or Corporatised entity be the Managing Director or his/her nominee of that particular concern.
4.11HDI shall mean “Historically Disadvantaged Individual (HDI)” means a South African citizen –
(1)who, due to the apartheid policy that had been in place, had no franchise in national elections prior to the introduction of the Constitution of the Republic of South Africa, 1983 (Act 110 of 1983) or the Constitution of the Republic of South Africa, 1993 (Act No 200 of 1993) (“the Interim Constitution”); and/or
(2)who is a female; and/or
(3)who has a disability
Provided that a person who obtained South African citizenship on or after the coming to effect of the Interim Constitution is deemed not to be an HDI.
4.12SMME’s shall mean Small, Medium and Micro enterprises as defined in the National Small Business Act, Act No 102 of 1996.
4.13Tenders for the purpose of this policy document shall mean an open tender process requesting a written offer in response to an enquiry forming part of an invitation to tender, such invitation having a clearly defined scope of supply.
4.14Proposal call shall mean the formal calling for bids for work/services/goods that are not clearly defined by way of a scope of supply.
4.15Any Delegation referred to herein may be further delegated, provided such further delegation is permitted by legislation, or policy.
4.16Core Administration shall mean the Council functions not forming part of a Utility, Agency or Corporatised entity.
4.17“Purchase on Contract” shall mean procurement of goods/services/work, as and when required from a tender approved by Council.
4.18Utility, Agency or Corporatised entity (UAC) shall be those trading concerns, of which the City of Johannesburg is the majority shareholder, and were established in terms of the IGOLI 2002 reconstruction plan.
5.PROCUREMENT POLICY
5.1The Council shall procure goods/works/services by way of an open process which is
fair, equitable, transparent, cost effective and competitive.
5.2The procurement of goods/services/work shall be just and unbiased towards any
individual or trading concern, save for the promotion of HDI, SMME’s and/or ABE concerns as detailed elsewhere in the Policy and Procedure document.
5.3The Councillors and staff of the City of Johannesburg, including the Utilities, Agencies or Corporatised entities, shall not be associated in any way with any vendor or trading concern involved in Council business, unless such interest has been declared and approved by the Council or Municipal Manager, as the case may be, and shall be governed by the code of conduct in the case of the former and the conditions of service in the case of the latter.
5.4Tenders Portfolio Committee shall be that Portfolio Committee specifically constituted by Council, for the purposes of dealing with the acceptance/rejection of tender/ proposal calls.
5.5The request to suppliers for any offer for goods/services/work shall be such that it is easily understood by potential suppliers.
5.6Any procurement undertaken shall encourage competition amongst suppliers, ensuring that Council endeavours to obtain best value for money.
5.7The procurement of goods/works/services by Council without the calling for tenders shall be in accordance with the procedure and regulations set out in Module A or Module B, as applicable.
5.8Emergency purchases shall be in accordance with the procedure and regulations set out in Module C.
5.9The procurement of goods/services/works by way of open tender or proposed call, shall be regulated in accordance with the criteria set out in Module D.
5.10The sale of any goods and/or materials no longer required by Council, shall be sold
in accordance with, and governed by the process and procedure set out in Module E.
5.11The Council shall in accordance with the regulation and procedure set out herein, give preference to the protection or advancement of persons or categories of persons disadvantaged by unfair discrimination, and shall make the granting of such preferences public though the procurement process.
5.12No Council employee or Councillor shall accept either directly or indirectly, any commission, gratuity, gift or other consideration in respect of any contractual agreement between the Council, its business entities, and any contractor, or any person employed by the contractor.
5.13Unless otherwise stated, the Generic Procurement Principles stated herein shall be considered as being part of the Procurement Policy of Council, and shall apply to the Core Administration, Utilities, Agencies and Corporatised entities as defined in Section 4 (Definitions and Interpretations).
5.14The Council may from time to time include in its tender documentation, clauses and/or conditions of tender that are seen by Council as being in the financial or other interest of the City.
5.15Unless otherwise prescribed by legislation, all monetary figures shall include all taxation at the legislated rate.
5.16The following tendering/proposal criteria shall apply to all Council tenders, and shall define the “Scope of Supply”,
5.16.1 The background to the project/procurement and/or the project/procurement
objectives.
5.16.2 The primary responsibilities of the lead consultants/Contractor/Agent.
5.16.3 The primary responsibilities of the Council.
5.16.4 Indicative time frames for the project/delivery.
5.16.5 Proposal/Tender submission requirements.
5.16.6 The timetable for submitting proposals/tenders.
5.16.7 The standard requirements of the Council.
5.16.8 The reservation of the Councils rights to terminate the contract/contract
period.
5.16.9 The Council’s input to the contract/delivery site.
5.16.10 Reporting requirements/Supply of tender information.
5.16.11 Source documentation applicable to the contract, and the availability thereof.
5.16.12 Council official :Contact details.
6.GENERIC PROCUREMENT PRINCIPLES
The Procurement Principles identified hereunder shall be applicable to Council as defined, unless indicated to the contrary.
6.1All Council related procurement shall be concluded through the procurement and tendering system, as applicable from time to time. No procurement outside of these Policies and Procedures will be permitted.
6.2Procurement shall be effected in accordance with affirmable business procurement targets and performance indicators as prescribed by the Mayoral Committee from time to time, and defined elsewhere herein. Such targets will be communicated by way of a Directive.
6.3No Core Administration other than the Corporate Finance: Stores and Procurement section shall be permitted to procure any stock items or items held as inventory held in a General Core Administration Store.
6.4All Utilities, Agencies and Corporatised entities shall be responsible for their own inventory procurement in terms of the sale of Business Agreements.
