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MFMA SCM-PPOS Learning material

MFMA SCM-PPOS Learning material. Your partner in world-class business learning. Date: 2013. MFMA SCM PPOS = NDP, 2013-2030. Fix the engine room to get SA growing says Manuel” – Business Day, 12 March 2013

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MFMA SCM-PPOS Learning material

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  1. MFMA SCM-PPOS Learning material Your partner in world-class business learning Date: 2013

  2. MFMA SCM PPOS = NDP, 2013-2030 • Fix the engine room to get SA growing says Manuel” – Business Day, 12 March 2013 • It is the contestation of Minister T Manuel, Minister in the Presidency, that the implementation of the National Development Plan [NDP] depends on fixing the machinery of the state, so that it delivers efficiently. He is of the opinion that economic development in a developmental State cannot be achieved if the ‘engine room’ does not work. • He also states that the search for quick fixes has diverted attention from more fundamental priorities and this create instability in organisational structures and policy approaches that further strain limited capacity • The approach of the Treasury is to assist in fixing the Engine Room by providing practical tools related to a sound SCM System which is fair, equitable, transparent, competitive and cost-effective whilst at the same time ensuring BBBEE

  3. MFMA SCM PPOS – MFMA ENGINE ROOM

  4. MFMA SCM PPOS – MFMA ENGINE ROOM

  5. FMIP III ENGINE ROOM CRITERIA PER KEY ACTIVITY & FINANCIAL DISCIPLINE KRA 1 - INSTITUTIONAL REGULATORY PLATFORM PFM DASHBOARD KRA 2 - ORGANISATIONAL KNOWLEDGE PLATFORM KRA 3 - INDIVIDUAL PFM CD PLATFORM KRA 4 -STAKEHOLDER STAKEHOLDER PLATFORM

  6. FINANCIAL DISCIPLINE READINESS 2=50% - INADEQUATE Presentationby FMIP III team

  7. MFMA SCM PPOS – SCM ENGINE ROOM MUNICIPAL SCM SYSTEM MAP [NOTE that public sector SCM provides for 3 systems – (1)goods and services, (2)infrastructure, (3)immovable property DEMAND MANAGEMENT Needs analysis (inclusive of Annual Procurement Plan) Funding Specifications/ToR Database of suppliers Strategic sourcing INSTITUTIONALISATION SCM System (Legislative environment inclusive of Preferential Procurement) Planning SCM Function, Unit and Capacity Building Delegations Roles and responsibilities SCM Governance: • Ethics • SCM abuse system • Complaints, disputes, enquiries and objections mechanism • SCM related appeals • Compliance • Access to Information Committee System: • Specification Committee • Evaluation Committee • Adjudication Committee • IDMS (Infrastructure Development Management System) Committees • Disposal Committee • SCM abuse, complaints, M&E Committee • Secretariat service • Resolution of committee disagreements LOGISTICS MANAGEMENT Inventory management: • Requisition • Placing orders • Receiving goods • Returning goods • Goods distribution • Warehouse management • Matching documentation • Preparation for payment/Accounts payable Inventory stock count, verification &reconciliation (including ICN mgt) and treatment of discrepancies DISPOSAL MANAGEMENT Inventory disposalPreparation Process Control of documentation Immovable Asset disposalAdvertisementApplication Approval Negotiation ACQUISITION MANAGEMENT Acquisition Management System • Compilation of bid documents • Receipt and opening of bids • Evaluation and adjudication of bids Acquisition process: • Petty cash • Verbal Quotes • Written Quotes • Competitive bidding • Limited bidding • Transversal bids • Direct negotiation • Consultants • IT • Banking • Safety arrangements • Procurement abroad • Organs of state • Roster • List of selected suppliers • Emergency • Urgent procurement • Unsolicited bids • Sponsorships Risk and Performance Management • Risk management • Guarantees • SCM performance review • Supplier performance • Reporting of SCM information • Optimal system utilisation • Safeguarding of SCM information MOVABLE/IMMOVABLE ASSET MANAGEMENT [Inclusive of biological assets/infrastructure assets]ResponsibilitiesPlanningCapital projects Internal controls MATR Land Disposal Policy Contract negotiation, administration, management and contract related risk management

  8. MFMA SCM PPOS – HOW TO USE SCM PPOS AND GUIDE Both documents are divided in Modules • Module 1 – General • Module 2 – Institutionalisation • Module 3 – Demand Management • Module 4 – Acquisition Management • Module 5 – Contract Management • Module 6 – Logistics Management • Module 7 – Immovable Asset Management • Module 8 – Disposal Management • Module 9 – Risk and Performance Management SCM PPOS consist of Parts which provide the details as per index Each Part consists of: • Prescript • Policy – which is focus area of Council • Principles – which is focus area of the institution and its management • Operational – which is the focus area of the SCM user and practitioners Each Module provides for case studies and/or assignments for management and users and practitioners. Councillors only have one case study.

