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NRCS CSP 503-04

SUPPLY CHAIN

MANAGEMENT POLICY

Compiled by

CFO

Approved by

CEO

Date of approval

29 January 2014

Date of implementation

01 February 2014

Doc No: NRCS CSP 503-04

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Contents

1. Purpose ............................................................................................................................................ 5

2. Scope ............................................................................................................................................... 5

3. Informative and normative ............................................................................................................... 5

3.1 Normative ................................................................................................................................ 5

3.2 Informative ............................................................................................................................... 5

4. Definitions and Terminology ............................................................................................................ 5

5. Annexures ........................................................................................................................................ 8

6. Replacement and withdrawal ........................................................................................................... 8

7. Revision history ................................................................................................................................ 9

8. Elements of Supply Chain Management ....................................................................................... 10

9. Demand Management ................................................................................................................... 10

10. Acquisition Management ........................................................................................................... 11

10.1 General Principles ................................................................................................................. 11

10.2 Threshold values for Acquisitions ......................................................................................... 12

11. Logistics Management .............................................................................................................. 12

11.1 General .................................................................................................................................. 12

11.2 Placing of orders ................................................................................................................... 12

11.3 Ordering process ................................................................................................................... 12

11.4 Vendor performance ............................................................................................................. 12

11.5 Stores/warehouse management ........................................................................................... 13

11.6 Issuing/distribution of items ................................................................................................... 13

11.7 Stocktaking ............................................................................................................................ 13

12. Disposal and Letting of State Assets ........................................................................................ 13

13. Service Providers and Specialised Services ............................................................................. 14

13.1 Service Provider Performance and Selections ..................................................................... 14

13.2 Procurement of Information Technology and Information Technology Services .................. 14

13.3 Appointment of Consultants .................................................................................................. 15

14. Price Quotations ........................................................................................................................ 17

14.1 Price Quotations Process ...................................................................................................... 17

14.2 Price Quotations requirements .............................................................................................. 17

15. Competitive Bids ....................................................................................................................... 18

15.1 Competitive Bidding Process ................................................................................................ 18

15.2 Invitation of Bids .................................................................................................................... 18

15.3 Bid Specification Committee ................................................................................................. 18

15.4 Bid Evaluation Committee ..................................................................................................... 19

15.5 Bid Adjudication Committee (BAC) ....................................................................................... 19

16. Deviations to Normal Procurement Procedures ........................................................................ 21

17. Contracts and Legal Services ................................................................................................... 21


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17.1 Contracts ............................................................................................................................... 21

17.2 Contract Administration ......................................................................................................... 22

17.3 Legal Services ....................................................................................................................... 23

18. Other considerations ................................................................................................................. 23

18.1 Risk Management ................................................................................................................. 23

18.2 Training of SCM Officials ...................................................................................................... 23

18.3 Non-Compliance ................................................................................................................... 23

18.4 National Industrial Participation Programme (NIPP) ............................................................. 24

18.5 Reporting of Supply Chain Management Information ........................................................... 24

19. Compliance, Responsibilities and Accountabilities ................................................................... 24

19.1 SCM Official’s responsibilities ............................................................................................... 24

19.2 Responsibilities of all employees, including SCM Officials ................................................... 24

19.3 NRCS Management Responsibilities .................................................................................... 25

19.4 Finance Department’s responsibilities .................................................................................. 25

20. SCM transaction principles ....................................................................................................... 26

20.1 NRCS Financial Thresholds .................................................................................................. 26

20.2 Exceptions iro quotations and RFQ’s .................................................................................... 26

20.3 Goods and Services above the transaction value of R 500 000 (VAT Included) .................. 26

21. Bids based on functionality as a criterion .................................................................................. 27

22. NRCS Suppliers ........................................................................................................................ 28

22.1 Registration of suppliers on the accounting system.............................................................. 28

22.2 Establishment of supplier database ...................................................................................... 28

23. Pre SCM Process ...................................................................................................................... 29

23.1 Process preceding the SCM process .................................................................................... 29

23.2 Process preceding the SCM process .................................................................................... 29

24. Obtaining of quotes / RFQ Process .......................................................................................... 30

24.1 Process flow for RFQ process .............................................................................................. 30

24.2 Obtaining quotes for RFQ ..................................................................................................... 31

24.3 Quotes not required .............................................................................................................. 31

24.4 Issuing of Requisitions .......................................................................................................... 31

24.5 Orders ................................................................................................................................... 31

24.6 GRV and Payments .............................................................................................................. 32

25. The Bid / Tender Process ......................................................................................................... 32

25.1 Process flow for bid / tender process .................................................................................... 32

25.2 Bid Adjudication Committee .................................................................................................. 33

25.3 User requirements and Business Case /motivations ............................................................ 33

25.4 Specification of goods/works or services .............................................................................. 33

25.5 The RFB Process .................................................................................................................. 34

25.6 Planning an RFB ................................................................................................................... 34

25.7 Preparing the Bid Documents ............................................................................................... 35

25.8 Publication of Bids ................................................................................................................. 35


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25.9 Information Meetings or Site Inspections .............................................................................. 35

25.10 Communicating with Prospective Bidders ......................................................................... 36

25.11 Changing of Information .................................................................................................... 36

25.12 Submission of Bids ............................................................................................................ 36

25.13 Closing Date of Bids .......................................................................................................... 36

25.14 Validity Period of Bids ....................................................................................................... 37

25.15 Opening and Screening of Bids ........................................................................................ 37

25.16 Late Bids ........................................................................................................................... 37

25.17 Consideration of Bids ........................................................................................................ 37

25.17.1 Clarification of Responses ............................................................................................ 37

25.17.2 Cancellation and Re-invitation of Bids .......................................................................... 37

25.18 Other matters iro Bids ....................................................................................................... 38

25.19 SARS Tax Clearance Certificate ....................................................................................... 38

25.20 Evaluation of Bids.............................................................................................................. 38

25.21 Evaluation Phases............................................................................................................. 39

25.21.1 Phase 1: Mandatory Specification Evaluation ............................................................... 39

25.21.2 Phase 2: Financial Evaluation ....................................................................................... 39

25.21.3 Phase 3: Awarding of Points ......................................................................................... 39

25.21.4 Phase 4: Calculation of points for B-BBEE status level of contributor .......................... 40

25.21.5 Phase 5: Company Profile ............................................................................................ 40

25.21.6 Phase 6: Approval of Bids ............................................................................................. 40

25.22 Evaluation of bids that scored equal points ...................................................................... 41

25.23 Notification and Debriefing ................................................................................................ 41

25.24 Contract Negotiation and signing ...................................................................................... 41

26. Records ..................................................................................................................................... 41

27. ANNEXURE A : SCM DELEGATION OF AUTHORITY ........................................................... 42


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SECTION 1: MANDATORY INFORMATION

1. Purpose

This document serves to set the policy for a fair, equitable, transparent, competitive, cost effective and

uniform acquisition process for goods and services within the NRCS.

2. Scope

The scope of this document is to outline the policy that must be followed by NRCS staff for the

acquisition of goods and services.

3. Informative and normative

3.1 Normative

CPO 620 Conflict of Interest

CSP 502 Approval routes and limits for expenditure - Delegation of Authority

CSP 520 Petty cash

CSP Code of Conduct

CSP Asset Management Policy

CPO 600 Fraud Prevention Policy

CPO 160 Enterprise Risk Management Policy

PFMA Public Finance Management Act (No.1 of 1999, as amended)

PPPFA Preferential Procurement Policy Framework Act, 2000 (No.5 of 2000, as amended)

BBBEEA Broad Based Black Economic Empowerment Act, 2003 (No.53 of 2003

PAIA The Promotion to Access of Information Act, (No.2 of 2000, as amended)

PAJA Promotion of Administrative Justices Act, 2000 (Act 3 of 2000 as amended)

SITA State Information Technology Act, 1998 (Act 88 of 1998 as amended)

National Treasury Circulars, Guidelines and Practice Notes on SCM

The Prevention of and Combating of Corrupt Activities Act (No.12 of 2004 as amended)

Competition Act, 1998 (Act 89 of 1998 as amended)

CIDB Act 38 of 2000

3.2 Informative CPO 110 Code of ethics

CPO 601 Zero tolerance fraud and corruption policy

4. Definitions and Terminology

Term /

Abbreviation

Definition /

explanation

Details

Accounting

Authority

NRCS Board Accountable authority for a public entity as indicated in the

PFMA.

B-BBEE Broad Based Black

Economic

Empowerment Act

(No.53 of 2003)

Means broad-based black economic empowerment as defined

in section 1 of the Broad-Based Black Economic Empowerment

Act.

B-BBEE

status level of

Means the B-BBEE status received by a measured entity based

on its overall performance using the relevant scorecard


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Term /

Abbreviation

Definition /

explanation

Details

contributor contained in the Codes of Good Practice on Black Economic

Empowerment, issued in terms of section 9(1) of the Broad-

Based Black Economic Empowerment Act.

BEC Bid Evaluation

Committee

Committee appointed by the CFO to evaluate bids and

recommend bids for award.

BSC Bid Specification

Committee

Committee appointed by the CFO to establish the requirements

for a new bid.

BAC Bid Adjudication

Committee

Committee appointed by the CEO to award bids.

BU Head Business Unit Head Head of a business unit within NRCS, regardless of the level of

seniority.

Bid or tender Means a written offer in a prescribed or stipulated form in

response to an invitation by NRCS for the provision of services,

works or goods, through price quotations, advertised

competitive bidding processes or proposals.

Bidder Any natural or legal person who makes an offer in response to

an RFB, RFP or RFQ.

CEO Chief Executive

Officer

Is the Administrative head of the NRCS

CFO Chief Financial

Officer

General responsibility of the CFO is to assist the Accounting

Authority in discharging the duties prescribed in Part 2 of

Chapter 6 of the PFMA.

Chairperson Means the person duly elected to chair any of the SCM bid

committees.

Closed Bid Any bid that is not open for general public and limits the number

of possible responses.

EME Exempted Micro

Enterprises

Means any enterprise with annual total revenue of R5 million or

less.

Executive Most senior head of a business unit, appointed as an Executive

or acting executive in the NRCS

Fruitless and

Wasteful

Expenditure

Expenditure which was made in vain and would have been

avoided had reasonable care been exercised as defined in the

PFMA.

Functionality Means the measurement according to predetermined norms, as

set out in the tender documents, of a service or commodity that

is designed to be practical and useful, working or operating,

taking into account, among other factors, the quality, reliability,

viability and durability of a service and the technical capacity

and ability of a tenderer.

GRV Goods receipt

voucher

An internal transaction to record the receipt of goods from

suppliers.

HDI/PDI Historically /

Previously

disadvantaged

individual

An individual as defined in the PPPFA who is a South African

citizen who previously had no participation in National Elections

prior to the introduction of the Constitution, and/or who is

female and/or as a disability.

Irregular

Expenditure

Expenditure, other than unauthorised expenditure, incurred in

contravention of, or that is not in accordance with a requirement

of any applicable legislation, as defined in the PFMA.


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Term /

Abbreviation

Definition /

explanation

Details

Outsourcing The provision of an agreed deliverable or level of service for a

pre-determined fee stipulated in a formal agreement.

Official Means a person in the employ of NRCS.

Level “A”

delegation

The highest level of delegation below that of CEO. This level of

authority is usually delegated to an Executive.

It can also be delegated to a specific person for a specific project,

period or function that a person performs on a regular basis as

part of that person’s performance of his/ her daily duties.

Level “B”

delegation

The next lower level of delegation to a level “A” delegation. This

level of authority is usually, but not necessarily delegated to a

General Manager.

