Transform Your Procurement Process with Our Consultancy Bill Format for Procurement

Consultancy bill format for Procurement

[Music] before I go further my name is doly m as son indicated so this event has been especially designed for procurement practitioners public officials and anyone involved in public procurement processes and uh good afternoon everybody good afternoon colleagues thank you for this opportunity uh which I do not take likely this is uh something a responsibility to try and get across to you probably one of the most important pieces of legislation that not only the public procurement fraternity is going to have to deal with but actually South Africa and as I run through that you'll start to see why this is such an important piece of legislation let's let's kick off so um public procurement in South Africa is almost a trillion Rand that's a trillion Rand that is a million million Rand is spent every year by the state on procurement that excludes salaries and wages this is procurement spend a trillion Rand and it's spent by over 720 different procuring entities across the world now very different in public procurement is we do not just focus on value for money there's always other strategic broader policy outcomes and this is this is a a picture from an organization called oecd we do not have a similar picture in South Africa but you can see that public procurement doesn't just focus on value for money it's green it's support of small businesses it's support of women-owned businesses there are many other different policy outcomes for that now one of the big changes you'll see is that in 2015 we were described by national treasur is being very focused around Supply Chain management Supply Chain management was an umbrella term that included procurement contract management Logistics disposals the procurement the post procurement and everything was termed Supply Chain management under that Supply Chain management umbrella that is changing we are moving back towards a world in the public procurement space where we're going to be talking about procurement the odd thing is that procurement is still going to mean what we have come to know as Supply Chain management now almost 11 years ago Professor Kino and many others were requested for input on a new public procurement bill in um 2014 treasury directed uh National treasury I'm sorry the cabinet directed National treasury to put this together uh in December 2014 and uh in 2015 the offic the chief recate officer said hey we will get something out quite soon uh it will be circulated for comment early in 2015 well five years later in February 2020 we finally saw a version of that it U was put out for comment the comments closed sometime in June and uh there's been a process that's been followed since then in October after they had received many of and reviewed many of the comments that they received on that first draft that was issued for public comment they put out a timeline which basically saw us having the bill being passed by parliament in November 2022 that was eventually passed uh by parliament in May this year and sent to the president for the president's signature so two years why the why the delay many issues happened within the public procurement space one of those was the big AF business case the other one was was the report by uh the zond commission and many of those things required a lot of attention by the public procurement community in that and that might be some of the reason for the delay where is the bill now it has not yet been signed by the president it is sitting on his desk we know he has a pen we know he has ink in the pen because he's been signing other bills this one has not yet been signed can he sign it now that the the new Parliament is in place the answer to that from many of the legal folk that we're working with is yes he has anytime he wants to he can sign this bill and and decide when the bill will be effective when will it be effective this is not an official perspective this is Sean's perspective I do not think that this is going to be effective until middle of next year if we're lucky possibly late in 2025 why because there is a lot of work to be done before we're anywhere close to understanding what we put into our policies yes there's chances that we might be able to take aspects of the bill and stagger the implementation certainly we need chapter four we'll talk about four and chapter five is more urgent but those two require quite a lot of work to be done as far as the regulations are concerned there are uh over in fact it's I I checked last night there's 66 ref refences to regulations in the current version of the bill 66 places that say we need regulations for this we need regulations for that very differently to what we've had in the past is those regulations are going to have to be consulted on by the minister of of Finance with the responsible ministers and at this point in time I can't think of a minister who they will not have to consult with it will go out for public comment they will have to receive receive the comments back they'll have to engage often on those they'll have to report back on the consultation that happened once it's been approved by um treasury it will then have to go to Parliament just as we've had with the bill and follow the process through the the the two houses before the regulations are going to be approved it's going to take some time to get that done we will see aspects of the bill such as the tribunals which might even come far later than late next year and that's because there's no funding at the moment and the the time that it will take to put the tribunals in place will be well after the effect of data is concerned what is the big impact what is the change well there's two pieces of legislation which will be repealed in entirety I'm not sure why they haven't been repealed years ago the T Bo tender board Act and the national supplies procurement act those two will be be scrapped entirely as well as very significant the preferential procurement policy framework act that act that's been out for 24 years that will be scrapped in its entirety there are many many many other acts where there will be some changes two of those big ones is the Public Finance Management act will be amended there are only two paragraphs interestingly enough that will be fixed and those two paragraphs will be taken out of the pfma and the pfma will no longer be the governing act for procurement in the pfma entities the municipal Finance Management act local government similar thing there will be a section that will be taken out and Municipal Finance Management act will focus on finance the public procurement act will focus on procurement what's the bill meant to do regulate public procurement prescribe a framework within which preferential procurement must be implemented and to provide for matters connected there with you're starting to see the focus and the emphasis of this bill a framework within which preferential procurement must be implemented and to provide with matters connected therewith quite interesting the bill goes through obviously and we please it mentions 217 2171 2172 2173 we'd be surprised if it wasn't there the surprising thing is it also refers to for the first time in legislation in curement section 216 of the Constitution and you'll start to see here that there is a message coming through which we've not heard before for the first time there's a push for uniform treasury norms and standards in procurement and they're referencing a section of the Constitution 2161 that says they have a responsibility to ensure uniform treasury norms and standards uh 19511 and3 there's no surprise there what's very interesting is the bill also recognizes the need to increase capacity of organs of state and the ncop