  9. MFMA SCM PPOS – MODULE 1 INSTITUTIONALISATION SCM System (Legislative environment inclusive of Preferential Procurement) Planning SCM Function, Unit and Capacity Building Delegations Roles and responsibilities SCM Governance: • Ethics • SCM abuse system • Complaints, disputes, enquiries and objections mechanism • SCM related appeals • Compliance • Access to Information Committee System: • Specification Committee • Evaluation Committee • Adjudication Committee • IDMS (Infrastructure Development Management System) Committees • Disposal Committee • SCM abuse, complaints, M&E Committee • Secretariat service • Resolution of committee disagreements • Country ruled by LAW • 58 pieces of legislation governing SCM • Objective: To ensure effective, efficient and uniform SCM practices, whilst at the same time promoting BBBEE and SMME’s • SCM system includes demand mgt, acquisition mgt, logistics mgt, disposal mgt, risk mgt and performance mgt • AO must have an operational SCM Unit under the direct supervision of the CFO • Delegations within a specific framework • Advisors may not make decisions • SCM Principles

  10. MFMA SCM PPOS – MODULE 1 INSTITUTIONALISATION SCM System (Legislative environment inclusive of Preferential Procurement) Planning SCM Function, Unit and Capacity Building Delegations Roles and responsibilities SCM Governance: • Ethics • SCM abuse system • Complaints, disputes, enquiries and objections mechanism • SCM related appeals • Compliance • Access to Information Committee System: • Specification Committee • Evaluation Committee • Adjudication Committee • IDMS (Infrastructure Development Management System) Committees • Disposal Committee • SCM abuse, complaints, M&E Committee • Secretariat service • Resolution of committee disagreements • MFMA • SCM TR + MATR • CIDBA • PPPFA • BBBEE • COMPETITION ACT • CORRUPT ACTIVITIES ACT • PAJA • PAIA • DELEGATIONS

  11. MFMA SCM PPOS – MODULE 1 INSTITUTIONALISATION SCM System (Legislative environment inclusive of Preferential Procurement) Planning SCM Function, Unit and Capacity Building Delegations Roles and responsibilities SCM Governance: • Ethics • SCM abuse system • Complaints, disputes, enquiries and objections mechanism • SCM related appeals • Compliance • Access to Information Committee System: • Specification Committee • Evaluation Committee • Adjudication Committee • IDMS (Infrastructure Development Management System) Committees • Disposal Committee • SCM abuse, complaints, M&E Committee • Secretariat service • Resolution of committee disagreements CASE STUDY: • What are the five pillars of SCM to ensure it complies with the Constitution, section 217? • Why do you need to adhere to the legal prescripts? • What is the specific legislation applicable to your area of responsibility? • What are the specific elements you as a manager want to see in the municipal SCMP2OS?

  12. MODULE 2- INSTITUTIONALISATION INSTITUTIONALISATION SCM System (Legislative environment inclusive of Preferential Procurement) Planning SCM Function, Unit and Capacity Building Delegations Roles and responsibilities SCM Governance: • Ethics • SCM abuse system • Complaints, disputes, enquiries and objections mechanism • SCM related appeals • Compliance • Access to Information Committee System: • Specification Committee • Evaluation Committee • Adjudication Committee • IDMS (Infrastructure Development Management System) Committees • Disposal Committee • SCM abuse, complaints, M&E Committee • Secretariat service • Resolution of committee disagreements • AO must have an operational SCM Unit under the direct supervision of the CFO • Application of preference system • Delegations within a specific framework • Advisors may not make decisions • Roles and responsibilities of: • Council, AO and CFO • Bid Spec Committee (roles, establishment and composition) • Bid Evaluation Committee (roles, establishment and composition) • Bid Adjudication Committee (roles, establishment and composition) • Ethics – Code of Conduct, declaration of interest, fraud and corruption and fronting, SCM abuse, complaints and disputes, access to information • Committee System

  13. How Do I Apply My Mind? • TEST: (tick-off) • All relevant and permissible facts and circumstances were taken into consideration. • All prescripts, limits and conditions are adhered to. • Ensure decision is within ambit of delegation. • Ensure result of action/decision will serve a legal permissible purpose. • Ensure result falls within ambit of budget, budget description and objectives of strategic plan.