Such delegations may also be given to Regional Manager /

Senior Managers / Manager in business units where there is no

General Manager.

It can also be delegated to a specific person for a specific project,

period or function that a person performs on a regular basis as

part of that person’s performance of his/ her daily duties.

Management Refers to the level below the Executives and includes General

Managers, Senior Managers and Managers.

PFMA Public Finance

Management Act

To regulate Financial Management in entities, national

government and provincial governments; to ensure that all

revenue, expenditure, assets and liabilities of those

governments are managed efficiently and effectively; to provide

for the responsibilities of persons entrusted with financial

management in those governments.

PPPFA Preferential

Procurement Policy

Framework Act (Act

No.5 of 2000) &

Regulations

Act which provides preference towards previously

disadvantaged individuals and RDP goals.

Preferred

Supplier

A type of a supplier from which NRCS can derive economic

benefits as compared to other similar suppliers.

QSE Qualifying Small

Enterprises

Qualifying Small Enterprises as defined in the DTI’s BBBEE

Act.

QN Quotation note Refers to a quotation which is received from a supplier

Rand Value Means the total estimated value of a contract in South African

currency, calculated at the time of tender invitations, and

includes all applicable taxes and excise duties.

Restricted

Service

Provider

Means A Non-preferred Service Provider who has been listed

by National Treasury and must not be used by the NRCS for

the entire period of prohibition.

RFB

RFP

Request for Bid or

Request for

Proposal

Request for a purchase above the threshold value for

quotations sent out on bid to the market.

RFI Request for

Information

Request for information on purchase of goods and services.

RFQ Request for

Quotation

Request for purchase which is below the threshold value of

bids.

SARS South African


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Term /

Abbreviation

Definition /

explanation

Details

Revenue Services

SLA Service Level

Agreement

An agreement between the NRCS and a provider of services to

the NRCS.

SCM Supply Chain

Management

An organ intended to formalise the procurement environment

within the NRCS.

Sub-

Contracting

The primary contractor’s assigning or leasing or making out

work to, or employing another person to support such a primary

contractor in the execution of part of a project in terms of the

contract.

TOR Terms of Reference Statement of the background, objectives, and purpose of a

program, project, or proposal.

TR Treasury

Regulations

Regulations issued by National Treasury which support the

implementation of the PFMA.

Tax

Clearance

Certificate

A Tax Clearance Certificate as issued by the South African

Revenue Services, where the bidder is registered for Income

Tax or VAT purposes.

Transversal

Contract

Means period contracts that are arranged by National Treasury

for more than one Department to participate in.

Unsolicited

Bid

Means a proposal presented to the NRCS by a contractor,

consultant or service provider, through his/her own initiative,

without having been invited to do so by the NRCS.

Unauthorized

Expenditure

Overspending of a

budget or not in line

with the main

purpose of the

budget

A payment or part of a payment on a good or service

authorised in terms of the budget, resulting in the total amount

appropriated for the budget item concerned, being exceeded

without being approved according to the Delegation of Authority

(CSP501), as per the PFMA.

VAT Value Added Tax Value-Added Tax is commonly known as VAT. VAT is an

indirect tax on the consumption of goods and services in the

economy. Revenue is raised for government by requiring

certain businesses to register and to charge VAT on the taxable

supplies of goods and services. These businesses become

vendors that act as the agent for government in collecting the

VAT.

5. Annexures

5.1 Annexure A: SCM Delegation of Authority

6. Replacement and withdrawal

This Policy replaces the previous Procurement policy – CSP 503-03


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7. Revision history

Rev No Effective date Nature of revision

01 Editorial changes, alignment of terminology with NT

notes and clarification of certain delegations and

deviations. Refer to:

Clause 4 (definitions) and clauses

11.9.3.6; 23.5.2; 23.5.3; 27.1,2,3,4,5; 27.5.2;

27.5.3; 27.6.2; 27 6.3; 33.2; 34.2.1.4; 34.27 and

34.29(f)

Annex A Monetary threshold values

Annex B – Delegation authority


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SECTION 2: SCM POLICY

8. Elements of Supply Chain Management

A supply chain management system must-

8.1 Be fair, equitable, transparent, competitive and cost effective;

8.2 Be consistent with the Preferential Procurement Policy Framework Act, 2000 (Act 5 of 2000);

8.3 Be consistent with the Broad Based Black Economic Empowerment Act, 2003 (Act 53 of

2003); and

8.4 Provide for at least the following-

8.4.1 Demand management;

8.4.2 Acquisition management;

8.4.3 Logistics management;

8.4.4 Disposal management;

8.4.5 Risk management; and

8.4.6 Regular assessment of supply chain performance.

9. Demand Management

9.1 Demand management is the first phase of SCM. The objective is to ensure that the resources

required to fulfill the needs identified in the strategic plan of the institution are delivered at the

correct time, price and place and that the quantity and quality will satisfy those needs. As part

of this element of SCM, a total needs assessment should be undertaken. This analysis should

be included as part of the strategic planning process of the NRCS and hence will incorporate

the future needs.

9.2 The SCM Unit must ensure that:

9.2.1 Future as well as current needs are understood;

9.2.2 Requirements are linked to the budget;

9.2.3 Specifications are determined;

9.2.4 The need forms part of the strategic plan of the NRCS;

9.2.5 An industry and commodity analysis is conducted


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9.3 Demand Management is intended to build discipline into how the NRCS plans for its business

requirements, the implementation of this element of SCM will be a phased approach.

9.4 BU Heads must, annually, align activities in their business plan, operational plan and

approved budget allocations, with the capital procurement requirements of the NRCS to

develop a Demand Management Plan.

9.5 The Supply Chain Manager must analyze key issues, assess the appropriateness of existing

purchases and identify the need and time frames for new requirements in support of service

delivery.

9.6 The Supply Chain Manager must develop sourcing strategies and buying mechanisms to

address the Demand Management Plan.

9.7 The NRCS must submit to the relevant authority by 30 April of each year, a procurement plan

containing all planned procurement for the financial year in respect of the procurement of

goods, works and/or services which exceed R500 000 (all applicable taxes included).

9.8 The procurement plan must be approved by the CEO prior to its submission.

9.9 The Supply Chain Manager may consider the following alternative strategies prior to the

acquisition process:

9.9.1 acquisition of redundant/obsolete material, goods and assets from other institutions;

9.9.2 sourcing of expertise from other institutions;

9.9.3 utilization of transversal contracts administered by other institutions;

9.9.4 local versus international sourcing; or

9.9.5 public / private partnerships.

10. Acquisition Management

10.1 General Principles

10.1.1 Acquisition Management provides guidance on how goods, services and assets should be

procured from the market place.

10.1.2 All procurement over R500 000 must be in line with the Demand Management Plan.

Exceptions must be approved by the CEO.

10.1.3 Service Providers must be selected on the basis of best value for money, therefore the

selection of Service Providers must be based on functionality and price according to the

threshold value’s indicated in the attached Annexure A.

10.1.4 All NRCS staff members must comply with the standard procurement methods, which include

quotations and Bids.

10.1.5 The appointment of consultants must adhere to standard procurement procedures as

indicated in Practice Note 3 of 2003.

10.1.6 It is the responsibility of the end-user / BU Head to finalise detailed terms of reference /

specifications and manage the appointed consultants.

10.1.7 NRCS staff members may only consider an unsolicited Bid by a Service Provider in

conjunction with Practice Note 11 of 2008/2009.

10.1.8 The business unit will pre-empt the procurement process by completing the following:

10.1.8.1 A completed requisition, duly approved ito the Delegation of Authority

10.1.8.2 A business case duly authorised in terms of the Delegation of Authority for all

procurement over R30 000.00 or where SCM deems necessary.

10.1.9 The Supply Chain Manager will initiate the formal process after which BEC evaluation will be

constituted to evaluate the bids received and arriving at a recommendation that will be

submitted to the BAC.

10.1.10 Bids awards shall be published in the media by which the bids were advertised.

10.1.11 NRCS shall comply with all Treasury Regulations relating to Supply Chain Management that

will be issued from time to time.


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10.2 Threshold values for Acquisitions

The threshold values for procurement of goods, works and services:

Value Procurement method

Up to R2000 No quotes necessary

Above R2000 up to

R10 000 per case

At least three (3) verbal or written quotations must be obtained and where possible

from the list of prospective suppliers and the official order must be placed against a

written confirmation from the selected supplier if the quotation was submitted verbally.

Above R10 000 up

to R30 000 per case

At least three (3) written quotations must be obtained from as many suppliers as

possible that are registered on the list of prospective suppliers

Above R30 000 up

to R500 000 per

case

Invite and accept written price quotations for requirements up to an estimated value of

R500 000 from as many suppliers as possible, that are registered on the list of

prospective suppliers. The 80/20 preference point system is applicable to bids with

Rand value equal to, or above R30 000 and up to a Rand value of R1 million (all

applicable taxes included). No tender may be awarded to any person whose tax

matters have not been declared by the South African Revenue Services to be in order.

Above R500 000 per

case

Competitive bids must be invited for all procurement above R500 000. Should it be

impractical to invite competitive bids for specific procurement, e.g. in urgent cases or in

case of a sole supplier, the NRCS may procure the required goods or services by

other means, such as price quotations or negotiations in accordance with Treasury

Regulation 16A6.4. No tender may be awarded to any person whose tax matters have

not been declared by the South African Revenue Services to be in order. The 90/10

preference point system is applicable to bids with a Rand value above R 1 million (all

applicable taxes included).

11. Logistics Management

11.1 General

This aspect pertains, among others, to coding of items, setting of inventory levels, placing orders,

receiving and distribution, stores/warehouse management, expediting orders, transport management

and vendor performance. This process should also activate the financial system to generate

payments.

11.2 Placing of orders

An order should be placed either when a pre-determined stock level is reached or when a request is

received from an end user for an item which is not held in stock.

11.3 Ordering process

11.3.1 Contract purchase: Where a contract exists, orders should be placed for the item from the

contract.

11.3.2 Price quotations/competitive bidding method: Where there is no contract, the price quotation

or competitive bidding method of ordering should be applied within delegated authority.

11.4 Vendor performance

The reliability of the supplier should be monitored in terms of, among others-

11.4.1 Delivery periods;

11.4.2 Quality; and

11.4.3 Quantity

Should problems be encountered, they should be followed up with the vendor and, if it is a contract

item, it should also be reported to the body that arranged the contract.


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11.5 Stores/warehouse management

11.5.1 Expediting orders: If the delivery conditions reflected on the order form are not complied

with, it should be followed up with the supplier immediately.

11.5.2 Receiving of items: All goods received should be verified for quality and quantity against the

ordering documentation. It is recommended that a receipt voucher be generated for payment

purposes.

11.5.3 Storage: Municipal, legal stipulations and safety regulations should be complied with when

items are being stored, e.g. flammables, poison, explosives, ammunition, weapons, etc. An

effective item location system should be utilized. Shelf-life of stock should be taken into

consideration.

11.5.4 Stock and equipment should be stored properly and arranged in such a manner that the

checking and handling thereof are being facilitated and the possibility of damage, exposure,

deterioration and perishing thereof is limited or eliminated.

11.6 Issuing/distribution of items

11.6.1 An issue voucher should be generated for all goods issued.

11.6.2 Consumable items should not be recorded after issue.

11.6.3 Non-consumable items should be recorded from receipt to disposal.

11.6.4 Transit officials should ensure that goods are delivered promptly to the end-user.

11.7 Stocktaking

Stocktaking of all assets in stock or on distribution shall be conducted at least once a year. This

procedure entails the comparison of stock counted with official records of what should be in stock.

Differences should then be accounted for.