in particular the National Council of provinces was very very critical of Treasury to say how can you say that but not recognize that there's a financial implication for that it will be interesting to see how treasury response to that and uh takes that forward because they were requested to understand what the economic issues are as far as that's concerned but very interesting the aim is a single framework that promotes technology and combats corruption that's interesting in order to create a single framework are you are you getting the message messages here consistency uniformity single framework very very interesting now the draft that that was issued in 2020 uh was cut down significantly we now have about 35 pages in small print of an act now let me pause there briefly in the pfma at the ACT level there is one tw line paragraph the triple PFA at the ACT level is three pages depending on on the the the spacing of that three pages at the ACT level we've got three pages in a paragraph from a pfma perspective the pfma entities in the in the country will be faced with an act which now has 35 Pages the quantum is significant it started off very very broad which it included infrastructure disposal the assets the infrastructure disposable assets have been have been taken out Splat management has been taken up it's all been put into this one chapter five called General procurement requirements so very interesting that um that change so it certainly has um has said we're going to put this act out there but there's a lot of detail that will be coming later who will the ACT apply to I can't think of anyone it will not apply to with the exception of the parliaments and the provincial legislators the only aspect that will apply to parliaments and provincial legislatures is chapter 4 the preferential procurement chapter very interesting so every one of the the the public entities in the country whether it's esum or transnet or the small municipality in the remotest part of the country this act will apply to them what it does is it sets up a public procurement office and it gives that public procurement office legislation which interestingly enough we've never had the ocpo was there by name but there was no legislation there was no empowering legislation to give the ocpo any power the legislation refer to National treasury not the ocpo this now is going to empower this public procurement office one of the bit changes from the February 2020 draft that was issued was that draft was going to set this up as a regulator it's now moved back towards an office within National Treasures interesting chapter three has a very big Focus now this is this is in the ACT folk right right now in in in um the public procurement World we've got a code of conduct that was issued under an instruction and circular which we need to consider we have pages in this act at an act a primary legislation level talking about codes of conduct procurement Integrity debarment interesting it's going to extend to everybody right now in the public procurement world it's only the supply chain people in supply chain that have to sign the code of conduct this is going to apply to everybody from board members down to the role players in the different bid committees much wider than currently it brings into the bill this notion called debarment now currently we we refer to it as restriction that's where Supply is restricted from doing business with any organ of State uh the the one popular one was was a big um consulting company Bane Consulting was recently B big all over in the news around being restricted the ACT talks about the process for debarring we could spend probably a few hours talking about chapter 4 chapter 4 is the chapter that will replace the public the preferential procurement policy framework act the triple PFA the preferential procurment policy framework act that piece of legislation that talks about 8020 9010 chapter 4 is going to replace that what's very interesting is that you will see as we go through in the framework that there's something missing if we look at the framework and the framework essentially is on this particular slide it talks about a mechanism in 2 a called setting aside right now in public procurement if you were to ask a procurement official can you set aside they say no there was a practice that issued that prohibits the use of set asides this act is going to provide that very powerful mechanism what does it set aside well we're going to set aside this contract for example we're going to set aside this contract for black women-owned companies in Soto right that's a set aside very interesting is we've heard out there that because of that afri business case that this is not legal it's not lawful if you go back to that AFE business case why the pre-qualification legislation was declared unlawful it was because it was not in the framework act the triple PFA this replaces the triple PFA this provides the framework and legitimizes the use of setting aside as a legitimate mechanism in public perment in addition to set aside they're also going to introduce another mechanism called pre-qualification very similar to the mechanism we had in 2017 and we will also then have which is the section 19 a mechanism called subcontracting very similar to what we had in 2017 that's the mechanism what's interesting is they will describe prescribe by regulation thresholds for set aside so they particularly will say it's it's all transactions up to this value must be set aside see the word must be set aside from that point upwards will be pre-qualification to a threshold we don't know what that will be pre-qualification very similar to regulation four that we had in 2017 and then above that will be compulsory subcontracting as a condition of bid we tried very hard to push against that as a mechanism a condition of bid we wanted to be a condition of contract but we didn't quite get that uh that achieved then we have local production local content which is very similar that makes a return now in this one um very similar to we've had in 2011 and 2017 and if you if I was to tell you there are a couple of other things I haven't shown you everything here but if I was to tell you that that's it that's the essence the essence that's the materiality of the framework some of you might look at this and start saying but where is the equivalent of the 8020 9010 even if it could be 6040 or 7030 there is no mechanism for that kind of of preference procedure in chapter 4 let's move on chapter 5 very interesting very very very interesting we're moving into a legislative environment in public procurement where methods are very under legislated everybody uses panels there's not one piece of legislation in fact there's not even an instruction that treasury has issued on how a panel should be specified should operate but yet everybody uses them what chapter 5 says is that this bill will prescribe by way of Regulation the methods and procedures that will be used for procuring goods and services you will not be able to use a mechanism or a method for procuring goods or services which is not being regulated it's going to be a very different space that we're moving into another big area that we can talk about there's there's a lot more by the way on each of these I'm just going to give you the the key points big area is the public procurement office that office at National treasury must develop must develop and Implement a not many a procurement system very positive that information communication technology is built into this very positive that it's ending some are wondering and are concerned as to the people Poo's ability to put in place a procurement system that will satisfy the different diversity of methods that are needed out there by the massively diverse uh set of public sector