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Africa's Public Procurement & Entrepreneurship Research Initiative – APPERI

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SA sets up infrastructure to verify local-content claims


Engineering News

July 5, 2013

A new technical instrument has been introduced to support South Africa’s strategy of increasing the level of local content in the goods and services procured by government and State-owned entities and to add impetus to the country’s re-industrialisation efforts.

The tool in question is a South African Technical Specification (SATS) 1286, which will be administered by a new Local Content Verification Office housed within the South African Bureau of Standards (SABS).

Trade and Industry Minister Dr Rob Davies, who presided over the official launch on Friday, says SATS 1286 sets objective criteria for the issuance of an audited ‘Local Content Certificate’.

The verification process follows on from the initial ‘designation’ of products and services that are required to incorporate minimum thresholds of local content before they can be procured by national and provincial State departments, municipalities and State-owned companies. The requirement is supported by updated Preferential Procurement Policy Framework Act (PPPFA) regulations, issued in December 2011.

The current thresholds range from 100% for textile, clothing and footwear procured for government-issued uniforms to 30% for digital television set-top boxes. But Davies stressed that these thresholds should be regarded as a “floor rather than a ceiling”.

The initial designations announced by the Department of Trade and Industry (DTI) cover rail rolling stock, electrical pylons, textile, clothing and footwear, canned or processed vegetables, some oral solid-dose pharmaceutical products, digital television set-top boxes, furniture, solar geysers and power and telecommunications cables.

But further rounds of designations will be introduced in future, following research and consultations.

SABS CEO Boni Mehlomakulu says the infrastructure is in place for the organisation to conduct the verification process, which will be required only for entities that win government tenders.

The process involves a self-assessment by the company that is delivered to the SABS in the form of a local content-declaration. A team of auditors then conducts an analysis of the documentation to verify the declaration, which is followed but a factory visit by a separate team of auditors. A consolidated document is then sent through to an approval board, which makes a final recommendation to the CEO, who issues the verification certificate. The costs of the process will be born by the winning bidder.

Mehlomakulu believes that multi-step process, which involves separate teams of auditors, has materially reduced the potential for fraud and corruption, but stresses that the SABS also operates an ethics hotline should an individual have concerns. The objective criteria employed also reduce scope for discretion, which tends to contaminate the administration of regulations.

Davies argues that there is significant potential to increase the domestic job creation around government procurement generally and also the multibillion-rand public infrastructure programme. However, without mechanisms to verify local-content claims the impact of ‘buy local’ initiatives could be diluted.

“We now have a standard and the infrastructure in place to verify,” he says, adding that breaches could lead to penalties and even the cancellation of contracts.

 

Kigali to host East African Procurement Forum


AllAfrica
24 October 2011

KigaliRwanda will early next month host the fourth East African Procurement Forum (EAPF), which will bring together about 200 participants from all members states of the regional bloc.The EAPF is held annually on a rotational basis starting from 2008, and the theme for this year is; “Improving the Efficiency of Public Procurement in East African Community for Economic Growth.

It is expected to bring together various players from member states to discuss and come up with plans to develop a mutually agreed public procurement policy in the bloc.

“All actors in public procurement will have chance to discuss several issues involved; they are also expected to come up with strategies to boost public procurement in EAC, as a single bloc.” Said Augustus Seminaga, head of the Rwanda Public Procurement Authority (RPPA

He added that though it is currently possible for any entrepreneur from any of the EAC member state to win a tender in another partner country, there was still need for formulating uniform procedures to address issues like corruption in the tendering processes.

Christophe Nzakamwita, the Director of the Auditing and Monitoring Unit at RPPA, added that Rwanda had achieved a lot in containing graft in public procurement which is a major issue, though statistics were not readily available by press time.

He further explained that most of the few claims of graft are filed by some disgruntled bidders who resort to trading fictitious allegations after failing to fulfil the required conditions.

“Some entrepreneurs don’t present complete requirements and blame tender boards for being corrupt when they fail to make it through,” he said.

“Otherwise, Rwanda has achieved a lot in curbing corruption for the past years, especially due to the strict monitoring by the RPPA, along with the Auditor General’s office”.

Seminega added that RPPA is conducting a series of trainings for bidders in all provinces to increase their skills, and generally boost the sector.

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