12. Disposal and Letting of State Assets

12.1 Disposal of movable assets must be at market-related value or by way of price quotations,

competitive bids or auction, whichever is most advantageous to the state, unless determined

otherwise by the relevant Treasury.

12.2 Notwithstanding the provisions of the paragraph above, the NRCS may transfer movable

assets free of charge to other departments, constitutional institutions or public entities by

means of formal vouchers.

12.3 Any sale of immovable state property must be at market-related value, unless the relevant

treasury approves otherwise.

12.4 The letting of immovable state property (excluding state housing for officials and political

office bearers) must be at market-related tariffs, unless the relevant treasury approves

otherwise. No state property may be let free of charge without the prior approval of the

relevant treasury.

12.5 The NRCS must review, at least annually when finalizing the budget, all fees, charges, rates,

tariffs or scales of fees or other charges relating to the letting of state property to ensure

sound financial planning and management.

12.6 The NRCS must, when disposing of computer equipment, firstly approach any state institution

involved in education and/or training to determine whether such an institution requires such

equipment. In the event of the computer equipment being required by such a state institution,

the NRCS may transfer such equipment free of charge to the identified institution.


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13. Service Providers and Specialised Services

13.1 Service Provider Performance and Selections

13.1.1 Supply Chain Management Unit shall verify the National Treasury’s Register for Tender

Defaulters and Database of Restricted Suppliers prior to awarding any bid to ensure that no

recommended bidder or any of its directors are listed as companies or persons prohibited

from doing business with the public sector.

13.1.2 The NRCS must use the service provider database when considering the procurement of any

goods or services through quotations.

13.1.3 The following exceptions shall apply where NRCS is able to obtain quotes outside its

database, where the SCM Manager shall approve such cases:

13.1.3.1 In instances where there are insufficient suppliers on the database

13.1.3.2 The current suppliers approached for quotes are not responsive

13.1.3.3 The services requested are unique

13.1.3.4 Certain emergency cases

13.1.4 The Supply Chain Manager must ensure that the service provider database is accurately

maintained.

13.1.5 At the completion stage of material projects, an assessment of the service and service

provider should be undertaken and this assessment should be available for future reference.

13.1.6 Payment to supplier will only be for goods supplied or services rendered.

13.2 Procurement of Information Technology and Information Technology Services

13.2.1 NRCS as a Schedule 3A entity may at its discretion on whether to acquire any of the

mandatory or non-mandatory services from SITA.

13.2.2 Mandatory (“must”) services that are to be provided by SITA. SITA must provide the following

services to national and provincial departments

13.2.2.1 Provide or maintain a private telecommunication network or a value added

network;

13.2.2.2 Provide and maintain transversal or departmental specific information systems;

13.2.2.3 Provide data-processing or associated services for transversal or departmental

specific information systems;

13.2.2.4 Provide IT (Information Technology) for Government;

13.2.2.5 Set standards for interoperability;

13.2.2.6 Set standards for ISS (information security standards)

13.2.2.7 Set standards for Certification of IT acquisition;

13.2.2.8 Certify all acquisitions for standard compliance;

13.2.2.9 Eliminate duplication; and

13.2.2.10 Leverage economies of scale

13.2.3 Non mandatory (‘may”) services that may be provided by SITA

13.2.3.1 Training in IT or information systems;

13.2.3.2 Application software development;

13.2.3.3 Maintenance of software and infrastructure;

13.2.3.4 Data process for department specific applications or systems;

13.2.3.5 Technology or business advice for IT;

13.2.3.6 Research and development;

13.2.3.7 Management services for IT; and

13.2.3.8 Sell or provide authentication products

13.2.4 In the event that these services are acquired from SITA, it should be in accordance with

business and service level agreements. Should SITA indicate in writing that it is unable to


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provide the service itself, SITA will act as the procurement agent to acquire such services on

behalf of NRCS.

13.2.5 In instances where SITA acts as the procurement agent on behalf of an institution, SITA must

facilitate the procurement process strictly in terms of the prescribed legislation. SITA will

make a recommendation to NRCS on a preferred bidder(s). The NRCS, however, retains the

right to accept or reject SITA’s recommendation.

13.3 Appointment of Consultants

13.3.1 Appointment for consultants for specific products may be considered. However, appointment

of consultants may only be done with prior approval of the Chief Executive Officer and in line

with Practice Note 3 of 2003.

13.3.2 Consultants should be appointed by means of competitive bidding processes, whenever

possible. All bids and contracts should be subject to the General Conditions of Contract

(GCC) issued by the National Treasury.

13.3.3 The term consultants includes, among others, consulting firms, engineering firms,

construction managers, management forms, procurement agents, inspection agents, auditors,

other multinational organizations, investment and merchant banks, universities, research

agencies, government agencies, non-governmental organizations (NGOs), and individuals.

13.3.4 The NRCS may use these organizations as consultants to assist in a wide range of activities

such as policy advice, NRCS’s reform management, engineering services, construction

supervision, financial, procurement services, social and environmental studies and

identification, preparation, and implementation of projects to complement NRCS’s capabilities

in these areas.

13.3.5 Consultants should only be engaged when the necessary skills and/or resources to perform a

project/duty/study are not available and the NRCS cannot be reasonably expected either to

train or to recruit people in the time available.

13.3.6 The relationship between the NRCS and the consultant should be one of purchaser / provider

and not employer / employee. The work undertaken by consultant should be regulated by a

contract. The NRCS is, however, responsible for monitoring and evaluating contractor

performance and outputs against project specifications and targets and should take remedial

action if performance is below standard.

13.3.7 The procedures outlined herein apply to all contracts for consulting services. In procuring

consulting services, the NRCS should be satisfied that

13.3.7.1 the procedures to be used will result in the selection of consultants who have the

necessary professional qualifications;

13.3.7.2 the selected consultant will carry out the assignment in accordance with the

agreed schedule, and

13.3.7.3 the scope of the services is consistent with the needs of the project.

13.3.8 The NRCS should be responsible for preparing and implementing the project, for selecting the

consultant, awarding and subsequently administering the contract. While the specific rules

and procedures to be followed for selecting consultants depend on the circumstances of the

particular case, at least the following major considerations should guide the NRCS’s policy on

the selection process:

13.3.8.1 the need for high-quality services;

13.3.8.2 the need for economy and efficiency;

13.3.8.3 the need to give qualified consultants an opportunity to compete in providing the

services; and

13.3.8.4 the importance of transparency in the selection process.

13.3.9 Considerations could include, but are not limited to:

13.3.9.1 Qualification of key personnel

13.3.9.2 Experience relevant to assignment


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13.3.9.3 Methodology used

13.3.9.4 Training or transfer of knowledge and skills

If the assignment includes an important component for training or transfer of

knowledge and skills, the Terms of Reference (TOR) should indicate the

objectives, nature, scope and goals of the training programme, including details

of trainers and trainees, time frames and monitoring and evaluation

arrangements. The cost for the training programme should be included in the

consultant’s contract and in the budget for the assignment.

13.3.10 Establishment of a list of approved service providers

13.3.10.1 Where consultancy services are required on a recurring basis, a panel of

consultants / list of approved service providers for the rendering these services

may be established. These panels / lists should be established through the

competitive bidding process, usually for services that are of a routine or simple

nature where the scope and content of the work to be done can be described in

detail.

13.3.10.2 The intention to establish a panel / list of approved service providers is published

in the Government Tender Bulletin and the closing time and date for inclusion in

the panel/list of approved service providers should be indicated. For this purpose,

a questionnaire should make provision for the following:

Full details of the service provider, among others:

Composition of the firm in terms of shareholding;

Personnel complement;

Representation of expertise in respect of the disciplines required, e.g.

accounting, legal, educational, engineering, computer, etc

National / international acceptability of experts in the various professions;

Experience as reflected in projects already dealt with; and

Financial position

Requirements for admission to the list and criteria should be linked to the numeric

value in terms of which applicants will be measured, for example qualifications,

experience, acceptability and resources, etc. A pre-determined standard method

of awarding points should be followed.

13.3.10.3 The applications received should be evaluated and any rejection of applicants

should be motivated and recorded.

13.3.10.4 Once the panel/approved list of service providers has been approved, only the

successful applicants are approached, depending on the circumstances, either by

obtaining quotes on a rotation basis, or according to the bid procedure when

services are required, with the exception that the requirement is not advertised in

the Government Tender Bulletin again.


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14. Price Quotations

14.1 Price Quotations Process

14.2 Price Quotations requirements

14.2.1 Transaction values up to R2 000

14.2.1.1 There is no requirement for quotations

14.2.1.2 In the event Petty cash is utilised to pay for the transaction, the Bank and Cash policy

must be adhered to

14.2.2 Transaction values over R2 000 up to R 10 000

14.2.2.1 At least three (3) verbal or written quotations must be obtained.

14.2.2.2 Where possible quotes should be from the list of prospective suppliers

14.2.2.3 An official order must be placed against a written confirmation from the selected

supplier if the quotation was submitted verbally

14.2.3 Transaction values over R 10 000 up to R 30 000

14.2.3.1 At least three (3) written quotations must be obtained from as many suppliers as

possible

14.2.3.2 Suppliers should be registered on the list of prospective suppliers, exceptions may

however exist. (Refer 20.2)


supplier.


14.2.4.1 Invite and accept written price quotations for requirements up to an estimated value

of R500 000 from as many suppliers as possible,

14.2.4.2 Suppliers should be registered on the list of prospective suppliers.

14.2.4.3 The 80/20 preference point system is applicable to bids with Rand value equal to, or

above R30 000 and up to a Rand value of R1 million (all applicable taxes included).

14.2.4.4 No tender may be awarded to any person whose tax matters have not been declared

by the South African Revenue Services to be in order.


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15. Competitive Bids

15.1 Competitive Bidding Process

15.2 Invitation of Bids

15.2.1 Bid documents must be compiled by making use of Standard Bid Documents, General

Conditions of Contract, Special Conditions of Contract and the relevant Terms of Reference

or Specifications.

15.2.2 The CFO must authorize the levying of a non-refundable deposit for Bid documents as and

when required.

15.2.3 All invitations for Bid using the bidding process must be advertised in the Government Tender

Bulletin for a period of at least 21 days before the closing date.

15.2.4 The BAC may approve a shortening of the closing period to a minimum of 14 days.

15.2.5 Bids received after the closing period must not be considered.

15.3 Bid Specification Committee

15.3.1 The Bid specification committee shall be appointed by the CFO, on recommendation from the

SCM Manager and must meet prior to the invitation of any Bid.

15.3.2 The BSC should comprise of 3 or more representatives to make up the diverse, cross

functional team. The BSC may include (but not limited to):

15.3.2.1 The BU Head

15.3.2.2 Functional expert

15.3.2.3 Managers responsible or associated with the bid,

15.3.2.4 End users,

15.3.2.5 Supply Chain representative,

15.3.2.6 External consultants, where necessary

15.3.3 The responsibility of the this committee is to prepare a specification or terms of reference for

a bid, that is consistent with procurement policies and regulations, that covers the total scope

of the project, that takes into account all the deliverables and requirements of the bid.

15.3.4 The BSC must also determine the evaluation criteria for every Bid.


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15.3.5 The specifications should be written in an unbiased manner to allow all potential bidders to

offer their goods and or services.

15.3.6 Evaluation criteria and bid specifications must be approved by the Bid Adjudication

Committee.

15.4 Bid Evaluation Committee

15.4.1 This committee is responsible for the evaluation of bids received, which includes:

15.4.1.1 The assessment of functionality (the capability/ability of the bidder to execute the

contract)

15.4.1.2 The bidders compliance to the mandatory criteria (eg: tax clearance certificate

issued by SARS, or other mandatory criteria included in the specification)

15.4.1.3 Assessment of compliance to the national industrial participation programme

requirements (only applicable for contracts in excess of R10 million)

15.4.2 The BEC must only evaluate bids in accordance with the criteria specified in the bid

documentation.