companies that we've got with a single system going to be very interesting to see how that goes very new is that a tribunal mechanism will be included which will give suppliers an ability to challenge a decision that was made by a procuring institution without going to court right now it's expensive for a supplier to challenge a decision they're not happy with your decision or your response as to how you've given it to a particular supplier their only option is a court process for suppliers that is extremely expensive because public organs have the capital to challenge once decisions being made they can they can ask for that to be appealed reviewed those mechanisms are expensive for supplies the tribunal mechanism which is effective and in use in kzn as we speak is something that will be rolled across the country at a national level and throughout and there will be a um an ability then for suppliers to FasTrack those without necessarily getting into the costly Court processes I'm almost almost complete the regulations are mandatory for a range of requirements many of which include things that we've never had before we've never had regulations on competency requirements I'm a bit worried as to where that will come from where the content will come from perhaps that is a role for SS to do there's going to be regulations on the security vetting of bidders I'm really really worried about that one we hope the regulations are very CLE that it's not every bidder that has to be secured in vetted can you just imagine the the difficulty in that process but there will be a range a range of of um regulations that are going to have to be issued and um there's a a massive amount of work that needs to be done before those regulations are complete consulted on applicable and everybody is happy with them there are also um some areas in the bill where will be optional to have regulations and um the public procument office does not necessarily have to do all of those as regulations so um regulations regarding lifestyle Audits and things like that would will be optional as far as the PO office is concerned many others will not be there will have to do that but as we set up front the Minister of Finance is going to consult with the ministers on the drafting of the regulations before they're published um very very interesting that process it's going to be a very different world where for a long time treasury has just issued out a draft for some comment and then they they say well this is it uh We've now decided that this will be the instruction going forward um they must be be published in draft they'll be sent out for comments Etc and then sent to Parliament as reviewed before folk that's it it's 35 Pages I've taken a couple of minutes to go through it uh this is the public procurement Act of 2024 as soon as the president signs it then I'm I'm sure we'll have a lot more certainty on when this will be effective but a very significant piece of legislation which will have a significant impact on organs of State on public procurement practitioners and I'm looking forward to listening to tandi Pino when she starts to unpack what some of those implications are so what are your thought process um around the main regulations or acts which governs the procurement and sem environment do you think that there might be a need to review a constitution or pfma yes I heard you spoke about the possibility of scrapping the triple PFA which I think as you were going through the presentation some of the areas are incorporated into the bill do you foresee a review of a Constitution and the pfma would you like me to respond to that now Dr mcau yes please just few yes sure um so look there's there's probably um a reason for looking at the Constitution I don't think personally that the constitution needs to be relooked at we have a very very powerful statement in section 2172 of the Constitution and 2172 which we need to unpack a lot more as of procurement Community says that subsection one does not prevent the organ of state from implementing a procurement policy which provides for categories of preference in the in the allocation of contracts very powerful right so nobody can say that the con Constitution says you have to be fair it says no we can ignore those Provisions in subsection one as long as it's within the context of a framework so that's the Constitution I do not see that um being changed for some time there is it's unequivocal Dr mcle the triple PFA when this is act when this is effective the triple PFA is dead it's gone it's buried together with its regulations the two paragraphs in the pfma which will be taken out of the pfma and repealed those two paragraphs give the power to the regulations under pfma Treasury regulations 16a and treasur regation 16 the equivalent regulations under mfma when those two paragraphs in the P are scrapped the regulations are dead they're gone every instruction that we've got right now is does not apply when this is effective it is a new game a new area that we're going to be working in there there might be an opportunity to take some of those regulations and rescript them and redraft them and put them under this new act but it's not going to happen in the same way for example the public uh private partnership regulations right now are two different sets of regulations one for pfma and one for local government we will not have that we're going to have one act so yes it might it might in its in in the majority of the shape that it's in move under the new act but it's going to have to be redrafted it's going to have to be consulted on again it's going to have to go through the different houses of Parliament before we can get there I hope that helps do you think there are barriers to the public procurement bill which is being passed are there barriers um massive barriers Finance capacity um I mean this is this is going to put a massive strain on a an organization which which um uh a community if you like is is very comfortable doing panels without having any regulation or legislation that governs them they're going to lose that so the mindset the capacity the training that we need the competency that we need to deal with this is going to be quite so so the key barrier right now I think is going to be uh the capacity at at National treasury at the office the chief procurement officer and um and likewise at the different provincial treasuries okay thank you so I'm going to be talking to the Practical implications of the bill so basically I'm going to be talking to what we are currently doing and then should the ACT be approved how will that um impact the where we are doing things um firstly uh the definition on the bill um for the longest time we never had a definition of emergency we moved from emergency being catering to lifethreatening and everything in between So currently now we have an act that outlines what is the definition of emergency um secondly the panel um we use panels a lot on framework agreements uh body shops Etc but now a word of caution is that a panel has been described on the act as panel meaning that the tribunal constituted in terms of section 45 so meaning that um you can then use a panel in your policy for any other thing except a panel as defined in the ACT then the advice would be then rather use framework agreement or something similar and then also when you look at transversal term contract it now means a contract arranged by a relevant treasury or another procuring institution what we know mostly about transversal contracts is that they're done by national Treasury and provincial Treasury and usually when you talk about relevant treasury on most instances we referring to provincial treasury but also do note that when H when the definition says or another procuring institution that's where your