  14. BID SPECIFICATION COMMITTEE BID ADJUDICATION COMMITTEE BID EVALUATION COMMITTEE SECRETARIAT FUNCTION Purpose: Make final recommendation Purpose: Determine Specs/ToR Purpose: Maintain portfolio of evidence for bid processes Purpose: Evaluate bids received • Line function identify need • Line function & SCMU prepare specifications and bid documents • SCMU facilitate and approve BSC members • Line function maintain minutes • BSC: • Approve Bid documentation • Approve Specifications • Consider special conditions • Approve evaluation criteria and weights • Consider risks • Consider contract requirements • Delegated Authority considers minutes and signs-off on bid documentation • SCMU advertise bid • Line Function hold briefing/site meeting (optional) • SCMU receive and stamp bids • SCMU prepare bids for evaluation • SCMU validate declarations and claims • SCMU facilitate and approve BEC members • SCMU/Line function maintain minutes of BEC meetings • BEC: • Evaluate bids as per evaluation criteria and weights • Consider additional objective criteria • Verify validity of claims/declarations • Consider potential risks and make recommendations for mitigation • Consider contractual issues • Consider presentations (if part of procurement process) • SCMU facilitate request for further information • BEC review recommendation if so requested by BAC or AO/delegated authority • SCMU facilitate and AO approve BAC members • SCMU maintain minutes of BAC meetings • SCMU submit minutes and BEC resolution to BAC for adjudication • BAC: • Consider recommendations from BEC • Consider additional objective criteria • Consider potential risks and make recommendations for mitigation • Consider contractual issues • Consider validity of procurement process • Other matters by BAC: • Consider extension/ expansion/ variation of contracts • Consider unsolicited bids • Consider limited bid applications • SCMU facilitate request for further information • SCMU submit minutes and resolution to AO/delegated authority for final award • BAC review recommendation if so requested by AO/delegated authority • Compile agenda • Issue notice of meeting • Prepare meeting documentation • Execute administrative and logistic functions for committee • Maintain expenditure register for committee • Maintain attendance register • Maintain declaration register • Maintain record of meeting (minutes and voice recording – if required) • Prepare and maintain ‘briefing sessions’ and/or ‘presentation sessions’ documentation - if part of procurement process • Maintain register of access to information • Secure all bid documents • Facilitate documentation flow between committees and relevant delegated authorities • Maintain portfolio of evidence file per bid MODULE 2- INSTITUTIONALISATION

  15. MODULE 2- PAIA Information access Informing the unsuccessful bidders Disclosure of information Publishing of award Refer to section 42 of PAIA – commercial information

  16. MODULE 2- INSTITUTIONALISATION INSTITUTIONALISATION SCM System (Legislative environment inclusive of Preferential Procurement) Planning SCM Function, Unit and Capacity Building Delegations Roles and responsibilities SCM Governance: • Ethics • SCM abuse system • Complaints, disputes, enquiries and objections mechanism • SCM related appeals • Compliance • Access to Information Committee System: • Specification Committee • Evaluation Committee • Adjudication Committee • IDMS (Infrastructure Development Management System) Committees • Disposal Committee • SCM abuse, complaints, M&E Committee • Secretariat service • Resolution of committee disagreements • CASE STUDY: • May a member of the Bid Evaluation Committee, be a member of the Bid Adjudication Committee? • What are you to do if a Councilor wishes to discuss or participate in a tender? • May you accept gifts and if so, where do you declare gifts? • What do you do if the Municipal Manager decides to award the bid to another bidder, irrespective that the Bid Adjudication Committee recommended another bidder? • What is different with a construction/infrastructure tender?