15.4.3 The Bid Evaluation Committee members must be appointed by the CFO.

15.4.4 The BEC should comprise of 3 or more representatives to make up the diverse, cross

functional team. The BEC may include (but not limited to):

15.4.4.1 The BU Head

15.4.4.2 Functional expert

15.4.4.3 Managers responsible or associated with the bid,

15.4.4.4 End users,

15.4.4.5 Supply Chain representative,

15.4.4.6 External consultants or independent experts as observers, where necessary

15.4.5 The Evaluation Committee must evaluate the functional requirements of the Bids and must

make recommendations to the Bid Adjudication Committee.

15.5 Bid Adjudication Committee (BAC)

15.5.1 The Bid Adjudication Committee must be appointed in writing by the CEO and the CEO will

determine the term of office for members.

15.5.2 The BAC must consist of at least four senior officials constituted as follows:

BAC Role Stipulations

Chairperson Where possible, the chairperson should be the Chief Financial Officer.

Other members The Bid Adjudication Committee should be composed of cross-

functional teams comprising:

A minimum of 3 senior officials (management)

SCM representative

Legal representative

Where considered necessary, additional officials or advisors may

be co-opted on account of their specialized knowledge.

Secretariat An official from the institution’s SCM Unit must be made available to act

as secretary.

Quorum

The Bid Adjudication Committee should only consider

recommendations/ reports if at least sixty percent (60%) of its members

are present.

Secundi For the purpose of continuity and not to delay meetings, the CEO may

also appoint secondi to temporarily replace members that are absent

from meetings due to illness, leave, etc. The CEO will also decide


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BAC Role Stipulations

whether or not such secundi will have the same powers as members.

BEC

representation

The project owner shall be in attendance when their bid is discussed,

but will not have voting rights

Members of BEC may present / assist in presenting the report to the

BAC.

15.5.3 The Bid Adjudication Committee must consider the recommendations / reports of the Bid

Evaluation Committee and:

15.5.3.1 Make a final award

15.5.3.2 Make another recommendation to the Project owner on how to proceed with the

relevant procurement in the event that an award is not made.

15.5.4 The SCM unit must ensure that relevant approvals in terms of the Delegation of Authority are

obtained after the BAC has made its award.

15.5.5 The Bid Adjudication Committee must ensure that:

15.5.5.1 All necessary bid documents have been submitted;

15.5.5.2 Disqualifications are justified and that valid and accountable reasons /

motivations were furnished for passing over the bids;

15.5.5.3 Scoring has been fair, consistent and correctly calculated and applied; and

15.5.5.4 Bidders’ declarations of interest have been taken cognizance of.

15.5.6 If a bid other than the one recommended by the Bid Evaluation Committee is approved by the

Bid Adjudication Committee, the CEO, must first be notified.

15.5.6.1 The CEO may after consideration of the reasons for the deviation, ratify or reject

the decision of the Bid Adjudication Committee.

15.5.6.2 If the decision of the Bid Adjudication Committee to approve the one other than

the one recommended by the Bid Evaluation Committee is ratified, the Auditor-

General, the relevant provincial treasury and the National Treasury must be

notified of the reasons for deviating from such considerations.

15.5.7 The CEO / Accounting Authority may at any stage refer any recommendation made by the Bid

Evaluation Committee or the Bid Adjudication Committee back to that committee for

reconsideration.

15.5.8 The Bid Adjudication Committee must also consider and rule on all recommendations /

reports regarding the amendment, variation, extension, cancellation or transfer of contracts

awarded.

15.5.9 The BAC is restricted to adjudicating whether the process of procurement was fair, equitable,

transparent, competitive and cost effective.

15.5.10 The BAC must:

15.5.10.1 Reject a Bid from a service provider who fails to provide written proof from the

South African Revenue Service (SARS) that the service provider either has no

outstanding tax obligations or has made arrangements to meet outstanding tax

obligations.

15.5.10.2 Reject a recommendation for the award of a contract if the recommended Bidder

has committed a corrupt or fraudulent act in competing for the particular contract.

15.5.10.3 Cancel a contract awarded to a service provider of goods or services if:


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15.5.10.3.1 The service provider committed any corrupt or fraudulent

act during the bidding process or the execution of that

contract ; or

15.5.10.3.2 Any official or other role player committed any corrupt or

fraudulent act during the bidding process or the execution of

that contract that benefited that service provider.

15.5.11 The BAC may disregard the bid of any bidder if that bidder or any of its directors have:

15.5.11.1 Abused the institution’s SCM system

15.5.11.2 Committed fraud or any other improper conduct in relation to the SCM system

15.5.11.3 Failed to perform on any previous contract.

16. Deviations to Normal Procurement Procedures

16.1 Deviations to the normal procurement procedures refers to special services, cases of urgency

and emergency, cases where the invitation of Bids is not in the best interest of the NRCS.

16.2 The reasons for deviating from the normal procurement procedures must be recorded and

approved in accordance with the Delegations of Authority.

16.3 Special services are services such as specialist technology / expertise where limited

capacity in the market exists e.g. copyright or patents and investigations that require

specialized testing and expertise.

16.4 Urgent procurement is where early delivery is of critical importance and the invitations of

competitive Bids are either impossible or impractical.

16.5 Emergency procurement is due to imminent or transpired crises, disaster or tragedy,

immediate action is necessary in order to avoid a dangerous or risky situation, misery or want.

16.6 Applicable rules in the case of deviations.

16.6.1 Emergency or urgent procurement must not be used to circumvent normal

procurement procedures, as a result of insufficient stock-levels for items that are

used daily, as a result of poor or inadequate planning or as a result of

no/insufficient internal communication.

16.6.2 Ex post facto procurement may be approved in line with the delegations of

authority provided the procurement was in the best interest of the NRCS.

17. Contracts and Legal Services

17.1 Contracts

17.1.1 Contracts must be approved in terms of the DOA.

17.1.2 Prior to signing a formal contract or service level agreement with a contractor, NRCS must

ensure that such contracts or agreements are legally sound to avoid potential litigation and to

minimize possible fraud and corruption. This must include legal vetting by at least the Legal

Services of NRCS and applicable BU Head.

17.1.3 Such contracts or agreements must be actively managed in order to ensure that both the

NRCS and the contractors meet their respective obligations.

17.1.4 The procurement processes at SCM gives rise to the need for the formulation of formal

contracts to ensure the necessary protection of all rights and obligations between NRCS and

suppliers.

17.1.5 It is necessary to enter into a formal written contract for all SCM of goods and services

estimated in value over R 500 000 provided by suppliers where NRCS determines the

complexity and/or risk to be significant enough to warrant it.


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17.1.6 For purposes of this policy, a contract is an agreement between two or more competent

persons to perform or not to perform a specific act or acts.

17.1.7 A contract will be in writing. A purchase order containing NRCS pre-printed standard terms

and conditions, when accepted by a supplier, becomes a contract but a formal written

contract is necessary for values over R 500 000 as stated above.

17.1.8 An order should never be placed for values exceeding this amount without a contract except

where negotiations to finalize a contract is underway and where orders must be placed to

meet NRCS’s required delivery dates. If this is done, the terms and conditions of the

applicable Request for Bid (or Proposal) should be made to apply until the final contract is

executed.

17.1.9 Acceptance may be either in writing or by performance unless the purchase order requires

acceptance to be in writing. All agreements must be signed by the appropriate levels as

designated in the Delegation of Authority.

17.1.10 Contracts generally fall into two categories of types, either for products or services and they

are commitment or non-commitment, or any combination thereof.

17.1.11 All contracts should be captured on the accounting system and purchase order should also be

generated from the same system. All transactions should be initiated through generation of an

electronic purchase order.

17.1.12 The CFO may provide written authority to the SCM unit to negotiate a contract on behalf of

NRCS, in conjunction with the Legal Division.

17.2 Contract Administration

17.2.1 The SCM Unit must maintain a complete register of contracts.

17.2.2 The end-user must manage contracts and inform the Supply Chain Manager of any non-

performance or breach of contracts by the service providers.

17.2.3 Any contract variation must be approved as per the delegations of authority.

17.2.3.1 It is recognized that, in exceptional cases, NRCS may deem it necessary to

expand or vary orders against the original contract.

17.2.3.2 The absence of a prescribed threshold for the expansion or variation of orders

against the original contract has, however, led to gross abuse of the current SCM

system.

17.2.3.3 For transactions with an original value over R500 000, the BAC may expand

or vary any contract by not more than

17.2.3.3.1 20% or R20 million (including all applicable taxes) for construction

related goods, works and/or services and

17.2.3.3.2 15% or R15 million (including all applicable taxes) for all other goods

and/or services of the original value of the contract, whichever is the

lower amount.

17.2.3.4 For transactions with an original value of R500 000 or less, the CFO may

expand or vary any contract by not more than

17.2.3.4.1 20% for construction related goods, works and/or services and

17.2.3.4.2 15% for all other goods and/or services of the original value of the

contract, whichever is the lower amount.

17.2.3.5 Any deviation in excess of these thresholds must be approved by the CEO

17.2.3.5.1 Over 20% for construction related goods, works and/or services and

17.2.3.5.2 Over 15% for all other goods and/or services of the original value of

the contract, whichever is the lower amount.

17.2.3.5.3 The cases approved by the CEO should be exceptional, and

supported by thorough arguments and business cases from the

responsible BU.


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17.2.3.5.4 Once approval is provided, the NRCS must forward the approval

together with a motivation, as required by National Treasury to

National Treasury and the Auditor-General within 10 Days.

17.2.3.6 The contents of paragraph 17.2.3.3, 17.2.3.4, 17.2.3.5 are not applicable to

transversal term contracts facilitated by the relevant treasuries and specific term

contracts as in such contracts, orders are placed as and when commodities are

required and that at the time of awarding the contract, required quantities are not

known.

17.2.4 If a Service Provider fails to deliver any of or all of the goods or fails to perform services within

the period(s) specified in the contract, the NRCS shall, without prejudice to its other remedies

under the contract, deduct from the contract price as penalty, a sum calculated on the

delivered price of the delayed goods or unperformed services. The NRCS may also consider

termination of the contract.

17.2.5 Controls will be implemented to ensure that contracts are not extended to circumvent quote or

bid process

17.3 Legal Services

Legal Services should be involved when all contracts/memorandum of agreements are concluded.

18. Other considerations

18.1 Risk Management

18.1.1 All NRCS staff members involved in procurement must comply with the approved Risk

Management and Fraud Prevention Plan.

18.1.2 The Supply Chain Manager is responsible for setting up independent verification control

points within the SCM processes to mitigate risks.

18.1.3 Risks and rewards of ownership will only be transferred to the NRCS on acceptance, of the

assets or goods on the premises of the NRCS by a duly authorised NRCS official.

18.1.4 The responsibilities of reporting any known fraudulent or non-compliance activity will rest with

all NRCS officials.

18.1.5 The Supply Chain Manager must report on regularly to the CFO on the performance of SCM.

18.2 Training of SCM Officials

18.2.1 The CFO must ensure that officials implementing the NRCS’s supply chain management

system are trained and deployed in accordance with the requirements of the Framework for

Minimum Training and Deployment issued by the National Treasury.

18.3 Non-Compliance

18.3.1 NRCS officials must comply with the standard operating procedures issued in terms of this

policy.