National treasury your SAA and other procuring institution will fall in that category meaning that there hasn't been a change in terms of how transversal contracts are done it's just that the way they packaged it and then Sean talked about um the application of the ACT we no longer having um organs of state but instead the ACT makes reference to procuring institutions and procuring institution is what we term as organ of state and then section 31 then would list those procuring institution that are applicable or perhaps that this act is applicable um to now one thing that also has has changed in the in in this act is that the office of the chief procurement officer is now the office Chief procurement officer is now called the head of procurement and um what is currently um still actually continuing with the current practice whereby National Treasury and provincial treasury usually issue binding instructions to um departments and and S soes but for municipalities they only become legally binding if they adopted by Council so if you look at subsection D it does say that after consultation with the relevant category of procuring institution we determine the oh so so so sorry sorry um this one actually talks now to the model policy model policy there's always been that question to say when we get a model policy from National treasury must we adopted s is can are we allowed to change it are we allowed to have a different policy so subsection D actually clarifies that that now you have an option to either adopt the policy s is or you make amendment to it or not adopt it at all so the model policy is purely a guide from National treasury which you have a choice to take or not to take but also this section Section 5 point subsection two and three also talks to the issue around the municipalities that are not actually required to follow instruction from provincial National Treasury unless if they are adopted by the municipal Council in case of the entity they adopted by the entity's parent municipality so this is basically something that is still currently happening and this also makes reference to provincial treasuries as well that even if the issue a Gazette is not applicable to the municipality if you look at section six where I've highlighted bran figure number three it says that a provincial treasury May within the province enforce effective management and transparency in respect of the pro function of procuring solution except municipalities and Municipal entities so basically like I said this is still currently the same as the way things are happening with the current legislation um one thing that has always been a challenge in the procurement spaces procurement practitioners is receiving illegal instructions from our bosses for lack of a better word could be a politician accounting officer CFO anyone so now the ACT is coming outright to say that you may not Implement that particular instruction and you as being the affected person you must inform the public procurement office or the relevant provincial treasury in a prescribed manner of the direction objection and the reason for objection so you might get an instruction from your supervisor of which you of the view that is in contravention with a legislation you will then not Implement that instruction but also you need to further report to the office of the chief procurement officer pertaining to that and then if you look at number four lastly talks about the affected person may not despite any term of emplo employment be subjected to occupational detriment a lot of times the reason why we end up implementing these instructions we like to say um put it in writing at least I won't be charged for insubordination so that would not surface any more if an instruction is not compliant with the law you're not supposed to implement it but you also must take it further and report it and now we know that you're not going to be a disadvantage in any way and this is also making reference to the protected disclosure Act and then Sean spoke to chapter four uh which is preferential procurement in a nutshell 2017 regulation is making a comeback but what is interesting about this if you look at um subsection two it says that the procurement policy of the procure institution referred to subsection one must provide for setting aside bits in ance with Section 17 and if setting aside in ance with Section 17 is not possible then you pre-qualify pre-qualification in ACC section 18 and then if the procurement in ance with Section 178 19 being subcontracting as a condition of tender is not possible the procuring institution must record and Report the reason to the public procurement office and the relevant treasury so if you can't comply with Section 17 18 and 19 it needs to be reported so it's not an option anymore you have to do it if you can't do it you need to report to the relevant uh structures and this is basically now talk about the pre-qualification in terms of how it's done it's still the same as 2017 regulation but this at an act level and then in the regulation it will be prescribed in terms of the different percentages that one would have to uh pre-qualify local content one thing that's very interesting that I'm picking about about local content is that now this act is bringing a new Minister into this particular legislation we know that this act belongs to the Minister of Finance but now with local content now the act it says the minister responsible for trade and Industry and competition must by notice designate a sector so it's not going to be the Finance Minister it will be the minister of trade uh trade and Industry and then what will then happen is that the minister uh the designation and stipulation as invisage may only occur after the the responsible Minister has I think with the whole um situation of the 2017 regulation being found to be unconstitutional we've seen in terms of also the relationship between these uh Ministries and different organs of state so now sometimes one will think that because local content is a requirement for me as an organ of state of as a procurement institution I need to implement it because the regulation says so this one you need to be very cautious that it needs to first come from the minister of trade of Industry if it doesn't come from that Minister then you cannot implement it and then also if you look at section 6 a says that if the required quantity of goods um subject to a designation in terms of subsection a cannot be wholly sourced from local manufactures and or at the distin legal content threshold for the perod designation of both procurement instit procuring institution May submit a request for a waiver this is where now you are requesting to the minister to not implement this particular requirement I found it quite odd to have this kind of a section meaning that does it say that there will be instances where a sector will be designated whereby it will not be possible for such to actually take place because that's basically what this section is saying the responsible Minister must within 30 days respond to the request for a waiver given reasons for the decision failing which approval will be deemed to be granted to the procuring institution that may that made the request so you make a request for a waiver that I cannot Implement a designated sector of furniture for whatever reason and then within 30 days the minister of trade of Industry must indicate to you that okay we are approving your waiver if the minister doesn't then you proceed so this again it's making me feel a bit uncomfortable again with local content but um it is what it is again sub chapter 4 talks to the condition of contract we know that subcontract subcontracting is a condition of tender but also there's now an addition to say that as a condition of contract as well a