STRATEGIES FOR EFFECTIVE PROCUREMENT WITHIN THE ...

1

South Africa Works because of Public Works

PRESENTATION TO THE STANDING COMMITTEE ON APPROPRIATION

12 May 2016

Office of the Director-General I Public Works I CGO I Pretoria

2

TABLE OF CONTENTS

No. Item1. DPW’s readiness and strategies to spend to effectively spend the budget allocation for 2016/17

2. Strategies for effective procurement within the entire Public Works sector- Procurement Strategies- Value for money- Lease and Property Management- Good quality services- Black Economic Empowerment- Superior contract management- Infrastructure implementation and maintenance - Payment of suppliers within 30 days

3. Strategies for effective implementation of the EPWP and response to audit findings on EPWP

3

DPW’S READINESS AND STRATEGIES TO SPEND TO EFFECTIVELY SPEND THE BUDGET ALLOCATION FOR 2016/17

PMTE substantially operationalised Separate organisational structure for the Department and the PMTE Key appointments at senior management concluded. Operationalisation of the Governance, Risk and Compliance (GRC) and Intergovernmental

Relations (IGR) branches Fundamental reforms of our Supply Chain Management (Policies and categorisation into 3 core

streams – Infrastructure, Properties and goods & services). Completion of the rollout of an integrated Enterprise Resource Planning (ERP) system (Financial

management system interface with key operating system – leases, IAR and construction). Substantially complete, accurate and reliable Immovable Asset register (IAR) Finalised approach on the use of other government implementing agencies to complement

capacity shortfall in the PMTE Develop and review policies for the prestige accommodation portfolio in line with the Ministerial

Handbook. Full implementation of the Infrastructure Delivery Management System (IDMS).

BUDGET ALLOCATION PER PROGRAMME

4

Programmes

Adjusted appropriation Medium-term expenditure estimate

2015/16 2016/17 2017/18 2018/19

(R’000) (R’000) (R’000) (R’000)

Administration 477 346 516 634 544 290 582 679

Intergovernmental Coordination 45 723 31 439 33 895 35 730

Expanded Public Works Programme 1 953 369 2 319 500 2 475 892 2 627 900

Property and Construction Industry Policy and Research 3 742 962 3 565 100 4 064 208 4 307 185

Prestige Policy 92 822 96 092 102 874 108 311

Total 6 312 222 6 528 765 7 221 159 7 661 805

5

Programme Strategic Goal(s) Strategic Objective(s) 5 Year Targets Budget

1. Administration Support service delivery in a smart, proactive and business centric manner that is aligned to statutory requirements.

• To improve governance processes within the Department and PMTE

• To combat fraud and corruption within the Department and PMTE

• To provide a compliant internal control, financial and SCM service

• To facilitate organisational transformation through effective performance management.

• To provide an enterprise ICT architecture to support all business functions

• To protect the interests of the Department by providing legal services

• 100% compliance of management practices as per MPAT

• 85% reduction in fraud and corruption risk levels

• Clean audit outcome

• An integrated HR Plan for DPW and PMTE developed annually

• An integrated Business system for PMTE

• 100% of litigation cases managed within the period stipulated by court procedures

Allocation: R517 million

Spending Objectives: - Fighting corruption,

improving governance processes and internal controls.

- Integration of Information Technology system as well as implementation of change management.

The bulk of the allocation in this programme is on compensation of employees and goods and services.

PROGRAMME OBJECTIVES AND BUDGET

6

Programme Strategic Goal(s) Strategic Objective(s) 5 Year Targets Budget

2. Intergovernmental Coordination

To provide oversight of the Public Works Sector.

To ensure integrated planning and coordination of concurrent function.

5 Interventions introduced to improve performance of the sector


Spending objective: - Improving cooperative

governance across the three spheres of Government in partnership with relevant state entities.

3. Expanded Public Works Programme

To provide an oversight role in the implementation of Public Employment Programmes (PEPs) through EPWP standardised frameworks

• To monitor and evaluate the implementation of PEP’s within the EPWP

• To support Non-Profit Organisations (NPOs) to implement PEPs within EPWP in the Non-State Sector.