18.3.2 Where an NRCS official is suspected of breaching the policy or allegation made against an

official, an internal investigation must be undertaken preferably by Internal Audit division and

depending on the outcome, internal, civil and/or criminal legal action may be instituted against

the employee. Conduct that may constitute an offence will be reported to the South African

Police Services.

18.3.3 Any disciplinary action arising from breach of this policy will be taken according to the

disciplinary code and grievance procedure of the NRCS.


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18.4 National Industrial Participation Programme (NIPP)

18.4.1 The NRCS must obtain clearance for a recommended bidder from the Department of Trade

and Industry, in respect of contracts which are subject to the National Industrial Participation

Program of that Department.

18.5 Reporting of Supply Chain Management Information

18.5.1 The CFO must submit to the relevant Treasury such supply chain management information as

that Treasury may require.

19. Compliance, Responsibilities and Accountabilities

19.1 SCM Official’s responsibilities

Each SCM official must: 19.1.1 Ensure that in any procurement related negotiation or evaluation, all participants are dealt

with fairly with all quotations and bids in a manner that reflects the ethical principles in the

code of conduct for SCM practitioners as contained in Practice Note SCM4 of 2003.

19.1.2 Comply with the code of conduct which obliges all officials to refuse gifts, hospitality, favors or

any other act that would materially compromise the credibility and integrity of the SCM

system.

19.1.3 Comply with the highest ethical standards in order to promote –

19.1.3.1 Mutual trust and respect; and

19.1.3.2 An environment where business can be conducted with integrity and in a fair and

reasonable manner

19.1.4 Adhere to The National Treasury’s Code of Conduct for Supply Chain Management

Practitioners

19.1.5 Sign the relevant Codes of Conduct with an undertaking to adhere to their requirements as

per National Treasury Practice Note No. 7 of 2009/2010. This includes newly appointed

officials or officials transferred to the SCM unit should also be required to sign the Codes of

Conduct.

19.1.6 Comply with the NRCS Code of Ethics, which acts as a guideline for ethical behavior.

19.1.7 Upon becoming aware of a breach of or failure to comply with any aspect of the supply chain

management system, must immediately report any the breach or failure to the Accounting

Authority, in writing.

19.2 Responsibilities of all employees, including SCM Officials

19.2.1 All employees must adhere to the SCM policies and procedures

19.2.2 All employees must recognize and disclose any conflict of interest that may arise;

19.2.2.1 Must treat all suppliers and potential suppliers equitably and fairly;

19.2.2.2 May not use their position for private gain or to improperly benefit another person;

19.2.2.3 Must ensure that they do not compromise the credibility or integrity of the supply

chain management system through the acceptance of gifts or hospitality or any

other act;

19.2.2.4 Must be scrupulous in their use of public property; and

19.2.2.5 Must assist CEO and Accounting Authority in combating corruption and fraud in

the supply chain management system.

19.2.2.6 Maintain the highest standards of honesty, integrity, impartiality, transparency

and objectivity.

19.2.2.7 Remain and appear to remain independent and at arms- length from any supplier.


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19.2.2.8 Act in such a manner that NRCS’ reputation is not compromised.

19.2.2.9 Avoid any conflict of interest.

19.2.3 If a NRCS supply chain management official or any other role player, or any close family

member, partner or associate of such official or other role player has any private or business

interest in any contract to be awarded, that official or other role player must –

19.2.3.1 Disclose that interest; and

19.2.3.2 Withdraw from participating in any manner whatsoever in the process relating to

that contract. In all cases of withdrawal, the proceedings must be documented.

19.2.4 All gifts received by NRCS employees or Board Members from suppliers, related to the

procurement activities, shall be declared with the CEO by signing the gift register.

19.2.5 A NRCS staff member who becomes aware of a breach of or failure to comply with any

aspect of the SCM system whether by employees or Board members, must immediately

report the breach or failure to the CFO, CEO and the Board in writing.

19.3 NRCS Management Responsibilities

19.3.1 Each manager is responsible for

19.3.1.1 Ensuring application of this policy in their respective business units / regions

19.3.1.2 Ensuring staff are aware of their responsibilities in terms of this policy

19.3.1.3 Reporting to or ensure the reporting to the SCM Manager (in the office of the

CFO) as required in terms of this policy

19.3.1.4 Ensuring procurement for their business unit is in line with this policy, and all

other financial and non-financial policies.

19.3.2 NRCS Management must take all reasonable steps to prevent abuse of the SCM system, and

investigate any allegations against an NRCS staff member or other role player involved in

corruption, improper conduct or failure to comply with the SCM.

19.3.3 When justified, the Management must:

19.3.3.1 Take steps against such NRCS staff member or other role player;

19.3.3.2 Reject a recommendation for the award of a contract if the recommended bidder

has committed a corrupt or fraudulent act in competing for the particular contract;

or

19.3.3.3 Cancel a contract awarded to a supplier of goods or services if found that the

contractor:

19.3.3.4 Committed any corrupt or fraudulent act during the bidding process or the

execution of that contract; or

19.3.3.5 Any NRCS staff member or other role player committed any corrupt or fraudulent

act during the bidding process or the execution of that contract that benefited that

supplier.

19.3.4 Staff that transgress the SCM process could be charged with criminal charges when found

guilty and a case at the South African Police Services will be opened where fraud is involved.

19.4 Finance Department’s responsibilities

The Finance department is responsible:

19.4.1 For maintaining the SCM policy and related forms

19.4.2 Maintaining the a system of SCM for NRCS

19.4.3 Implementing controls in respect of NRCS SCM

19.4.4 Convening committees required to ensure effective SCM

19.4.5 Report to the CEO any contraventions of this policy

19.4.6 Reporting to National Treasury, the AG, the Board and the ARC, any information as required

in terms of SCM.


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SECTION 3: SCM PROCEDURES

20. SCM transaction principles

20.1 NRCS Financial Thresholds

20.1.1 Transaction values up to R2 000

20.1.1.1 One verbal or written quote will be sufficient

20.1.1.2 In the event Petty cash is utilised to pay for the transaction, the Bank and Cash policy

must be adhered to.

20.1.1.3 Suppliers should be registered on the list of prospective suppliers. Exceptions may

exist in terms of para. 20.2

20.1.2 Transaction values over R2 000 up to R 10 000

20.1.2.1 At least three (3) verbal or written quotations must be obtained.

20.1.2.2 Where possible quotes should be from the list of prospective suppliers


supplier if the quotation was submitted verbally

20.1.2.4 Suppliers should be registered on the list of prospective suppliers. Exceptions may

exist in terms of para. 20.2


20.1.3.1 At least three (3) written quotations must be obtained from as many suppliers as

possible

20.1.3.2 Suppliers should be registered on the list of prospective suppliers, exceptions may

however exist.


supplier.


20.1.4.1 Invite and accept written price quotations for requirements up to an estimated value

of R500 000 from as many suppliers as possible,

20.1.4.2 Suppliers should be registered on the list of prospective suppliers.

20.1.4.3 The 80/20 preference point system is applicable to bids with Rand value equal to, or

above R30 000 and up to a Rand value of R1 million (all applicable taxes included).

20.1.4.4 No tender may be awarded to any person whose tax matters have not been declared

by the South African Revenue Services to be in order.

20.1.4.5 A valid Tax clearance certificate must be attached.

20.2 Exceptions iro quotations and RFQ’s

20.2.1 Where no suitable suppliers are available from the list of prospective suppliers, written price

quotations may be obtained from other possible suppliers.

20.2.2 If it is not possible to obtain at least three written price quotations, the reasons should be

recorded and approved by the CFO.

20.2.3 Where the market or the service is highly specialized it may be appropriate to confine

quotations to known vendors.

20.2.4 For instances where this limited source approach is applied, the NRCS staff member

requesting this process must document the reasons for it and how the process to fulfill the

requirements will not affect open and effective competition.

20.3 Goods and Services above the transaction value of R 500 000 (VAT Included)

20.3.1 The NRCS must invite competitive bids for all procurement above R 500 000.


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20.3.2 Competitive bids should be advertised in at least the Government Tender Bulletin and in other

appropriate media should NRCS deem it necessary to ensure greater exposure to potential

bidders. The responsibility for advertisement costs will be that of NRCS.

20.3.3 Should it be impractical to invite competitive bids for specific procurement, e.g. in urgent or

emergency cases or in case of sole supplier, the NRCS may procure the required goods or

services by other means, such as price quotations or negotiations in accordance with

Treasury Regulation 16A.

20.3.3.1 The reasons for deviating from inviting competitive bids should be recorded and

approved by the CEO.

20.3.3.2 The NRCS is required to report within ten working days to the relevant treasury and

the Auditor-General all cases where goods and services above the value of R1

million (VAT inclusive) were procured in terms of Treasury Regulation 16A 6.4. The

report must include the description of goods or services, the name/s of the supplier/s,

the amount/s involved and the reasons for dispensing with the prescribed competitive

bidding process.

20.3.4 Goods, works or services may not deliberately be split into parts or items of lesser value

merely for the sake of procuring the goods, works or services otherwise than through the

prescribed procurement process. When determining transaction values, a requirement for

goods, works or services consisting of different parts or items must as far as possible be

treated and dealt with as a single transaction.

20.3.5 The 90/10 preference point system is applicable to bids with a Rand value above R1 million

(all applicable taxes included).

20.3.6 Refer to paragraph 21 (below) for instances where functionality is a criteria.

20.3.7 A valid Tax clearance certificate must be attached.

21. Bids based on functionality as a criterion

21.1 In general, not all bids should be invited on the basis of functionality as a criterion. The need

to invite bids on the basis of functionality as a criterion depends on the nature of the required

commodity or service taking into account quality, reliability, viability and durability of a service

and the bidders’ technical capacity to execute the contract.

21.2 For goods and services exceeding R500 000 competitive bids must be invited, unless written

approval to do otherwise is obtained and PPPFA 80/20 principle must be applied and

functionality evaluation criterion may be considered.

21.3 For goods and services exceeding R1 million and above, competitive bids must be invited,

unless written approval to do otherwise is obtained and PPPFA 90/10 principle must be

applied and functionality evaluation criterion may be considered.

21.4 Valid Tax clearance certificate must be attached.

21.5 When NRCS invites a bid that will also be evaluated on the basis of functionality as a

criterion, the NRCS must clearly specify the following aspects in the bid document

Functionality

dimensions

Details

Evaluation

criteria for

measuring

functionality

The evaluation criteria may include criteria such as the consultant’s

relevant experience for the assignment, the quality of the methodology;

the qualifications of key personnel; transfer of knowledge etc.

Weight of each

criterion

The weight that is allocated to each criterion should not be generic but

should be determined separately for each bid on a case by case basis.

Applicable The applicable values that will be utilized when scoring each criterion


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Functionality

dimensions

Details

value should be objective. As a guide, values ranging from 1 being poor, 2

being average, 3 being good; 4 being very good and 5 being excellent,

may be utilized.

Minimum

qualifying

score for

functionality

The minimum qualifying score that must be obtained for functionality in

order for a bid to be considered further should not be generic. It should

be determined separately for each bid on a case by case basis. The

minimum qualifying score must not be prescribed so low that it may

jeopardise the quality of the service required nor so high that it may be

restrictive to the extent that it jeopardizes the fairness of the SCM system

22. NRCS Suppliers

22.1 Registration of suppliers on the accounting system

22.1.1 Suppliers standing data form (AA135) must be completed for all new suppliers.

22.1.2 The minimum supporting documentation that needs to accompany the completed registration

form is:

22.1.2.1 Valid and original Tax Clearance Certificate issued by SARS.

22.1.2.2 Proof of company registration or ownership

22.1.2.3 Completed EFT form (AA138) confirming bank details and indemnifying the NRCS

from paying the supplier in the bank account provided.