  17. MODULE 3– DEMAND MANAGEMENT DEMAND MANAGEMENT Needs analysis (inclusive of Annual Procurement Plan) Funding Specifications/ToR Database of suppliers Strategic sourcing SDBIP ALIGNED TO SCM = STRATEGIC SOURCING • System of Demand Management • Establishment of a cross-functional team • SDBIP • Annual performance planning process • Assessment of current and future needs • Assessment of available assets • Analysis of past expenditure • Analysis of supplying industry • Sourcing strategy • Annual operational plan • Business plan for Procurement

  18. MODULE 3 – DEMAND MANAGEMENT DEMAND MANAGEMENT Needs analysis (inclusive of Annual Procurement Plan) Funding Specifications/ToR Database of suppliers Strategic sourcing • Establishment of the list of prospective providers per commodity • Establishment details • Application details • Evaluation and approval • Updating of list • ************Utilisation procedure ******** • Removal from the prospective provider list

  19. MODULE 3– DEMAND MANAGEMENT DEMAND MANAGEMENT Needs analysis (inclusive of Annual Procurement Plan) Funding Specifications/ToR Database of suppliers Strategic sourcing Specification for goods ToR for services • Needs analysis • Scoping through a request for information (RFI) • Determining specifications/Terms of Reference • Compilation of specifications/Terms of Reference • Specification/Terms of Reference guidelines • Planning for Publication 39 points to consider in specs Remember: Tolerances/ Thresholds

  20. MODULE 3 – DEMAND MANAGEMENT DEMAND MANAGEMENT Needs analysis (inclusive of Annual Procurement Plan) Funding Specifications/ToR Database of suppliers Strategic sourcing • ASSIGNMENT • Prepare a Bid Specification/Terms of Reference in your area of responsibility as per Annexure A • Complete the bid project plan as per Annexure B

  21. MODULE 4– ACQUISITION MANAGEMENT ACQUISITION MANAGEMENT Acquisition Management System • Compilation of bid documents • Receipt and opening of bids • Evaluation and adjudication of bids Acquisition process: • Petty cash • Verbal Quotes • Written Quotes • Competitive bidding • Limited bidding • Transversal bids • Direct negotiation • Consultants • IT • Banking • Safety arrangements • Procurement abroad • Organs of state • Roster • List of selected suppliers • Emergency • Urgent procurement • Unsolicited bids • Sponsorships • Hierarchy of satisfying requirements: • STEP 1 – Internal resources • STEP 2 – Pre-established sources, e.g. • Pre-established municipal contracts • Redundant or obsolete items • Other government institutions • Contracts arranged by other organs of state • STEP 3 – Special conditions: E-commerce, PPP, CIDBA and Consultants • STEP 4 – Term contracts • STEP 5 – Other procurement within thresholds, e.g.: • Petty cash = R 200 • Verbal quotes = R 2 000 • Written quotes = R 30 000 • Formal written quotes = R 30 000 – R 200 000 • Open or limited bidding = R 200 000 and more

  22. MODULE 4– ACQUISITION MANAGEMENT • Competitive bidding: • Two-stage bidding • Pre-qualifying bidders • Rotation basis of pre-approved bidders • Limited (deviations) bidding: • No appropriate bids received through open bidding process • Exceptionally advantageous conditions • Change of provider would result in incompatible equipment • Specified designer • No reasonable alternative or substitute exist • Legal or technological or safety reasons • Urgency • Emergency • Provision of legal advice ACQUISITION MANAGEMENT Acquisition Management System • Compilation of bid documents • Receipt and opening of bids • Evaluation and adjudication of bids Acquisition process: • Petty cash • Verbal Quotes • Written Quotes • Competitive bidding • Limited bidding • Transversal bids • Direct negotiation • Consultants • IT • Banking • Safety arrangements • Procurement abroad • Organs of state • Roster • List of selected suppliers • Emergency • Urgent procurement • Unsolicited bids • Sponsorships NOTE: reasons for limited bidding must be recorded and approved

  23. MODULE 4 – ACQUISITION MANAGEMENT ACQUISITION MANAGEMENT Acquisition Management System • Compilation of bid documents • Receipt and opening of bids • Evaluation and adjudication of bids Acquisition process: • Petty cash • Verbal Quotes • Written Quotes • Competitive bidding • Limited bidding • Transversal bids • Direct negotiation • Consultants • IT • Banking • Safety arrangements • Procurement abroad • Organs of state • Roster • List of selected suppliers • Emergency • Urgent procurement • Unsolicited bids • Sponsorships • Language of Quotation/Bid documents • Calling for Bids • Advertising of Bids • Closing time of Bids • Determining the closing period • Determining the validity period • Availability of Bid documents • Sale of Bid documents • Responses received • Elements for inclusion in Bid documents • SCM Unit responsibility • User division responsibility • Quotation/bid documentation pack • Standard bid documentation • Elements to take into account when compiling pack • Pre-bid information meetings • Particulars of information sessions • Particulars of presentation meetings • Changing information before closing time • Postponement of closing date

