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  • 8/12/2019 Legislative Policies - Mangaung - Procurement Policy

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    A. BACKGROUND INFORMATION

    1. INTRODUCTION

    1.1 During 2002, MLM developed the IDP which spells out the vision of the Municipality, the challenges and priority

    areas which MLM has to address to meet the needs of community. The vision of MLM has been translated into 4

    strategic thrusts, namely (1) Economic growth, (2) Service Excellence, (3) Community resilience and (4) Civic

    Leadership. To make this strategic intent a reality, a number of key priority areas were identified to ensure focus

    on the right areas to contribute significantly towards the achievement of MLM goals. It was against this

    background that MLM recognized the need to actively allow participation of the historically disadvantaged

    community within the economic mainstream. This is meant to address the imbalances created by the past.

    1.2 Participation of the historically disadvantaged individuals in the economic activities of the country has been very

    limited. The municipality has always procured goods and services from service providers, with limited

    participation of the historically disadvantaged groups (HDIs). As a result this procurement approach mainly

    benefited a small portion of the Mangaung community and was not representative of the population within

    Mangaung. Furthermore the government is also concerned about the impact of the exclusions of the previouslydisadvantaged from meaning full participation in the mainstream economic activities in the country to boost

    economic growth and reduce unemployment.

    1.3 During the development of the IDP, it was also discovered that, in general, the overall economy is declining or

    stagnant. Whilst it is the primary objective of MLM to affirm the historically disadvantaged community, it is also

    critical to utilise procurement as a tool to s timulate and promote local business development.

    1.4 It is therefore imperative for MLM to align its current procurement policy to the objectives of the IDP. The

    purpose of the revised policy is therefore to promote entrepreneurship to allow the historically disadvantaged

    individuals, particularly blacks, access to the mainstream of business opportunities. This will be achieved by

    increasing business opportunities for HDIs and maximising purchases of goods and services from these

    companies. Emphasis will need to be placed on supporting local businesses to boost the economy of Mangaung

    and the Free State area.

    1.5 Notwithstanding the above, the primary task of MLM procurement function shall always be to find reliable, cost

    effective suppliers for the organisation. On the one hand, HDI companies will not be treated any differently from

    the norm with regard to quality, expected service delivery and technical performance. On the other hand, it is

    required that all personnel associated with MLMs procurement must be made aware of this initiative and are

    expected to commit themselves to its implementation through good faith, efforts and appropriate purchasingprocedures.

    2. EFFECT ON MLM STRATEGIC THRUST

    2.1 Economic growth

    The increasing involvement of the historically disadvantaged individuals in the procurement of goods and services

    within MLM will ensure more participation of such individuals in the economy. This means people who never had

    the opportunity to work before, will now be in a position to get employment and become economically active. This

    may results in the increase of skills level and encouragement of entrepreneurial practices that could yield positive

    economic growth and also expand the rates and taxes base of the Municipality.

    2.2 Service excellence

    The challenges that the municipality is facing is meeting the ever increasing community demands with limited

    resources, mostly financial, available. To be the benchmark municipality will require the commitment and

    contribution of every person that impacts on service delivery. Service providers form an integral part of the

    MANGAUNG LOCAL MUNICIPALITYAFFIRMATIVE PROCUREMENT POLICY

    Approved by Council on 10 July 2003 under item 8A3

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    strategy of service excellence. The policy has to address elements relating to the quality of service delivered to the

    community and ensure cost effective and efficient practices are applied to do more with available resources. The

    latter will lower input costs for business as a result of cost effectiveness, which in turn will lead to investor

    attraction.

    2.3 Community resilience

    In order to build community resilience, it is necessary to facilitate the involvement of local community members in

    the procurement of services from service providers. Opportunity areas for community capacity building will haveto be identified when procuring goods and services to encourage effective use of community resources, build

    social cohesion and an inclusive society. Higher quality of life and skilled workforce will ensure a reliable supply

    of labour.

    2.4 Civic leadership

    Issues regarding cooperate governance are important in the supply value chain to ensure high level of

    accountability and responsibility. Promotion of best practices in corporate governance, business ethics will ensurethat investors view the city as a place of choice for investment

    B. MLM PROCUREMENT POLIC Y

    1. PURPOSE

    This document outlines the procurement policy of Mangaung Local Municipality (MLM) that is intended to

    achieve a transparent and consistent procurement supply chain in line with the vision of MLM.

    2. SCOPE

    The policy is applicable to all directorates within MLM.

    3. OBJECTIVE

    3.1 To ensure that the procurement of goods and services including the appointment of professional service

    providers is done in the most effective, efficient and consistent manner.3.2 To demonstrate MLMs commitment towards the achievement of National Governments black economic

    empowerment goals.

    3.3 To facilitate the engagement of HDIs in the procurement process.

    3.4 To promote equity, fairness and increased participation of local business in the MLM procurement process.

    3.5 To outline the process followed by MLM in tendering and awarding of contracts.

    4. REFERENCES4.1 The Constitution Act 200 of 1996.

    4.2 The Preferential Procurement Framework Policy Act, 2001 (Act No. 5 of 2001).

    4.3 The Preferential Procurement Regulations, 2001

    5. RESPONSIBILITIES

    5.1 City Manager Ensures strict adherence to the guidelines provided in this policy

    Implementation of policy

    Annual review of affirmative procurement target and policy

    Approves the inclusion of a service provider in MLM procurement process after rehabilitation of the

    service provider according to statutory requirements

    Approves the composition of the tender evaluation committees

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    5.2 Executive Directors Commitment towards the achievement of target set

    In consultation with Corporate Services, identify opportunity areas for participation of HDIs and develop

    plan to assist and engage such HDIs.

    Develop user requirement specification to acquire goods or services

    Ensure all procurement is done in a manner that complies with all company and labour legislation.

    5.3 Executive Director Corporate Services

    Custodian of the procurement policy and report on progress regarding its implementation.

    Conducts procurement audit of the entire procurement process to identify successes and failures for

    incorporation into a lessons learnt database.

    Overall management of the tendering process from solicitation to processing of invoice payment once work

    has been completed

    Promotes corporate approach by encouraging standardization of items purchased within MLM to realize

    economies of scale

    Provides supplier interface on supplier performance issues

    Ensures that procurement is made through practices that demonstrate compliance to all relevant legislation

    Responsible for sourcing suppliers and procurement of goods and services to ensure that the procurement

    process of MLM is adhered to

    Ensures that the process followed to procure goods and services for MLM adheres to preference targetswithout compromising price, quality, service delivery and developmental objectives

    Responsible for ensuring that all employees involved in the development of enquiry document, tendering

    and tender adjudication receive necessary training to support implementation of this policy

    Responsible for establishing the amount to be paid by prospective tenderers as a non-refundable deposit for

    enquiry documents issued by MLM

    Responsible for the verification of all registered service providers for inclusion on the roster

    Submit regular reports to Finance Portfolio Committee regarding progress and any matters of importancerelating to the procurement policy

    Responsible for placing an advertisement in the press during February every year to invite professional

    service providers to register on MLM professional service provider roster

    Responsible for the verification and probity of all registered service providers for inclusion on the service

    database and professional service provider roster

    6. DEFINITIONS

    6.1 BEE (Black Economic Enterprises)

    A service provider, partnership or legal entity with PDI ownership, risk and control of more than 6