22.1.2.4 Proof of existence of bank account in the exact name of the trading entity or

registered company (i.e. cancelled cheque, original deposit slip or EFT form stamped

by bank).

22.1.2.5 Valid and original B-BBEE Status Level Verification Certificate or a certified copy

thereof

22.1.2.6 Completion and submission of Standard Bidding Document 4 Declaration of Interest.

22.1.3 SCM unit must ensure that the B-BBEE Status Level of Verification Certificates submitted are

issued by the following agencies:

B-BBEE Status Agencies

Bidders other than

EMEs

Verification agencies accredited by SANAS; or

Registered auditors approved by IRBA

Bidders who qualify

as EMEs

Accounting officers as contemplated in the CCA; or

Verification agencies accredited by SANAS; or

Registered auditors. (Registered auditors do not need to meet the

prerequisite for IRBA’s approval for the purpose of conducting verification

and issuing EMEs with B-BBEE Status Level Certificates).

22.2 Establishment of supplier database

22.2.1 The SCM Manager should compile a list of prospective suppliers to be used for the

procurement requirements. This list should be used effectively to promote Black Economic

Empowerment through the participation of black owned enterprises (as defined in the

Strategy for Broad-Based Black Economic Empowerment issued by the Department of Trade

and Industry) as well as the promotion of businesses owned by other Historically

Disadvantaged Individuals (HDIs).

22.2.2 The NRCS should at least once a year, through local representative newspapers or by any

other means, invite prospective suppliers to apply for evaluation and listing as prospective

suppliers. The list should be updated on an ongoing basis in order to accommodate especially


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newly established black owned and empowered businesses and other newly established HDI

suppliers.

22.2.3 Once a list has been compiled per commodity and type of service, price quotations should be

invited there from. The invitation of price quotations from the compiled list of prospective

suppliers per commodity or service should be done on a rotation basis in such a manner that

ongoing competition amongst suppliers is promoted. Prospective suppliers must be allowed to

submit applications for listing at any time.

23. Pre SCM Process

23.1 Process preceding the SCM process

23.2 Process preceding the SCM process

23.2.1 Business units must identify the need for goods or services

23.2.2 These needs, if over R 500 000 must be included in the demand management plan for the

year.

23.2.3 All procurement needs for a financial year must also be included in the budget for the

respective business units.

23.2.4 Where a procurement request is not included in the demand management plan or the budget,

and there is a genuine need for the goods / services, the CEO / CFO / the Board may

approve such request in line with the DOA.

23.2.5 Business units must submit the following to the SCM section for the procurement process to

proceed:

23.2.5.1 Final approved business cases for all transactions with estimated costs of R30 000 or

over.

Business unit need identified

Inclusion in strategy / business plan

Estimated cost of goods / services over R500 000

Include in demand management plan (Tender process)

Inclusion on budget

Transaction R30 000 and over

Prepare business case / detailed motivation and Requisition

Yes

No RFQ Process

Prepare requisition and specifications as required

Yes

No Establish funding

requirements (with CFO)

Establish timing of procurement (with CFO)

No

Yes

Yes

No

Approval by line manager

Approval by line manager

Approval in terms of DOA

Approval ito DOA

Submit to SCM for procurement of goods / services – Proceed to

RFQ / Tender process

Yes

Yes

Yes

Yes

Reassess procurement request

No

No

No

No


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23.2.5.2 Completed and approved requisitions for all other transactions.

23.2.6 The SCM unit shall only process requests which are:

23.2.6.1 Approved by the relevant line manager.

23.2.6.2 Accompanied by sufficient supporting documents in the case of technical

specifications.

23.2.6.3 Complete.

23.2.6.4 Adequate to ensure a transparent and fair procurement process.

23.2.7 If upon assessment of the specifications / terms of reference, the SCM unit finds that they are

insufficient, the SCM unit may request business units to redo the specifications.

24. Obtaining of quotes / RFQ Process

The RFQ process is followed for all transactions under R500 000.00

24.1 Process flow for RFQ process

Request for service/ goods under R500 000 from Business Unit to SCM

Search database for suppliers

Adequate number of suppliers

Obtain quotes

Required number of quotes obtained

Evaluate quotes and Generate Purchase Requisition (PR)

PR Approved

Generate Purchase order (PO)

Issue letter of award / PO / enter contract negotiations

Yes

No Search market / engage end-user for suppliers

Update database of suppliers with additions

Yes

No Obtain approval ito DOA / Workflow

Quotes not applicable N/A

BU

Responsibility

SCM

Responsibility

Yes

Yes

No

Yes

BU

Responsibility

SCM

Responsibility


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24.2 Obtaining quotes for RFQ

24.2.1 The Procurement Officer will endeavor to obtain quotes from the list of approved suppliers.

24.2.2 If the number of currently approved suppliers is less than three, or if the number of quoting

suppliers should be extended, the procurement officer may extend the invitation to quote to

other suppliers.

24.2.3 Where an invitation to quote has been extended to a supplier which is not a vendor on the

accounting system, the procurement officer will ensure that the vendor is procedurally

engaged, approved and loaded on the accounting system.

24.2.4 Where the required number of suppliers are engaged, but the minimum number of quotes are

not obtained, the CFO and CEO shall approve for transactions lower than R500 000, and

transactions R500 000 and over, respectively, in terms of the DOA.

24.3 Quotes not required

24.3.1 Three quotes will not be required under the following circumstances:

24.3.1.1 If goods and services are sourced from a supplier in terms of a written contractual

agreement, within the contractual amounts (if applicable);

24.3.1.2 In the case of an MOU or agreement in terms of National Treasury requirements

24.3.1.3 Subscriptions and /or memberships with professional bodies;

24.3.1.4 Training where such training is not provided by the general market;

24.3.1.5 Conferences and seminars;

24.3.1.6 Repayment of travel expenditure to customers and refunds to employees;

24.3.1.7 Emergency expenses; and

24.3.1.8 Quotes are not required for statutory services for example municipal accounts etc.

24.3.2 If there are exceptional circumstances and the exception is motivated in writing and approved

in terms of the Delegation of Authority.

24.4 Issuing of Requisitions

24.4.1 Upon receiving the quotes from the suppliers, the procurement officer and/or evaluation

committee will evaluate and recommend the successful supplier on the basis of the best

balance of:

24.4.1.1 Price

24.4.1.2 Quality

24.4.1.3 BBBEE score

24.4.1.4 Delivery lead time

24.4.2 Requisitions are raised by the administrator in the business unit and approved by the

business unit manager on the accounting system. Dependent on the value, approval may be

required at higher levels in accordance with the Delegation of Authority.

24.4.3 The SCM unit shall only action requisitions that have been approved by line management in

terms of the Delegation of Authority on the accounting system.

24.4.4 Thorough documentation for emergency purchases should be prepared by line management

and approved or ratified by the relevant Executive.

24.5 Orders

24.5.1 The procurement officer will create a requisition on the accounting system which will route the

purchase requisition to appropriate manager for approval.

24.5.1.1 Quoted specifications and/or goods and services.

24.5.1.2 Actual promised delivery date.


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24.5.2 Once the approval has been actioned on the system, the requisition will be sent to the SCM

unit for conversion to an order. The purchase order will be sent through to successful

suppliers via fax or e-mail.

24.5.3 All purchase orders and supporting documentation will be filed by the SCM unit.

24.6 GRV and Payments

When goods or services are received, a GRV will be issued on the system by Finance or the Business

Unit.

After GRV, the documents are forwarded to accounts payable for payment.

25. The Bid / Tender Process

The bid / tender process is followed for all transactions above R500 000.00

25.1 Process flow for bid / tender process

Request for service/ goods above R500 000 from Business Unit to SCM

Convene Bid Specification Committee (BSC)

Prepare Bid Specifications in compliance with policy

Advertisement of Bid / Tender

Convene Bid Evaluation Committee (BEC)

Evaluate tenders and preparation of report recommending award

Submissions prepared for approval of award

Approval in terms of Delegation of Authority

Issue letter of award / enter contract negotiations

No

Yes

Business unit to re-assess submissions / specifications

Approval by Bid Adjudication Committee (BAC)

Final award recommended

Yes No

Approval / Award by Bid Adjudication Committee (BAC)

Yes

Reasons / guidance provided

No

Alternative award proposed No

Yes

Alternative award ratified by CEO


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25.2 Bid Adjudication Committee

25.2.1 The Supply Chain Management functions are overseen by a Bid Adjudication Committee of

NRCS, as established by the CEO and consists of the following:

25.2.1.1 Chief Financial Officer (chairperson)

25.2.1.2 SCM Manager

25.2.1.3 3 BU managers

25.2.1.4 Legal / contract specialist

25.2.2 The Bid Adjudication Committee will meet on an ad hoc basis where, for reasons of urgency,

adjudication and recommendation need to be made on an urgent basis. All decisions taken by

the Bid Adjudication Committee must be recorded in writing and be retained by the CFO for

record purposes.

25.2.3 The Bid Adjudication Committee will be responsible for adjudication of bids exceeding

R500 000.

25.3 User requirements and Business Case /motivations

25.3.1 The business case or motivation and the requisition must set out all the detail with regard to

the required goods or services.

25.3.2 In this regard, the end-user must draw up a motivation as to why NRCS requires the goods or

services, and an estimate of the value, costs thereof and risks if any.

25.3.3 A compiled business case/ motivation must be approved by the relevant BU head. Where the

service / goods being requested also require input / support from another business unit, the

head of that business unit / the relevant supervisor must also approve the request.

25.3.4 At this stage, the relevant BU Head must forward the request to Procurement, who will

determine the need for a Bid Specification Committee and Bid Evaluation Committee for

approval by the CFO.

25.3.5 Once the appropriate Executive has approved the business case, it must be submitted to the

Management Accounting / Budget office within the Finance Department will conduct a budget

check to ensure the availability of funds for the required acquisition.

25.3.6 In the event that funds are not available, The BU Head must consult with the CFO, prior to

finalizing the business case.

25.4 Specification of goods/works or services

25.4.1 Specifications must be written broadly enough to encourage competition. The specifications

must not be so narrow that only specific products can comply, nor may it be drafted around a

specific brand. If only a specific brand or trademark will fulfill the requirement, this factor must

be submitted with full motivations to the appropriate approval in terms of a Deviation.

25.4.2 This process must precede the invitation of bids as it constitutes a limited bid approach.

25.4.3 However specifying a particular brand is acceptable in cases where existing equipment is

involved and the item comprises a component thereof, which must be of the same brand.

25.4.4 The requirement however must be given the necessary exposure i.e. bids must be invited and

the requirement must advertised in the Government Tender Bulletin. In all cases no specific

brand names may be specified.

25.4.5 Standards and technical specifications quoted in bidding documents should promote the

broadest possible competition, while assuring that critical elements of performance or other

requirements for the goods, services and/or works being procured are achieved.

25.4.6 It is recommended that as far as possible, the institution should specify accepted standards

such as those issued by Standards South Africa (the division of the South African Bureau of

Standards), the International Standards Organization or an authority recognized by the South


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African National Accreditation System (SANAS) with which the equipment or materials or

workmanship should comply.

25.4.7 Specifications should be based on relevant characteristics and/or performance requirements.

References to brand names, catalogue numbers, or similar classifications should be avoided.

If it is necessary to quote a brand name or catalogue number of a particular manufacturer to

clarify an otherwise incomplete specification, the words "or equivalent “should be added after

such reference.