• To support public bodies to implement PEPs within EPWP in the Infrastructure, Social and Environment and Culture Sectors

• To provide strategic guidance on sector convergence through the development of implementation frameworks

• 5 Annual progress reports on EPWP,

• 300 NPO’s providing services to communities as per EPWP principles,

• 290 public bodies implementing EPWP projects as per EPWP requirements and

• 3 projects implemented by public bodies

Allocation: R2.3 billion

Spending objective: - Coordinating the

implementation of the EPWP which aims to create work opportunities and provide income support to poor and unemployed through the use of labour intensive methods.


7

Programme Strategic Goal(s) Strategic Objective(s) 5 Year Targets Budget4. Property and Construction Industry Policy And Research

To transform the construction and property sectors through the development of policy and legislative prescripts

To research and develop policies and legislative prescripts for the construction and property sector

Approve 3 Legislative Prescripts

Allocation: R3.6 billion

Spending objectives: - Provision of strategic

leadership for the regulation of the construction sector

- Transformation and sound public sector immovable asset management.

The bulk of the allocation (R3.4 billion) in this programme is allocated towards the PMTE to performs immovable asset management functions on behalf of the Department. These functions includes the provision of office and residential accommodation for client departments at the national government level; as well as acquisition, management, operation, maintenance and disposal of immovable asset in the Department’s custody


8

Programme Strategic Goal(s) Strategic Objective(s) 5 Year Targets Budget5. Prestige Policy To oversee efficient delivery

of identified services to prestige clients

To improve delivery of service to Prestige clients

80% improvement in turnaround time for the resolutions of maintenance breakdowns


Spending objective: - Develop and review

policies for the prestige accommodation portfolio in line with the Ministerial Handbook.

- Improve the delivery of services to Prestige clients with regards to the provision of both movable and immovable assets as well as meeting the protocol responsibilities for State Functions.


9

STRATEGIES FOR EFFECTIVE PROCUREMENT WITHIN THE ENTIRE PUBLIC WORKS SECTOR

Procurement strategies Smart procurement through utilization of panels, terms and transversal contracts Transparency through the use of e-tender portal and Centralized Supplier Database (CSD) Introduction of electronic procurement & reduction of manual processing Operationalization of Contract Management in the Department Implementation and operationalize SCM process for infrastructure 2017/18 Implementation and operationalize in 2016/17 financial year of SCM process for leases Implementation of the E-Tender system

Value for money Within Facilities Management there are ongoing projects to improve:

Energy efficiency in buildings Reduce water usage

Implementation of term contracts to ensure efficiencies in respect of time and value for money. With renewal of leases there is an active engagement on the renegotiations of property leases to ensure DPW is paying within market

related rates. Optimisation of office space (an ongoing process) To facilitate the effective management of the entire life cycle of immovable assets used by the State the department is implementing

Archibus which is an integrated property management system.

10


Lease and property management Contributing to procurement of new leases from 51% Black ownership. Implementation of Archibus to manage the lease contracts, including data management system, reporting

system, analytical tool. (integrated property management system). SCM processes are being developed to allow for effective and timely procurement of leases. Leases will be procured at head office to ensure benefits of economies of scale. Panel of lessors to be procured through a tender process

Good quality service SCM is focusing on working closely with the operations to facilitate delivery. Engage monthly with Projects department to ensure the tenders are timeously processed. Focus on reduced audit findings and irregular expenditure. With the implementation of new systems and processes will result in reduced response time and improved

efficiencies. SLA with internal line functions

11


Black Economic Empowerment Implementation tool in 2016/17 to monitor the following spend on:

Women SMMEs BEE Rural areas

Focus procurement on awarding to 51% held BEE companies, through: Leases Facilities management Infrastructure (construction and renovations)

Revisit leasing module to give preference to 51% BEE companiesSuperior Contract Management

Ensure delivery of service in line with contracts. Value for money. Improved reporting on SCM statistics. Improved reporting on analytics - time and money spent. Database Source of contracts (Goods and Services) – reduced paper and electronic filing. Performance evaluation of suppliers and black listing non performing suppliers

12


Infrastructure Implementation and Maintenance As part of effective Demand Management, SCM will be assisting in various sourcing strategies to better address Clients needs in an

efficient yet compliant way. The following strategies will be rolled out in 2016/17 financial year:

Utilisation of pre-appointed panels for Built Environment Consultants (Anticipate date on implementation is September 2016) Utilisation of G-Commerce to procure items available through National Treasury Transversal Contracts (Anticipate date on

implementation is August 2016) Utilisation of term contracts for routine commodities (Anticipate date on implementation is August 2016) Consolidation of similar / related requirements for simultaneous procurement Batch tendering as opposed to continuous tendering to improve efficiencies and certainty to contractors Archibus will assist in improving and monitoring the provision of scheduled maintenance, planned improvements. Use of other organs of State to implement projects Establishment of joint teams with client departments Engagement of young built environment professionals

Payment Of Suppliers Within 30 Days Full implementation of an integrated ERP system (Financial system interfaced with operational system). The above will facilitate online real time requisitioning, ordering, receiving of goods and services, invoicing and matching all these for

prompt payment process. Suppliers to be capacitated with the complex requirements of SCM system. Consequence management for non-compliant officials (prompt submission of invoices from suppliers).

13


Increased transparency Introduction of Infrastructure delivery transparency model

Utilisation of Centralised Supplier Database of National Treasury Publication of RFP’s and Bids on National Treasury e-Portal Publication of RFP’s/Bids and final awards on the Departmental Website E-tender CIDB register of contracts

14

STRATEGIES FOR EFFECTIVE EPWP AND RESPONSE TO AUDIT FINDINGS ON EPWP

Effective EPWP Strategies Effective usage of the Public Employment Programme – Inter Ministerial Committee (PEP-IMC) to unblock strategic constraints for the

successful implementation of programme. Creating coordination mechanisms under EPWP that link to structures at all spheres of Government. Developing the funding frameworks conditions and mechanisms for the EPWP. Enhancing technical support to participating Municipalities and concluding agreements between the Minister of Public Works,

Premiers/MECs of Public Works and Municipal Mayors to implement the programme. Also supporting municipalities to develop and endorse EPWP Municipal policy.

Monitoring the implementation of the EPWP against its targets and evaluating the impact of the EPWP. Designing and implementing a national communication strategy for the EPWP and providing guidelines on corporate identity. Identifying areas for the further expansion of the EPWP and designing programmes for implementation of the EPWP in these areas and

documenting and publicising best practices in the EPWP. Establishing appropriate accountability and location thereof (audit).

15

STRATEGIES FOR EFFECTIVE EPWP AND RESPONSE TO AUDIT FINDINGS ON EPWP

The 2015/16 Q2 preliminary audits started in December 2015 and from the projects visited by AGSA to date, the following deviations have been noted:

No copy of ID documents for participants.

Signed attendance registers for participants are not available.

Employment contracts for participants are not available.

Payment registers or bank statements not available to confirm payments done.

Participants not reported (pending list or not reported at all)

Lists of projects not reported that are EPWP in public bodies.

AGSA audits DPW as though DPW creates the reported on work opportunities itself, rather than its coordination role.

To remedy this in the 2015/16 Audits:

DPW is undertaking pre-audit visits to help public bodies have compliance on sites.

Engaging with Accounting Officers of implementing bodies to ensure compliance with all EPWP prescripts.

Engaging with DPME and the AGSA to determine an appropriate manner in which to audit the EPWP and ensure Accounting Officers of implementing bodies are held accountable for non-compliance to EPWP prescript.

16

OTHER MATTERS IN WHICH STANDING COMMITTEE MAY ASSIST

Continued oversight by the Committee

Support with departmental strategies to cover funding gaps (especially compensation of employees)

Support with recoveries of outstanding debts from client departments

Approval of the long outstanding unauthorised expenditure (2007/08 to 2014/15)

17

National Department of Public Works (NDPW)

Head Office: Public WorksCGO BuildingCnr Bosman and MadibaPretoria CentralPrivate BagX65Pretoria0001

Website: http://www.publicworks.gov.za

Thank You

http://www.publicworks.gov.za/

STRATEGIES FOR EFFECTIVE PROCUREMENT WITHIN THE ...

Documents

Transcript of STRATEGIES FOR EFFECTIVE PROCUREMENT WITHIN THE ...