  24. MODULE 4 – ACQUISITION MANAGEMENT ACQUISITION MANAGEMENT Acquisition Management System • Compilation of bid documents • Receipt and opening of bids • Evaluation and adjudication of bids Acquisition process: • Petty cash • Verbal Quotes • Written Quotes • Competitive bidding • Limited bidding • Transversal bids • Direct negotiation • Consultants • IT • Banking • Safety arrangements • Procurement abroad • Organs of state • Roster • List of selected suppliers • Emergency • Urgent procurement • Unsolicited bids • Sponsorships • Procedures for quotations up to R 2 000 • Receiving and opening procedure for quotations up to R30 000 • Receiving and opening procedure for Bids above R30 000 • Admission of bids • Confidentiality • Bids received late • Dealing with unsolicited Bids • Reason for rejection • Compliance check procedures • Signing of Bids • Authority to sign bid documents • Tax Clearance Certificates • Submission and signing of declaration or certificate • Declaration of interest • Providers own conditions • Evaluation from R30 000 and up to R200 000 • Bid evaluation committee for procurement above R200 000 • Format of the recommendation report • Information that must be supplied Non responsive tenders – See notes on Municipal taxes and Tax clearance certificates

  25. MODULE 4 – ACQUISITION MANAGEMENT ACQUISITION MANAGEMENT Acquisition Management System • Compilation of bid documents • Receipt and opening of bids • Evaluation and adjudication of bids Acquisition process: • Petty cash • Verbal Quotes • Written Quotes • Competitive bidding • Limited bidding • Transversal bids • Direct negotiation • Consultants • IT • Banking • Safety arrangements • Procurement abroad • Organs of state • Roster • List of selected suppliers • Emergency • Urgent procurement • Unsolicited bids • Sponsorships • Consideration of additional information • Cancellation of Quotation Bids • Discussion with bidders • Verifying Preferences • Amendment of prices prior to lapse of validity • Extension of validity period • New and unproven products • Country of origin • Deviations from specifications • Alternative offers • Improvement on specifications • Equal offers • Additional Quantities • Samples • Comparison of Quoted prices • Comparative prices: Bids for contracts of more than three years • Confidentiality • Subcontracting and joint ventures • Clearance of providers prior to the award of a contract

  26. MODULE 4 – ACQUISITION MANAGEMENT ACQUISITION MANAGEMENT Acquisition Management System • Compilation of bid documents • Receipt and opening of bids • Evaluation and adjudication of bids Acquisition process: • Petty cash • Verbal Quotes • Written Quotes • Competitive bidding • Limited bidding • Transversal bids • Direct negotiation • Consultants • IT • Banking • Safety arrangements • Procurement abroad • Organs of state • Roster • List of selected suppliers • Emergency • Urgent procurement • Unsolicited bids • Sponsorships • Award structures • Powers of Award structure up to R200 000 – delegated authority • Powers of Award structure above R200 000 • Evaluation and Adjudication Committees • Accounting Officer (MFMA section 114) Refer to templates for committee minutes and resolutions + meeting procedures

  27. MODULE 4 – ACQUISITION MANAGEMENT ACQUISITION MANAGEMENT Acquisition Management System • Compilation of bid documents • Receipt and opening of bids • Evaluation and adjudication of bids Acquisition process: • Petty cash • Verbal Quotes • Written Quotes • Competitive bidding • Limited bidding • Transversal bids • Direct negotiation • Consultants • IT • Banking • Safety arrangements • Procurement abroad • Organs of state • Roster • List of selected suppliers • Emergency • Urgent procurement • Unsolicited bids • Sponsorships Disagreements • Where the Bid Adjudication Committee finds that the recommendation is not correct or not in the municipality’s best interest, the reasons for not supporting the review is: • Firstly returned to the Bid Evaluation Committee for reconsideration, then • Submitted to the Accounting Officer for final award. • In the event that the Accounting Officer makes an alternative decision than the recommendation submitted by the Bid Adjudication Committee after returning the matter back to the Bid Adjudication Committee for reconsideration, the provisions of section 114 of the MFMA and SCM TR 29 will apply.