procuring institution may as prescribed provide for measures of preference as a condition of contract that the supplier must achieve at the end of the contract so basically on Contracting you might say to the B when this contract ends you must have Empower 20 youth or you must have created jobs for this particular women or whatever the case may be it will be a condition of contract and then the future dels must form part of the contract with set Milestone to be achieved together with the penalties one thing that always miss a lot in our contract is actual penalties when it comes to noncompliance with these conditions so now it's an act matter that you need to also put penalties should such condition uh not be complied with um then here it talks about uh reconation of the word I think Sean spoke about it but basically what I want to highlight on this one what is currently happening in our uh environment is that when a a bidder is not happy with the decision of the of the of the organ of State they will go straight to the courts and then they will litigate but now the ACT has created anical structure whereby first the the service provider needs to go to the organ of state if they're not happy there they go to the tribunal they're not happy there then they go to the courts but what's very interesting about this section is that firstly says the tribunal or a court may not review a decision to award a bid unless the bidder has EX Ed the internal remedies and vers in subsection one so the internal remedies will be the remedies that is that is available for the specific organ of state but also interestingly if you look at subsection three says an application referred to sub seexual must be submitted to the procure institution within 10 days of the date the bider is informed of the decision of the award I know a lot of tender adverts have this statement to say if you sorry if you do not hear anything from us after 90 days of closure of tender you must your bit as being non responsive and we leave it there well it helps because sometimes some institutions receive a high volume of bits and they won't be able to communicate with everyone but I think this one now it makes it us to start thinking of creative ways to inform biders of the award that we have made because now we know that there is that 10 days window period of which bers can actually launch these um um um complaints or maybe litigations so maybe you can decide to put on your website or maybe we can decide I mean we know that we have a tender portal from National treasury the question is how easy it is for the bers to also access that um in municipalities M make it a requirement that Awards must be put on the municipal website so then one would have to actually consider that because we don't want a situation where then organs of state are then accused of not informing um the service providers well on time whereby they can be able to litigate decisions that have been taken um oops sorry oops what happened there right departures um departures now it's it's it's um I would think some sort of an exemption if you look at this in this section I found it very interesting as well the public procurement office May with or without condition authorize a departure from the provision of an instruction issued now I talked earlier about emergency and emergency was one of the categories of deviations one thing that I picked up on this um Act is that it's not outright in terms of deviations from normal procurement processes in the mfma space deviations are at the ACT level where the mfma outlines when an organ of State can deviate from normal SC process in the pfma space deviation are at the regulation level whereby the regulation outlines and then there were further instruction loads that guides on how can one deviate and within the deviation we used to even have categories of deviation emergency um Soul supplier um uh your animal for the zoo in terms of municipalities urgent and all all of that so now uh we don't have that in the act at the ACT level we only have emergency and that's it and then now we're talking about Departures departure from a instruction um whereby an organ of state may with or without condition authorized I mean a public procurement office can authorize a departure if it is Impractical to comply with the instruction you'll remember I spoke about local content local content when you request a waiver which is something similar you will request to the minister of trade and industry but this one is any other departure outside local content if it's impractical to comply with the instruction the marget condition or behavior do not allow for Effective application of the instruction or national security could be reasonably expected to be to be compromised so that's when you can actually request for a departure and one thing similar about this departure which one can sometimes may think that it's a deviation if you look at section four it further says if a departure is authorized in terms of sucession one the public procurement office must within 14 days inform the auditor general and publish the departure so what then happens is that if the office of the pre procurement officer gives you that exemption they need to inform um National treasury I mean General and also publish it but in terms of deviation another thing about deviation we SE touched a bit also on procurement methods deviation is a procurement method so um we are hoping that when we get to the regulation space uh when they look into procurement methods we will actually find deviation also maybe guiding us on how to deviate from normal sem U processes and I did talk about deviation now currently this is a snippet from regulation whereby in the regulation uh the ACT says actually the ACT said on the section of the regulation the ACT says that um the minister May prescrib a regulation on emergency procurement which may include different types of emergency procurement that may be used an outline of the planning efforts the prerequisite for awarding of beds and options available for the procuring institution but again this is only confining it to a definition of emergency and if you look at emergency we're talking about danger to life State security environment so any other thing like for buying electricity from escom water from a water entity or animals for the zoo works of works of arts and all of that um we'll see in terms of the procurement methods or the regulation how the minister will try to fit it in if not then maybe might be left on the organ of state to actually cater for in their policies instruction notes the SS now make it a requirement for the the office of the chief procurement officer which is the public procurement office or provincial treasury before making an instruction published I mean making that instruction they must publish a draft instruction a statement explaining the need for an intended operation of the instruction a statement of the expected impact of the instruction and a notice inviting sub submission in relation to the instruction and stating the form and manner in which the submissions are to be made so now that instruction note before it comes out it needs to be also taken out for public consultation for um those affected by instruction or even anyone in the in the in the industry can make comments on that and with each instruction the public procurement office or provincial treasury must publish a consultation report a consultation report referred to in paragra paragraph a must include the general account of the issued race on the submission Maze and response to the issues so basically if you've been following the way the procurement bill has been put together there are instances where um comments and com comments and inputs are made to the procurement Bill and National treasury had