25.4.8 The specification should permit the acceptance of offers for goods which have similar

characteristics and which provide performance at least equivalent to those specified. The

quality of goods/services required should, however, not be over specified to the extent that it

will be impossible for others to offer such a product

25.5 The RFB Process

In the bid process all prospective vendors compete on the same terms and without knowledge of their

competitors’ bids. Competitiveness must be maintained throughout the process and all stages of the

process must be conducted in an open, transparent, fair, equitable and competitive manner.

This means ensuring that:

25.5.1 All vendors are given the opportunity to submit a bid on the same terms;

25.5.2 Information provided to prospective bidders is not deceptive or misleading; and

25.5.3 The conditions and protocols published in the bid request are adhered to particularly when

evaluating bids.

25.6 Planning an RFB

25.6.1 After budget approval, the end-user must consider the criteria, weightings and preference

point system against which the bidders will be evaluated. These must be inserted in the RFB.

25.6.2 After review and approval of the business case / motivations, the appropriate BU Head must

assist the end-user to draft the RFB.

25.6.3 The RFB may where necessary be submitted to the BSC for review and approval. The

appropriate BU Head must therefore let the RFB circulate amongst BSC members, and where

necessary have the BSC convened on a specific date, at which meeting the BSC members

will perform a quality review on the RFB and, if satisfied, approve the document.

25.6.4 When performing a quality review on the RFB, the BSC must consider the above-mentioned

factors, and it must ensure that the RFB comprises the following:

25.6.4.1 Clearly defined needs that gives enough information to the prospective bidders to

understand the specifications;

25.6.4.2 Criteria and weights against which all bids will be evaluated;

25.6.4.3 Criteria which are mandatory to comply with and the ones that are desirable;

25.6.4.4 A clear indication that failure to comply with mandatory requirements will be

regarded as non-responsive responses and will result in them being disqualified;

25.6.4.5 Details of the bid evaluation procedure that will be used;

25.6.4.6 RDP / Participation Goals/ Preferential procurement forms;

25.6.4.7 Special conditions (if any);

25.6.4.8 Publication information (closing date, information session, etc.);

25.6.4.9 NRCS bid template has been used; and

25.6.4.10 An RFB process needs to be planned carefully to ensure favorable outcomes.

25.6.5 Where appropriate, the following are steps that must be included:

25.6.5.1 Specifying the needs including the evaluation criteria, this will include (gathering

information from all relevant stakeholders);

25.6.5.2 Developing a project plan;


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25.6.5.3 Conducting a benchmark;

25.6.5.4 Conducting the market / supplier research to establish its competitiveness and

identify suitable sources of supply;

25.6.5.5 Determining the strategic sourcing method;

25.6.5.6 Developing a bid evaluation and adjudication plan (nomination of bid evaluation

committee);

25.6.5.7 Planning for negotiation; and

25.6.5.8 Determining the objectives to be included in the bid invitation in terms of the

PPPFA.

25.6.6 Evaluation criteria must be fair and acceptable.

25.7 Preparing the Bid Documents

25.7.1 Good planning will simplify the drafting of the RFB documentation. Bid invitation must be clear

and concise as possible and avoid imposing unnecessary cost and effort on bidders. Care

must be taken not to specify unnecessary restrictive conditions, which will cause bidders to

load their prices. A bid documentation which is well-planned will afford all vendors an

opportunity to prepare excellent proposals, which would yield a magnificent procurement

outcome.

25.7.2 The bid invitation must determine the manner in which to best obtain the goods/services. All

applicable conditions must be communicated to all vendors in writing by using NRCS

standard RFB template.

25.7.3 NRCS’ standard RFB forms have been aligned with the standard bidding documents (SBDs)

prescribed by the National Treasury in terms of SCM Circular dated 01 December 2011:

Implementation guide: Preferential Procurement Regulations, 2011 and General Conditions of

Contract (GCC). See Treasury Regulation.

25.8 Publication of Bids

25.8.1 All NRCS bids shall be advertised for a minimum of 21 calendar days before closure from the

day of publication. Unless specified to the contrary or adequately motivated for a shorter

period and approval has been granted by the CEO or his/her delegate bids can be advertised

for a shorter period. When determining the closing date of the bids sufficient time must be

allowed for prospective bidders to prepare and submit their bids. Circumstances may exist

where the preparation of the bid submission is complex, in such cases it is advisable that a

longer period is determined for the submission of bids. However this must be properly

motivated and approved by the CEO or his/her delegate.

25.8.2 All NRCS bids shall at least be advertised in the Government Tender Bulletin, on NRCS’ web

site (www.nrcs.org.za) and where applicable, in any other media deemed necessary to

ensure maximum exposure of the required goods / services.

25.9 Information Meetings or Site Inspections

25.9.1 Should the user deem it necessary to invite prospective bidders to attend an information

meeting or a site inspection, whether such a requirement is compulsory or not, then this

requirement must be advertised and be indicated in the Government Tender Bulletin, NRCS

website and any other media used to advertise the bid.

25.9.2 Particulars of the venue, date and time of the information meetings and site inspection must

be clearly indicated in the bid invitation and in the bid advertisement. Should the information

meeting or the site inspection be compulsory it must be explicitly stated in the advertisement

and the bid document that failure to attend will results in automatic disqualification of the

bidder’s responses or proposals.


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25.9.3 All vendors shall be required to sign an attendance register to confirm their attendance and

minutes shall be taken. Minutes must set out the question asked, the answers provided and

decisions made. Those minutes must be made available to all interested parties.

25.10 Communicating with Prospective Bidders

25.10.1 There should be minimal contact with prospective bidders prior to the closing date of bids. All

communications with prospective bidders must be done in consultation with the BU head. All

clarifications regarding the bid document must be provided in a consistent manner in order to

ensure that all vendors have access to the same information and no one is advantaged or

disadvantaged. Such clarification shall be in writing, and may be posted on NRCS’ website

and will be filed in the relevant bid file.

25.10.2 Any NRCS staff member who contravenes the above shall face disciplinary action.

25.11 Changing of Information

After the RFB has been advertised, but prior to the closing date and time, the relevant division may in

the event of grave mistakes and changes required in the RFB document request the CEO or his/her

delegate’s approval for the following:

25.11.1 To cancel an RFB an invite new bids;

25.11.2 To amend the bid and issue such amendments; and

25.11.3 To extend the closing date of the RFB.

25.12 Submission of Bids

25.12.1 The full and correct physical address where bids are to be lodged or the postal address of the

place where bids must be posted to must be explicitly indicated in the bid invitation document.

All bids shall be lodged at the NRCS offices situated at:

SABS Campus

1 Dr Lategan Road

Groenkloof

Pretoria

25.12.2 Failure to comply with this requirement will result in bids being treated as “late bids” and will

not be entertained. Such bids will be returned to the respective bidders.

25.12.3 No bid shall be accepted by NRCS if submitted in any manner other than as prescribed

above.

25.13 Closing Date of Bids

25.13.1 All bids shall close at NRCS’ offices at the date and time stipulated in the bid document. In the

interest of good governance, maintaining the integrity of the bidding process, as well as

maintaining the confidence of the bidders, it is critical that a cut-off time be set for submitting

bids which must be rigorously respected.

25.13.2 The bid closing date and time will be strictly monitored by SCM and the appropriate BU Head.

The bid responses will be sealed removed and locked away by SCM and the appropriate BU

Head once a closing date and time has expired. The bid responses must be kept safely until

the evaluation takes place.

25.13.3 Publication of names of bidders in respect of advertised competitive bids (above the threshold

value of R500 000 all applicable taxes included)


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25.13.4 Within ten (10) working days after the closure of any advertised competitive bid, NRCS must

publish on its website the names of all bidders that submitted bids in relation to that particular

advertisement. Where practical, NRCS must also publish the total price and the preferences

claimed by the respective bidders. The information should remain on the website for at least

thirty (30) days.

25.14 Validity Period of Bids

25.14.1 NRCS’ norm is a validity period of not more than one hundred and eighty (180) days. Any

period longer than this stipulated period must be motivated and be approved by the CEO or

his/her delegate. The appropriate Executive shall be responsible for the extension of all

validity periods of bids.

25.14.2 The period for which offers are to remain valid and binding must be indicated in the bid

document and be calculated from the closing time on the understanding that offers are to

remain in force and binding until the close of business on the last day of the period calculated.

If this day falls on a Saturday, Sunday or Public Holiday, the bids are to remain valid and

binding until the close of business on the following working day.

25.15 Opening and Screening of Bids

25.15.1 The names and designation of the NRCS staff members responsible for opening and

recording the bids must be recorded. The number of bids received shall be counted and noted

on a register that is kept for the specific bid. Details of each bidder must be entered into this

register.

25.15.2 All bid responses received shall be dated, stamped, with a time recorded, as proof that the bid

was received no later than the closing date and time. The register for the receipt of the bid

responses must be placed on the bid file for record and audit purposes. NRCS personnel

involved in this process must sign this register indicating their names and designations.

25.15.3 All bids will be screened in order to ensure that they have submitted the mandatory

documents as stipulated in the bid documentation. All bidders that fail to submit the

mandatory documents will be disqualified.

25.16 Late Bids

25.16.1 Bid responses are “late” if they are received at the address indicated in the bid document after

the closing date and time. In order to maintain the integrity of NRCS’ SCM system, it is

essential that a definitive cut-off time is set for submitting bids, and same must be strictly

observed. No late bids may be considered for evaluation. Such responses must be sent back

to the bidder with an explanation.

25.16.2 Bids received late will be kept separate and will be marked as received late with the date and

time that they were received.

25.17 Consideration of Bids

25.17.1 Clarification of Responses If required by the Bid Evaluation Committee (BEC), a clarification session may be held with all bidders

that submitted responses.

25.17.2 Cancellation and Re-invitation of Bids


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In the application of the 80/20 preference point system, if all bids received exceed R1 000 000, the bid

must be cancelled. If one or more of the acceptable bid(s) received are within the R1 000 000

threshold, all bids received must be evaluated on the 80/20 preference point system.

In the application of the 90/10 preference point system, if all bids received are equal to or below R1

000 000, the bid must be cancelled. If one or more of the acceptable bid(s) received are above the R1

000 000 threshold, all bids received must be evaluated on the 90/10 preference point system.

If a bid was cancelled in terms of the above paragraphs, the correct preference point system must be

stipulated in the bid documents of the re-invited bid.

The NRCS may, prior to the award of a bid, cancel the bid if:

Due to changed circumstances, there is no longer a need for the services, works or goods

requested. The NRCS must ensure that only goods, services or works that are required to fulfill

the needs of the institution are procured; or

Funds are no longer available to cover the total envisaged expenditure. The NRCS must ensure

that the budgetary provisions exist; or

No acceptable bids are received. If all bids are rejected, the institution must review the reasons

justifying the rejection and consider making revisions to the specific conditions of contract, design

and specifications, scope of the contract, or a combination of these, before inviting new bids.

25.18 Other matters iro Bids

25.18.1 A bidder who wishes to withdraw his / her bid before the expiry of the bid lapses and before a

letter of acceptance has been issued by NRCS, that vendor cannot be forced to execute the

contract.

25.18.2 No amendment of a bid price will be allowed during the validity period of the bid.

25.18.3 If it happens that due to unforeseen circumstances changes occur for which provision was not

made for in the bid, and subsequently bidders’ conditions change, bidders may request to

effect changes when extending the validity of their bids.

25.18.4 Bidders may not qualify any of the conditions that have been set out in the RFB with their own

conditions. A bidder’s own conditions may be rejected as being invalid, and failure by the

bidder to renounce such conditions when called upon to do so, may invalidate the bid.

Disqualification must be done by the BEC. The final decision as to disqualification lies with the

BAC.

25.19 SARS Tax Clearance Certificate

25.19.1 It is an absolute requirement that the taxes of the successful bidder are in order, or that

suitable arrangements have been made with the South African Revenue Services (SARS) to

satisfy such taxes.