  28. MODULE 4 – ACQUISITION MANAGEMENT ACQUISITION MANAGEMENT Acquisition Management System • Compilation of bid documents • Receipt and opening of bids • Evaluation and adjudication of bids Acquisition process: • Petty cash • Verbal Quotes • Written Quotes • Competitive bidding • Limited bidding • Transversal bids • Direct negotiation • Consultants • IT • Banking • Safety arrangements • Procurement abroad • Organs of state • Roster • List of selected suppliers • Emergency • Urgent procurement • Unsolicited bids • Sponsorships ACCEPTANCE • The SCM Unit must finalise the adjudication by issuing the letter of intention to award o preferred bidder. • 14 day period to lodge complaint. • SCM TR 24 negotiations • Issue letter of acceptance • The acceptance of a successful bid must be in writing and must be sent by registered/certified mail or as indicated in a special condition, the principle being that there must be a mechanism of proof of delivery. • The official with the necessary delegated authority to commit the municipality, must be satisfied that all the necessary contractual conditions have been included prior to signing. • The municipality’s contract documents shall promote uniformity across the entity. • Both parties to the contract shall sign the contract form or formal contract. • Legal copies shall be kept in a safe place for judicial reference.

  29. MODULE 4 – ACQUISITION MANAGEMENT ACQUISITION MANAGEMENT Acquisition Management System • Compilation of bid documents • Receipt and opening of bids • Evaluation and adjudication of bids Acquisition process: • Petty cash • Verbal Quotes • Written Quotes • Competitive bidding • Limited bidding • Transversal bids • Direct negotiation • Consultants • IT • Banking • Safety arrangements • Procurement abroad • Organs of state • Roster • List of selected suppliers • Emergency • Urgent procurement • Unsolicited bids • Sponsorships Refer SCM TR 21(e) & 50 OBJECTION This process does not constitute an APPEAL and the provisions of SCM TR 50 must be adhered to in order to respond to objections or complaints received in this regard. Bidders are allowed the opportunity to lodge an objection or complaint against the decisions of the municipality within a period of 14 (working) days of the municipal decision or action. An independent and impartial person deal with objection or complaint

  30. MODULE 4 – ACQUISITION MANAGEMENT ACQUISITION MANAGEMENT Acquisition Management System • Compilation of bid documents • Receipt and opening of bids • Evaluation and adjudication of bids Acquisition process: • Petty cash • Verbal Quotes • Written Quotes • Competitive bidding • Limited bidding • Transversal bids • Direct negotiation • Consultants • IT • Banking • Safety arrangements • Procurement abroad • Organs of state • Roster • List of selected suppliers • Emergency • Urgent procurement • Unsolicited bids • Sponsorships Appeal process • Bidders are allowed to appeal against a decision or action of the municipality, but only after exhausting the provisions of SCM TR 21(e) and 50 – MSA section 62 • In strict legal terms the nature of an appeal has a specific meaning in relation to administrative actions. • The Accounting Officer will not have to defend the merits of any discretionary decisions taken, but will have to confirm that: • Due process was followed in awarding the tender, i.e. all relevant legal prescripts were complied with; and • The discretionary decision made to award the tender was reached having followed such due process. • If an application for appeal is upheld, the only sanction could be that the tender evaluation and/or adjudication process must be re-constituted following due process. • Since the Accounting Officer and members of the Adjudication Committee are involved in the final decision making they cannot be an Appeal Authority. • NOTE: Appeals may thus only be considered through a court of law process or as per SCM TR 50(1).

  31. MODULE 4 – ACQUISITION MANAGEMENT ACQUISITION MANAGEMENT Acquisition Management System • Compilation of bid documents • Receipt and opening of bids • Evaluation and adjudication of bids Acquisition process: • Petty cash • Verbal Quotes • Written Quotes • Competitive bidding • Limited bidding • Transversal bids • Direct negotiation • Consultants • IT • Banking • Safety arrangements • Procurement abroad • Organs of state • Roster • List of selected suppliers • Emergency • Urgent procurement • Unsolicited bids • Sponsorships • ASSIGNMENT • Evaluate the template provided in Annexure C and indicate whether it serves as a good management tool to evaluate bids received with substantiating reasons. • May a bid be disqualified due to the fact that the bidder did not submit sufficient proof that its Municipal accounts are up to date or did not submit a valid tax clearance certificate?