to actually respond to those comments that have been made so this is something similar H to how then the instruction notes will be done um I wonder how is that going to be managed in terms of now them dealing with all the inputs and everything or maybe the might have an instruction for a separate for different categories of procurement procuring institutions because that's another conversation that we have to say shouldn't there be also different categories of procuring institution whereby maybe escom being a the only sole supply of electricity could be categorized as a institution type A and then you will have instructions that will talk to escom and then in that way they might be able to manage this whole consultation report um um better and what will will guide The procuring Entity to determine what is to be set aside hope Tandy and Sean are taking note of that and then um I'll also take another question there it's um I think this one is addressed to Sean specifically thanks uh for the insightful presentation Sean a few question on my end can you outline the key changes this bill introduces compared to the existing legislation what are the expected economic impacts of the new procurement bill on local businesses in what ways will or does the bill aim to promote economic transformation and social equality oh it's a mouth what supporting mechanisms are in place or will be needed to help organization transition to the new requirement and then gnu a Hot Topic right now in South Africa will this have any any impact on the bill or the bill being pass and lastly how has feedback from various Stak holders influenced the current draft of the bill and that's addressed to Shan so I think let's take because this one is a lot let's take the two uh if Sean can answer this long one and then tandi can deal with the set aside so over to you uh tandi let's start with tandi then Sean okay T yeah okay um thank you uh doctor um the set site if you can look at the the bill it it's where it actually talks a lot to the black economic b b act triple be act actually so in that in that section it it talks to um the minister having to to to to identify those categories if you look at subsection 17 e it talks about the person referred to whom these contract can be set aside for there's a lot of them black people black women um sure there are many But to answer the question yes there would have to be a market analysis for that because the current challenge we're sitting with with the preferential procurement regulation is that the specific goals that we are having are not informed by data you know so you don't want a situation whereby you set aside something for people that don't exist so that will come back to Market and commodity analysis in terms of how it needs to be done but this paragraph Was set aside it talks more on the broad BAS bre economic empowerment act thank you thank you and um the the set aside provision it implies that market research will be done but it is explicitly described under the pre-qualification that market research must be done so it's U it's an interesting one in in in the act and and it's it's really because they're going to tear it they're going to have set asides at the small pre-qualification for bigger tenders subcontracting for bigger they're going to they're going to the intention is to tear it um I wonder I wonder if I could uh Dr MCO also just respond to Juliet's question um on how's it now and then move into you know the key changes question that s is asking so so right now we've got is that okay so we've got we've got five pieces of primary legislation so we've got we've got we've got our our constitution one of the few in the world where it mentions procurement and uh and then we've got five different pieces of legislation at least there's there's there's many more but but five and the it's um one that focuses on local government uh municipalities Metro metros District municipalities one that focuses on National provinal departments and public entities uh one that focuses on preferential procurement the mechanism for preferential procurement we've got another one that focuses on procurement for provincial legislatures and and Parliament and then we've got another one that focuses on construction now it's very fragmented and we have a lot of duplication between them we have some times we have complications and and uncertainty between them and so one of the big changes is that this will be replaced primarily there will still be some that will be left behind but primarily with one one act so primarily the the preferential procurement act the all the legislation under the PF and all the legislation under the mfma will be combined into one the the there will be two that will still be left but but but that will make a significant impact on the level of fragmentation that we've got in our legislation for public procurement what are the key changes well one of the key changes in that is there's a significant piece of legislation in the pfma that doesn't apply to a massive part of the public procurement community so um in the pfma there's a regulation called regulation 16a and 16a is where the detail is although it's only seven pages but it's as much detail as we have and that detail talks about things like bid committees and competitive bidding and piggybacking and transversal agreements and various things like that codes of conduct but that does not apply to to the the 1920 schedule 2 entities that we've got all the pfma schedule 3bs and 3DS the um Sab s's of the world and and the different water boards that we've got and and so one of the massive changes is that those entities that currently have very very little regulation that that governs them from the perspective they are going to have to now tow the line and fall into a much more regulated environment that we've got what are some of the key changes um some things that we've got in the new act which we don't have before is this this focus on methods and procedures it's it's not there there are three pieces of of four four pieces of of legislation currently which talks about bidding deviating from bidding piggybacking and transversal agreements and and that's it um and so we're moving into a world where every procurement process is going to have to have a method um and procedures that will be legislated massive change I'm not sure we understand what what that will bring of course very new is the tribunals we do not have a tribunal mechanism right now in South Africa so that will come in it is operational in casid in and that will be something that we will be able to see across the country um and then the big change on the preferential procurement policy framework where that framework now moves towards mechanisms which are internationally accepted such as set asides and pre-qualification UC ation compulsory subcontracting internationally accepted mechanisms for for preference have been brought into our mechanism now which we've not had before and and so that's new the change though will be that we will no longer have this premium mechanism that says we are prepared to pay a premium for Trans transforming the the uh suppliers that are out there because we recognize that the small uh family-owned business and the rural entity cannot compete price-wise for a massive conglomerate that that's listed on the New York Stock Exchange it's very difficult for them to compete unfortunately starting to answer one of your questions around the economic implications of this that mechanism of recognizing a premium is going to fall away but it will be replaced by this mechanism that says well we're going to be able to set aside and pre-qualify um those are those are some of them I I'm not going to get into into more I think your your question on the the economic social transformation