6.5All Council tenders/proposal calls shall be in accordance with the standard tender/proposal documentation as approved by Council, save for instances where the service function is letting a contract through an appointed consultant, agent or specialist service provider. In these instances, the tender/proposal documentation shall be pre-approved by the Executive Director: Finance and Executive Director: Corporate Services or in the case of the Utilities, Agencies or Corporatised entities, the Board of Directors, prior to advertising. The contents of this principle shall be seen in context of the Delegation of Powers as approved, and shall be subject thereto.
6.6All Core Administration tender/proposal documentation shall be sold through the Stores and Procurement section, and shall be charged in accordance with the minor tariff charges applicable from time to time.
6.7Core Administration, official orders shall only be generated though the Executive Director: Finance and at sites specifically nominated by him/her. No hand written orders may be issued by any section/department, other than the Stores and Procurement section.
6.8Splitting of orders so as to enable the quantum of the procurement to be below the value for which tenders must be called, will not be permitted, and will be considered as a contravention of Regulation 1224 as amended.
6.9In respect of the Council, The Executive Director: Finance, City of Johannesburg, may from time to time propose to Council amendments to the Policies and Procedures set out herein, where such amendment is required by Legislation, and/or relevant Council Policy, and/or is considered to be in the Councils best interests.
6.10The Executive Director: Finance, City of Johannesburg, may from time to time, after considering the Council financial situation, place more onerous conditions and criteria with regard to procurement. Such conditions shall be included within the bounds of these policies and procedures, and shall remain in force until withdrawn in writing.
6.11The respective Executive Director: Finance shall not reduce or waive the obligations and criteria set out within this policy and procedure documents, unless so required by Legislation, or having first obtained the authority of Council, the Mayoral Committee or its nominated portfolio committee as the case may be.
6.12It is policy of the various Stores and Procurement sections to purchase goods/services/work at best value for money. Any purchase made, and the resulting quality of the final purchase, is only as good in quality as the specification detailing the purchase. All procurement shall consider the technical content, the quality, price and commercial equity aspects of the purchase.
6.13Any Council official requisitioning goods/services/works must exercise fiscal discipline in procuring goods/services/works, and shall only procure subject to sufficient funds having been made available.
6.14Any Council official granted permission to generate a Requisition and/or purchase enquiry, shall have registered his/her signing authority and specimen signature with the relevant head of Procurement, in a manner prescribed by that incumbent.
6.15The respective Executive Director: Finance or his/her nominee, reserves the right to question the validity and authenticity of any procurement-generated document, or any support documentation associated thereto.
6.16No Council entity shall deviate from the Policies, Procedures operational criteria or performance targets without the express consent of the Mayoral Committee, City of Johannesburg.
6.17Where practically feasible the Council and its Utilities, Agencies and Corporatised entities should combine their procurement requirements into a single unbundled tender to enjoy the benefits of economies of scale, and to reduce overhead administration costs.
6.18All Council issued invitations to tender or quote shall be distributed as widely as possible, ensuring that a wide target market is reached, and without intentionally precluding any potential supplier.
6.19Procurement from a “sole supplier” as contemplated in Government Gazette Regulation 1224, shall be subject to the trading merchant showing written, authenticated proof, of their sole supplier status. The use of “sole suppliers” shall be at the discretion of the Council.
6.20Appeals in respect of invalid and irregular tenders and/or breaches of tender agreements shall be dealt with in accordance with the legal framework.
6.21Where applicable, Council procurement specifications for goods/services shall include for the quality certification as set out in applicable CKS standards, SABS standards, ISO 9000, or any other Nationally recognised quality standard.
6.22Extensions of contracts shall be in accordance with applicable Legislation, subject to the approval of the relevant Committee with the prescribed “Level of Authority”.
6.23Unless otherwise agreed, all source documentation shall be in the original, and shall accompany the flow of documentation through the procurement operation in accordance with the Council’s procedure applicable thereto.
6.24At least three written quotations shall be required in respect of all spot purchases, unless otherwise agreed to by the Executive Director: Finance, subject to legislative constraints.
6.25The Executive Director : Finance and/or his/her nominee/s will determine the process to be followed in respect of finalising end of Financial Year procurements and stock purchases indicating the last date on which purchases and stock withdrawals may be made, preceding the 30 June close off.
6.26The acceptance of any proposal, tender or quotation shall be during the validity period for which the offer holds good.
7.LEVEL OF AUTHORITY
7.1Each particular procurement process, and the authority to conclude the transaction resulting therefrom, shall be governed by level of authority applicable thereto.(Refer to Module A, B, C, D & E).
7.2The hierarchical structure of procurement authority shall be as follows, and shall be implemented according to the financial mandates and terms of reference approved and assigned to that level of authoritsation from time to time.
COUNCILTerms of
MAYORAL COMMITTEEReference/
(EXECUTIVE MAYOR)Mandates
TENDERS PORTFOLIO COMMITTEEavailable from
DELEGATION OF POWERS TO SENIOR OFFICIALSCorporate Services (Legal
Section)
The aforementioned authorisation level shall be applicable to all departments within Council, and shall exclude the Council’s trading concerns, who shall have their own levels of authority as set out in the Sale of Business and Service Level Agreements as approved by Council.
Each Council Committee when considering the award of a tender/proposal, will do so in accordance with said Committees Terms of Reference and/or mandate, or in the case of delegated powers to senior Council officials, in accordance with such delegation as applicable. It remains the responsibility of each Head of Department to ensure correct routing of Tender Proposal reports, and to ensure that the correct level of approval has been obtained, before commencing work.