  32. MFMA SCM PPOS – CONTRACT MANAGEMENT • ESSENTIALIA Contract negotiation, administration, management and contract related risk management • Refer to different types for: • SLA • GCC • Consortium Agreement • Sale of Land Agreement • Services Agreement • Service Delivery Agreement • Parties • Duration • Cost • Deliverables • Termination

  33. MFMA SCM PPOS – CONTRACT MANAGEMENT Contract negotiation, administration, management and contract related risk management MFMA CIRCULAR 62/2012 • General Responsibility • Managing the contract • Correction of an incorrect acceptance • Placing orders • Placing orders near the end of the contract period • Contract monitoring • Non-contractual purchases • Payments • Over/under deliveries • Discount on invoices • Insolvency, Liquidation, death, sequestration or judicial management of contractors • Transfer of cession of contracts • Transfer of contract payments • Contract variations/amendments • Unsatisfactory performance • Mechanism for SCM System Abuse • Restriction • Contract termination

  34. MFMA SCM PPOS – CONTRACT MANAGEMENT • CASE STUDY • USER • What are your responsibilities as a USER to ensure a contract is properly managed (list the items you will be in charge of)? • PRACTITIONER • What are your responsibilities as a PRACTITIONER to ensure a contract is properly administered (list the items you will be in charge of)? • SENIOR MANAGER • What are your responsibilities as a manager to ensure a contract is properly managed (list the items you will be in charge of)?

  35. MFMA SCM PPOS – CONTRACT MANAGEMENT CONTRACT ADMIN CONTRACT MANAGER

  36. MFMA SCM PPOS – LOGSITICS MANAGEMENT LOGISTICS MANAGEMENT Inventory management: • Requisition • Placing orders • Receiving goods • Returning goods • Goods distribution • Warehouse management • Matching documentation • Preparation for payment/Accounts payable • Inventory stock count, verification &reconciliation (including ICN mgt) and treatment of discrepancies CFO Office to issue logistics management and inventory SOP

  37. MFMA SCM PPOS – LOGSITICS MANAGEMENT CASE STUDY • USER • What logistics activities are you, as a user, responsible for? • PRACTITIONER • What logistics activities are you, as a practitioner, responsible for? • SENIOR MANAGER • What logistics information do you, as a manager, require to support you within your area of responsibility?

  38. MFMA SCM PPOS – ASSET MANAGEMENT IMMOVABLE ASSET MANAGEMENT • Responsibilities • Planning • Capital projects • Internal controls • MATR • Land Disposal Policy Council decide on conditions for management of immovable assets and capital projects SCM process then followed As per Municipal Asset Management Policy and Land Disposal Policy, MATR, MFMA 14&33

  39. CAPITAL ASSET PROCESS APPLICATION At this stage the MSA s 78 & MATR 41(2)(a) process is complete if the asset is related to a municipal service or the MATR 41(2)(b) process is complete if the asset is related to a commercial service cs Application form is completed and processed through corporate services as per LDP 12.3 CONSIDERATION As per LDP 12.2 AO Council As per LDP 12.2/MFMA s 14(2)/MATR 13(2)/MATR 34(1) & (3)/ MATR 36 & MATR 40 DIRECT NEGOTIATION As per LDP 10.1.8/LDP 12.6/ MATR 12(3)/MATR 40/ MATR 42 APPROVAL PUBLIC PARTICIPATION As per LDP 10.1.8 /MATR 34(3) SCM PROCESS As per LDP 12.4.3/ MFMA s 16(5)/ SCM TR 40/SCMP LDC Convert to BSC/ As per LDP 12.2.1(iii) AO BEC As per SCMP BAC As per LDP 12.5 - notice As per LDP 12.5 – final recommendation Council LDC AO AWARD As per LDP 12.6/SCMP/SCM TR 49 & 50/MSA 62/MSA 84 NEGOTIATION LDC AO SIGN CONTRACT Council PUBLIC As per MATR 18 & 46 MFMA SCM PPOS – POWERS

  40. MFMA SCM PPOS – ASSET MANAGEMENT • You are the Manager in the Waste Management Department of the Municipality and you have been approached by a service provider with an unsolicited bid to take over the Waste Management Services of the Municipality and render such services within a green city business management concept (an international company guarantees the technological solutions as well as the financial backing to the service provider). The service provider will also provide a waste farming project (piggery) for the unemployed in the municipal area and convert the waste into agricultural water as well as energy/electricity conversion. In return the service provider wants to be reimbursed for the electricity and water consumed and access for a period of 25 years to lease the waste management plant property and surrounding land belonging to the Municipality. • You regard the project proposal as viable and want to instruct the SCM Unit to support you to realise the unsolicited bid. What do you have to consider and what are all the requirements you have to adhere to achieve the above? IMMOVABLE ASSET MANAGEMENT • Responsibilities • Planning • Capital projects • Internal controls • MATR • Land Disposal Policy