so we've got now mechanisms that we've always been wanting is that ability to say hey this deal is just for black youth in our municipality we can bring locality into it we can bring all the demographics into we've never had that ability to do it um the only thing that we had in 2017 was on the triple be level hey you can only bid for this if you're triple be level one or level two and we know there are many organizations which are very let's talk race very white dominated that have got a level one on level two and so we weren't we weren't happy that we had the right kind of mechanisms we've got very powerful mechanisms now that s that will will help um with with this impact the gnu look I the the bull is sitting on the president's desk there's nothing stopping him signing it at any point in time he my understanding is and we've had a lot of discussion with the different legal people around around the country is he doesn't even have to go back to Parliament and say hey can I still sign this thing no it's there he has the prerogative he he can sign it at any point in time however should he say look I'm a little I I I see this bill is is great however I've got a concern here here and here and so what I'm going to do is there are a couple of options he can refer that if it's a constitutional issue he can refer that then to the Constitutional court and say hey constitutional Court I've got these constitutional questions here can you please resolve that for me so he has that's the one option the president has but it's not a GNU issue the other option is he might say look I've got these issues here let me refer it back to Parliament to sort these things out and make make us comfortable that these issues and these risks that I see in the bll can can be avoided or solved and I think that's where and that's why it will not go back to g i I do not think it's going to go back I think because we know the da said previously the um uh the da was the da there were a couple that said they do not support the bull in its current form that da is now part of the government of national Unity so I think it's going to be very difficult if president does send it back uh what um what use did the the feedback stakeholders have I I can tell you that it was very significant um I personally was involved in multiple sessions I uh presented to both um National Assembly also presents to the ncop um and they listen and National treasury listen um there were things in the bull that I was not happy with and I spoke and I had one-on-one discussions with treasury one one on many I was 91 there and all the treasury people there and uh to explain why I was unhappy with those things and they they understood and they recognized that and took those things out so there were were many and if you just look at um I think the original version of 2020 2020 February 2020 version was about 80 Pages it's now down to 35 that's not because treas just decided was because treas had feedback on a whole range of things and um and that feedback then was uh was taken to heart and there were changes some of the things they did not buy into and they stuck to their guns and that's still there and and I think that we will be able to manage those things from a regulation perspective but um I hope that answers a very long question very important question from s yeah thank you it was the longest one H looking at time I will ask that our speakers be precise on the following questions in responding to them and then son please note there is a request or a need for sharing the uh presentations as well as the recorded uh session so you can take that in as part of your closing and then I'll quickly take a few questions from the chat and for our speakers and we see how far we go we are left with 14 minutes but let's see what um can we cover in that regard one question says um one of the criticis of the ppb is that it makes reference to strategic souring but is silent about strategic procurement which is supposed to be the focus as that position the procurement slm function as such what's Sean's take on this then the next question um Talk to the reporting structures of uh supply chain procurement uh which is not addressed in the bill for it to report directly to the CEO so it's actually a remark so it's not a question and then the next question is are provinces also going to have their own procurement public procurement offices uh from my understanding this already exist but we can get clar ification in terms of that we do have uh offices of um procurement procurement which are based in the provinces under provincial treasuries um then we've got Juliet saying I am Juliet joining from Kenya I teach public procurement in Kenya and would like to know how was public procurement in South Africa regulated before this act then I'll take two more questions and then we can then get to answers um from Dr W based on Section 6A and section 6B of the procurement Bill what are the specific criteria and process for procuring institutions to submit a waiver request if the required quantity of goods cannot be wholly soured from local manufacturers or does not meet the designated local content threshold additionally how should the institution proceed if the responsible Minister does not respond to the waiver request within 30 days will the failure to honor the 30-day Turn Around by the minister impact the service delivery of the procurement function for potentially adding an additional layer of red tape in reference to section 2231 and 232 what measures can a procuring entity prescribe for supplier preference as a condition of the contract and how should future deliverables and Associated penalties be structured within the contract to ensure compliance and achievement of set Milestone by the supplier so I'll leave it at that Sean and Tandy and then let's uh be short on our answers so that we can take few more that are still there it's 19 minutes past uh 5 thank you over to you I'll I'll I'll quickly take one part and then sure take the other part um I think on the on the waiver I did indicate that if the minister does not respond in 30 days you assume that the the waiver has been granted so it it's there on on the ACT and then on the issue around section 231 in terms of uh those preference uh condition that you can put there one can can look into labor intensive project one can look into um um um job creation for locally local uh uh um communities it could be anything because the nice thing about um even the section on the set as side there's list of categories that are identified for preference and one can also look at those categories obviously being informed by Maran analysers if they are there you can actually Pro promote them and then lastly on the issue around provinces in terms of the office of the cheap procurement in the office in the provincial level we currently do have cpos in the provinces and the ACT still recognizes the provincial Treasury and still gives them authority to give instructions to orans of State thank you over to you Sean thanks very much Ronald your point on strategic sourcing strategic procurement as well well made um there were initial uh definitions in there many of us weren't happy with those definitions look I I think the we have a framework we have the starting point of our primary legislation yes we can pick holes in it and we can say this is missing this is not good and this is this is not great but we have something and this is going to in my in my understanding this is going to be approved and it will be something that we're going to work on going forward I think the message is that we now have an opportunity we have the framework we now have the opportunity to say what needs to be in the next level of our legislation what needs to be in the regulations and and I think