BRIEFING TO THE PORTFOLIO COMMITTEE ON THE UTILIZATION OF CONSULTANTS BY DWAF 8 June 2005

1. BRIEFING TO THE PORTFOLIO COMMITTEEON THE UTILIZATION OF CONSULTANTS BY DWAF8 June 2005

2. CONTENT • Background • DWAF PSP Policy • Utilisation of Consultants by DWAF • Total Summary • Per Branch • Reasons for Utilisation of Consultants • Challenges and Responses • Current Processes

3. BACKGROUND • Government uses consultants when the necessary skills and/or resources to perform a task are not available and officials cannot reasonably be trained or recruited in the time available. • Section 217 of the Constitution requires national government departments to contract for services or goods through a system which is fair, equitable, transparent, competitive and cost-effective.

4. BACKGROUND (Cont.) • The Constitution further requires a procurement policy providing for – • categories of preference in the allocation of contracts; and • the protection or advancement of persons, or categories of persons, disadvantaged by unfair discrimination. • The PFMA requires the Accounting Officer to ensure that the department has an appropriate procurement and provisioning system which is fair, equitable, transparent, competitive and cost-effective.

5. DWAF PSP POLICY DWAF’s current policy for the appointment of Professional Service Providers (PSP’s) was implemented in August 2002 & revised in March 2003 to give effect to new legislation dealing with BEE, BBBEE and PPPFA.

6. DWAF PSP POLICY (Cont.) • Purpose of new policy is amongst others to: • Spread work amongst suitable PSP’s; • Strengthen HDE and HDI through active capacity building and skills development, through participation rates and JV’s; • In multi-disciplinary and complex projects select the PSP with the best technical capabilities and project approach (above R3m); • Incorporate the Preferential Procurement Regulations, 2001 and a uniform evaluation system for project proposal evaluation.

7. DWAF PSP POLICY (Cont.) • The Policy is divided into five parts: • Definitions, planning and control issues; • Category 1: Contract value up to R150 000; • Category 2: Contract value R150 000 to R3 million; • Category 3: Contract value above R3 million; • Evaluation system; and • Monitoring system (Using the PSP Database)

8. DWAF PSP POLICY (Cont.) • I) Evaluation System: • 80:20 and 90:10 evaluation systems of the PPPFA are applied. • II) PSP Database: • A PSP Database has been developed for search, appointment and management of PSP’s. • III) Using the PSP Database as a search tool: • The PSP Database records PSP’s by: • Consulting discipline • HDI ownership % • Province • Field(s) of specialisation.

9. UTILISATION OF CONSULTANTS (PSP’s) BY DWAF • Summary (Total DWAF) : • 2004/2005 2003/2004 • Number of Contracts - 184 130 • Total Amount Spent - R 198.28m R 166.37m • HDI Amount - R 78.78m R 84.76m • % Contracts to HDI - 39.73% 50.9% • Non HDI Amount - R 119.50m R 81.61m • % Contracts to Non HDI - 60.27% 49.1%

10. UTILISATION OF CONSULTANTS (PSP) BY DWAF

11. REASONS FOR UTILISATION OF CONSULTANTS Reasons identified by project managers and heads of directorates are that: “The necessary skills, expertise, capacity to perform a project are not readily available” “It is not possible either to train or to recruit officials in the time available” “No capacity to enable skills and knowledge transfer to officials due to high turnover rate”

12. CHALLENGES AND RESPONSES

13. CHALLENGES AND RESPONSES

14. CURRENT PROCCESS BEING UNDERTAKEN • The following processes are underway: • Establishment of Supply Chain Management Office • Updating of PSP policy. • Approval and implementation of BBBEE Strategy.

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