  41. STEP 5(a) Adj Comm to consider and advise MM: • any comments submitted by the public; and • any written comments and recommendations of the National Treasury or the relevant provincial treasury. STEP 1 (a) Supplier to submit proposal motivating • the product or service offered is a demonstrably or proven unique innovative concept; • the product or service will be exceptionally beneficial to, or have exceptional cost advantages for, the municipality; • the person who made the bid is the sole supplier of the product or service; and • the reasons why it would be impractical to follow the normal bidding processes. STEP 2(a) MM decision to consider bid STEP 3 (a) MM to inform public in accordance with MFMA 33 and MSA 21A, together with: • its reasons as to why the bid should not be open to other competitors; • an explanation of the potential benefits for the municipality or entity were it to accept the unsolicited bid; and • an invitation to the public or other potential suppliers to submit their comments within 30 days of the notice. STEP 4(a) MM to inform treasury in accordance with MFMA SCM TR 37(4) & MFMA 33 “... it must submit such comments, including any responses from the unsolicited bidder, to the National Treasury and the relevant provincial treasury for comment” STEP 6 Council decision as per MSA 78 and to note content of agreement as per MFMA 33 STEP 7 MM to conclude contract 30 days after Step 6, as per MFMA SCM TR 37 (9) NOTE MM decision not in line with Treasury comments, adhere to MFMA SCM TR 37 within 7 days – inform AGSA and PT STEP 1(b) – service provider appt by MM MSA section 77(b) – (f) & 78(a) – (b) assessment to be conducted STEP 2(b) Council decision to continue with MSA 78 – external mechanism STEP 3 (b) MM to inform local community as per MSA section 78(3)(a) of intention STEP 4(b) & STEP 5 (b) – service provider appt by MM Conduct MSA section 78(3)(b) & (c) study and compile report MFMA SCM PPOS – ASSET MANAGEMENT

  42. MFMA SCM PPOS – DISPOSAL MANAGEMENT DISPOSAL MANAGEMENT • Inventory disposal • Preparation • Process • Control of documentation • Immovable Asset disposal • Advertisement • Application • Approval • Negotiation • Obsolescence planning • Renewal Planning • Disposal decision • Disposal strategy • Alternatives to disposal, e.g. letting

  43. MFMA SCM PPOS – DISPOSAL MANAGEMENT • CASE STUDY • USER • What do you as user need to prepare before submitting an asset for disposal? • PRACTITIONER • Prepare a checklist for the SCM practitioner responsible for disposals of all requirements to ensure a sound disposal process. • SENIOR MANAGER • What do you as manager need to consider before submitting an asset for disposal?

  44. MFMA SCM PPOS – RISK AND PERFORMANCE MANAGEMENT Risk and Performance Management • Risk management • Responsibility for Risk Management • Elements of Risk Management • Application of Risk Management 7-Step process + contractual issues

  45. MFMA SCM PPOS – RISK AND PERFORMANCE MANAGEMENT Management information/ Performance management FOR Internal and External reporting Risk and Performance Management • SCM performance review • Supplier performance • Reporting of SCM information • Optimal system utilisation • Safeguarding of SCM information Defining performance management Record keeping Reporting Contracts reporting questionnaire: National Treasury Assessment/Measurement of Supply Chain Performance Defining Contractor and SCM performance measurement Types of records to be kept is listed

  46. MFMA SCM PPOS – RISK AND PERFORMANCE MANAGEMENT Management information/ Performance management FOR Internal and External reporting Risk and Performance Management • SCM performance review • Supplier performance • Reporting of SCM information • Optimal system utilisation • Safeguarding of SCM information OPTIMAL SYSTEM UTILISATION – MINIMUM USER-SPECIFICATIONS Types of records to be kept is listed

  47. MFMA SCM PPOS – RISK AND PERFORMANCE MANAGEMENT Management information/ Performance management FOR Internal and External reporting Risk and Performance Management • SCM performance review • Supplier performance • Reporting of SCM information • Optimal system utilisation • Safeguarding of SCM information SAFEGUARDING OF INFORMATION Types of records to be kept is listed

  48. MFMA SCM PPOS – RISK AND PERFORMANCE MANAGEMENT Management information/ Performance management FOR Internal and External reporting Risk and Performance Management • SCM performance review • Supplier performance • Reporting of SCM information • Optimal system utilisation • Safeguarding of SCM information • ASSIGNMENT • Use the Specification/Terms of Reference developed by you in MODULE 3 and as a manager/member/SCM adviser of the Bid Specification Committee conduct a risk assessment as per the template at Annexure E. Types of records to be kept is listed

  49. MFMA SCM PPOS - ANSWER

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