it's going to be up to yourself Ronald and many of your colleagues in in sips and elsewhere to to start to describe what what do we mean by that and and how are we going to make that real because it refers to it but it doesn't really provide much Direction on how it's going to be achieved we're going to we we have to start to help National treasury put together the best set of regulations which the planet has ever seen in public procurement um the reporting structure very interesting it was in the previous version which was approved by National Assembly taken out in the ncop for the following reasons so what was approved by National Assembly was that um this procurement office in the public procurement office in the public in the procuring institution um did not have to report to the CFO if that was the implication of what it said there would be an office but it didn't say the office had to report to the CFO but we criticized that because there was no mechanism that allowed treasury to provide any more Direction on that point on the capacity the roles the responsibilities of that particular office and we said and and and so what what treasury did there he said let let's just not put anything in this act and we'll put the details in later so it's not it's not off the cards yet around the clarity of reportings to CFO or CEO or whatever makes sense for that particular institution that detail will come will come later um I think those those are the key ones quick responses yes thank you very much I'll just quickly then take the last few from the chat so that we can tackle the ones in the Q&A um Okay so we've got a question that a remark it seems the bill attempts to introduce uniformity in procurement for different organs of State however the bill does not enforce adoption model uh procurement policy what will be the purpose of procurement policies um play in individual organizations so that's one um question and then the next question is that what is the significance of changing the title of Chief procurement officer to head of procurement then we also have another question what is the significance of changing oh I've already touched on that with regards to standardization will the bill replace public entities having their own SC policies to avoid conflict or changes with um National treasury requesting next day compliance and then is the tribunal going to be housed at National treasury or are provinces going to establish theirs within the framework then few last questions uh section 36 and 37 no I think it's t was responding there how is the premium mechanism removed when such is an integral part of doing business with emerging suppliers for instance middle men they are not manufacturers nor have the liberty of bulk buying thus enjoying the benefit of economies of scale and then the last one from the charts is that with the act now articulating clearly the matter of procurement policy which makes provision for categories of preference for HDI on the basis of race gender or disability will it still be necessary to be seen to be implementing what triple be act calls the organs of State preferential procurement policy over to you uh Sean and Tandy anything want to pick up there yeah quick one on the on the tribunals tribunals will be established by the minister and as I did indicate about the panel the panel that is being referred to on the ACT is actually what tribunals will have they identify panels which could be at different provincial level whereby they will be catering so it's not going to be one tribunal that will cater for everything there will be different tribunals within different respective provinces but they are called panels and then whatever decision taken by that panel will be regarded as a decision taken by a tribunal and then on the on the on the issue around the premium removed um I don't think the premium is removed as yet we not sure about that however if you look at chapter four let's say for agreement say the premium is removed it is being replaced by cides by pre-qualifications and subcontracting because now remember even with the premiums as much as the premium was here was there 30 years later there still has not been really much transformation so now if you now decide to set aside and identify this group and get this group to compete among themselves either way you're going to have to you're going to give an award to that particular entity that's supposed to be promoted so sir we had engagement about whether the 8020 is gone yes or no we're not sure yet but even if it's gone set aside as well as pre-qualification are actually a replacement for that thank you well thanks thanks Tomy yes agree with you um look the the point on procurement policy is is there's recognition that that the institutions will have to develop a policy there's reference to model policies which may be developed by the off Chief procurement office by the by the public procurement office um but but what is very clear is that trasi will describe a framework at a national level for procurement and it will be up to then the different organs of state to put together that policy that system at the uh procuring institution level that will achieve that and um there there's no reference in there to policy and Sops and procedures and stuff like that that will certainly come through as as we go a quick quick one um your the O ocpo versus the um head of the public procurement office right now there is nothing leg legislation that refers to ocpo it's just something that we we refer to and we we know it's there but there isn't anything that in legislation that actually empowers it and says this is this is the ocpo and this is what the ocpo can cannot do now we've got a head of the public procurement office in legislation with specific roles and responsibilities we can now pack around that specific role responsibilities uh governance checks controls and things around that particular entity and and um you know it's it's not necessarily the name change but it's more the fact that it it is there I I I cannot see a mechanism in the framework for premium and I I agree with you I was disappointed when I saw that that was gone it started to disappear in the um the discussions with the National Assembly where there was there was push back from many parties to that premium idea um but but also push back because the focus of that meant that we'd have a a decision that would be made on the basis of price and and so we wanted to try and take that out um so I can't see a replacement mechanism currently current piece of legislation but I think as tundi says we've got to look at this holistically yes we're disappointed I'm disappointed that it's not there however it's being replaced with very powerful mechanisms of set aside and pre-qualification and I think they may be more effective than than the premium because we don't have to worry about a premium if we've said this this this particular contract is only for uh small businesses in this region right automatically those that would be able to compete on price are not included because they're going to be set aside they will not be part of the set aside so I think we've got to look at that we've got to start getting comfortable with what that might be going forward uh very interesting um the statement on the tripleb ACT uh section 10 101b of the ACT says that the organ state must um must apply any relevant code of good practice in the development and implementation of their preferential procurement policy now there's reference in the ACT throughout to the triple through the Public procur Act to the Triple B act but there's a statement in the triple in the in the prefer in the public procurement act that is a trumping Clause that said if there's anything out there that contradicts with what we've got in this ac