25.19.2 No bid may be awarded to any bidder whose tax matters have not been declared by the

SARS to be in order. Copies of certificates, whether certified as a true copy of the original or

not, may not be accepted.

25.19.3 An original Tax Clearance certificate must be submitted at the time of the bid

25.20 Evaluation of Bids

25.20.1 The evaluation methodology to be applied in the evaluation of bids must be clearly explained

in the bid invitation. The following evaluation principles shall apply to the evaluation of all bids:

25.20.1.1 All bids that were duly lodged and have passed the screening phase must be

evaluated against the predetermined criteria, weightings, preference point


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systems and compliance with the general terms and conditions set out in the

RFB;

25.20.1.2 Documentary proof may be called for during and after the adjudication process

where doubt exists regarding any of the statements made in support of

preferences claimed;

25.20.1.3 Quality and value for money must be the prime considerations at all times, that is

total cost of ownership and life cycle costing, all decisions and reasons for these

must be recorded.

25.20.2 The appropriate Executive must ensure that the technical evaluation is not used to put

forward the supplier or product preferences of either user or evaluator, or to justify the bid

documentation specification, but purely reflects the technical merits of the bid compared to

the bid documentation.

25.21 Evaluation Phases

25.21.1 Phase 1: Mandatory Specification Evaluation This is the phase where bid responses are checked for compliance with bid mandatory

specifications/requirements i.e. technical or solution. All lodged bids that have passed the mandatory

screening phase must be evaluated to determine their compliance with technical or solution

mandatory requirements and conditions. All bids that does not comply with the technical or solution

mandatory requirements and not acceptable to the BEC should be eliminated and be disqualified for

further evaluations.

25.21.2 Phase 2: Financial Evaluation The remainder of the bids will therefore be brought to a comparative price basis deducting

preferences and adding implied contract price adjustments as well as repetitive costing (such as

maintenance). Total cost of ownership and life cycle costing are conducted at this stage.

25.21.3 Phase 3: Awarding of Points All points’ calculations must be done in accordance with the prescriptions of the PPPFA and SCM

regulations.

The PPPFA prescribes that the lowest acceptable bid will score 80 or 90 points for price. Bidders that

quoted higher prices will score lower points for price on pro-rata basis.

The formulae to be utilized in calculating points scored for price are as follows:

80/20 Preference point system (for acquisition of services, works or goods up to Rand value of R1

million including all applicable taxes)

Ps = 80 * (1 – (Comparative price of bid under consideration – Comparative price of lowest

acceptable bid or offer) / Comparative price of lowest acceptable bid or offer)

90/10 Preference point system (for acquisition of services, works or goods with a Rand value above

R1 million including all applicable taxes)

Ps = 90 * (1 – (Comparative price of bid under consideration – Comparative price of lowest

acceptable bid or offer) / Comparative price of lowest acceptable bid or offer)


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Points scored must be rounded off to the nearest 2 decimal places.

25.21.4 Phase 4: Calculation of points for B-BBEE status level of contributor

Points must be awarded to a bidder for attaining the B-BBEE status level of contribution in

accordance with the table below:

B-BBEE Status Level of

Contributor

Number of points

(90/10 system)

Number of points

(80/20 system)

1 10 20

2 9 18

3 8 16

4 5 12

5 4 8

6 3 6

7 2 4

8 1 2

Non-compliant contributor 0 0

A bid must not be disqualified from the bidding process if the bidder does not submit a certificate

substantiating the B-BBEE status level of contribution or is a non-compliant contributor. Such a bidder

will score zero (0) out of a maximum of 10 or 20 points respectively for B-BBEE.

25.21.5 Phase 5: Company Profile

Bidders must be requested to provide their company profiles with the bids. The information provided

cannot be used for point’s evaluation processes but to assess and confirm the companies’ status. The

following information must be contained in their profiles:

Mandatory

information

Details

Company Information Date established, names of directors and affiliate to groups

Bidder Operating

Organisation

Provide an overview of the operating structure and geographical locations of

the firm at the national, regional, and local levels

Standards Include information regarding your firm’s utilisation of widely known Industry

standards and guidelines, as they apply to your firm, your firm’s Bid and

proposed solution

Company Contact(s)

details

Provide the name, title, street address, city, province, telephone and fax

numbers and e-mail of the primary company’s contact person, and for any

Sub-Contractors

Corporate Financial

Status

Audited financial statements from the most recent fiscal year

List of all personnel

(when applicable)

List of all personnel to be assigned to the project by the supplier identifying

their qualifications to perform tasks/functions

25.21.6 Phase 6: Approval of Bids

After the BEC has evaluated the bids against the predetermined criteria, it will approve the preferred

bidder. The approval will be contained in a report, which sets out the following:


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a. The decision required; such as the name and price of the recommended bidder;

b. Bid background / information such as date of advert, media in which the bid was advertised;

c. All the bid responses that were received;

d. Those that were disqualified, both at the screening and the evaluation phase together with the

reasons why (including those that were late);

e. The responses that were evaluated;

f. Evaluation criteria and weightings, and each bidder’s scores against it; and

g. The recommended or the preferred bidder and a motivation for it.

A contract must be awarded to the bidder who scored the highest total number of points in terms of

the preference point systems.

In exceptional circumstances a contract may, on reasonable and justifiable grounds, be awarded to a

bidder that did not score the highest number of points. The reasons for such a decision must be

approved and recorded for audit purposes and must be defendable in a court of law.

25.22 Evaluation of bids that scored equal points

25.22.1 In the event that two or more bidders have scored equal total points, the successful bid must

be the one that scored the highest number of points for B-BBEE.

25.22.2 If two or more bids have equal points, including equal preference points for B-BBEE, the

successful bid must be the one scoring the highest score for functionality, if functionality is

part of the evaluation process.

25.22.3 In the event that two or more bids are equal in all respects, the ward must be decided by the

drawing of lots.

25.23 Notification and Debriefing

25.23.1 After all bid responses have been evaluated and final approval for the award of a bid has

been granted, the SCM unit must ensure that a letter of appointment is written to the

successful bidder. The letter of appointment to the successful bidder does not constitute a

contract between the successful bidder and NRCS. A binding contract will only be in place

once the contract forms (SBD 7) or SLA has been signed by NRCS and the successful

bidder. Unsuccessful bidders should be notified separately.

25.24 Contract Negotiation and signing

25.24.1 After negotiation, the agreed terms and conditions for the supply of the goods or services

must be included in a formal SLA and be signed by both parties. The written contract must be

an accurate reflection of the terms and conditions of the RFB, and must take account of any

matters of significance emanating from the post-evaluation negotiation process. It is important

that consultation takes place with NRCS’ legal advisors where necessary during this process.

25.24.2 The power to sign a contract on behalf of NRCS rests with the CFO and CEO.

25.24.3 Two original contracts must be signed. One original must be kept by the supplier, and the

other must be kept by SCM and Legal Office.

26. Records

The Procurement Department will retain records of purchase orders for a period of five years. Audit

reports of checks on these records will also be filed and kept for a period of five years by Internal

Audit.

NRCS CSP 503-04

27. ANNEXURE A : SCM DELEGATION OF AUTHORITY No Description

Power, Duty / Function Executive Authority

Board / Board Committee

CEO CFO A B Other PFMA / Treasury Regulation

Remarks / Qualification

27.1 Bids over R500 000.00

27.1.1 Determination of a non-refundable deposit for Bid documents

27.1.2 Extension of closing period for Bid In consultation with CFO and SCM Manager

27.1.3 Shortening of closing of bids BAC

27.1.4 Appointment of Bid Specification Committee members

27.1.5 Appointment of Bid Evaluation Committee members

27.1.6 Appointment of Bid Adjudication Committee members

27.1.7 Approve variations,, extensions to Contract

27.1.7.1 Within the 15% limit of Treasury – of original transaction value

BAC / CFO / SCM to recommend – CEO to approve

27.1.7.2 Over the 15% limit of Treasury – of original transaction value

On recommendation from BAC / CFO and SCM

27.1.8 Approve cancellation of Contract On recommendation of BAC, Reported within 10 days to NT and AG

27.1.9 Awarding a tender

27.1.9.1 Final award of a tender as recommended by BEC

BAC

27.1.9.2 Recommendations in event where no final tender award

BAC

27.1.9.3 Final award of a tender not in line with recommended by BEC

CEO to approve on recommendation from BAC

27.1.10 Disqualification of bidders based on specified criteria

BAC

27.1.11 Advertising a tender BAC

27.2 Bids Under R500 000.00

27.2.1 Approval to obtain quotes from suppliers outside the NRCS supplier database

SCM Manager

27.2.2 Extension of closing period for Bid SCM Manager in consultation with CFO

27.2.3 Approve cancellation of Contract SCM Manager in consultation with CFO


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No Description Power, Duty / Function

Executive Authority




27.2.4 Approve variations to Contract / PO

27.2.4.1 Within the 15% limit of Treasury – of original transaction value

On recommendation from CFO and SCM

27.2.4.2 Over the 15% limit of Treasury – of original transaction value

On recommendation from CFO and SCM, Reported within 10 days to NT and AG

27.3 Other SCM Issues

27.3.1 Appointment of Disposal Committee

members

27.3.2 Approval to deviate from normal

procurement procedures.

Reasons must be recorded and approved

27.3.2.1 Transaction values R 10 000 and less Reasons must be recorded and approved

27.3.2.2 Transaction values over R 10 000 Reasons must be recorded and approved

27.3.3 Ex- post facto procurement approval Reasons must be recorded and approved

27.3.4 Approval of transactions where the minimum number of quotations (at least 3) were not obtained


27.3.5 Bids where the lowest bidder was not selected


27.4 Demand Management plan

27.4.1 Preparation and submission of the Demand management plan

27.4.2 Approval of demand plan

27.4.3 Approval of procurement not on demand plan (Over R500 000)

27.5 Issuing bids

27.5.1 Open bids SCM Manager in consultation with BAC

27.5.2 Closed bids BAC to inform CEO

27.6 Approval of bid awards

27.6.1 Up to R500 000.00

27.6.2 Between R500 000.00 and R2 000 000.00

On recommendation from BAC

27.6.3 R2 000 000.00 and over On recommendation from BAC and


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No Description Power, Duty / Function

Executive Authority




CEO

27.7 Sign / release official company orders on goods / services procured

SCM Manager Releases informed by procurement processes per the SCM policy.

27.8 Contracts

27.8.1 Sign contracts up to R500 000.00

27.8.2 Sign contracts R500 000.00 and over

27.8.3 Approval to negotiate a contract To be done in conjunction with Legal

27.9 Approval of payments: All categories of operational expenditure

Authorisation of purchase requests (approved within the budget) for own cost center

27.9.1 Less than R10 000.00 Managers and Senior Managers

27.9.2 Less than R20 000.00 General Managers

27.9.3 Less than R50 000.00 Executives / Business Unit Heads

27.9.4 Less than R500 000.00 Approval across cost centers

27.9.5 Less than R2 000 000.00 Approval across cost centers

27.9.6 R2 000 000.00 and over Approval across cost centers

27.10 Approval of payments: Capital expenditure

Authorisation of purchase requests (approved within the budget) for own cost center

27.10.1 Less than R20 000.00 General Managers

27.10.2 Less than R50 000.00 Executives / Business Unit Heads CEO to be notified

27.10.3 Less than R500 000.00 Approval across cost centers CEO to be notified

27.10.4 Less than R2 000 000.00 Approval across cost centers Board to be notified

27.10.5 R2 000 000.00 and over Approval across cost centers On recommendation from CEO