ANNEXURE 10 DIRECTIVE FOR DEVIATIONS FROM …

1 ANNEXURE 10 DIRECTIVE FOR DEVIATIONS FROM THE NORMAL SCM PROCESSES 1. PURPOSE OF THE DIRECTIVE To ensure that DEVIATIONS from the Supply Chain Management (SCM) Policy and its directives is done in a controlled manner within Mogale City Local Municipality. To ensure that Emergency Purchases are managed according to the approved process. 2. SCOPE OF THE DIRECTIVE This DIRECTIVE is applicable throughout the Municipality and all officials involved in the Council s SCM activities must observe provisions of this DIRECTIVE . 3. DEFINITIONS An emergency is defined as an unexpected and sudden event that must be dealt with urgently as the situation may give rise to: Threats to human life or safety.

2 Threats to interruptions in the provision of essential services to customers. The threat of major expense to MCLM. The Accounting Officer of a municipality is the Municipal Manager. 4. ROLES AND RESPONSIBILITIES The Accounting Officer is responsible for the implementation and revision of this DIRECTIVE . The Accounting Officer is responsible for the approval of all DEVIATIONS from normal procurement processes for purchases from R 30 000 (including VAT). This includes DEVIATIONS from advertising on the website for 7 days (R 30 000 to R 200 000) and embarking on a tender process (R 200 000 and more).

3 All DEVIATIONS from the official tender process (R 200 000 and more) should first be discussed with the relevant MMC and the Executive Manager, before approval by the Accounting Officer. The Heads of Departments (Executive Managers) are responsible for the approval of all DEVIATIONS from normal procurement processes for purchases between R 2 000 and R 30 000. The reasons for not being able to obtain three quotations must be recorded and reported quarterly to the Accounting Officer by the relevant Head of Department (to be co-ordinated by the SCM Unit).

4 The Heads of Departments (Executive Managers) must ensure that all officials adhere to the provisions of this DIRECTIVE . That a 1% Corporate Social Responsibility contribution be levied on all payments made to service providers appointed in terms of a deviation that is not Mogale based (expenditure in excess of R 200 000). 5. DEVIATIONS FROM PROCUREMENT PROCESSES (SECTION 36 OF SCM POLICY) The Accounting Officer may dispense with the official procurement processes established by the SCM Policy and grant approval for the procurement of goods or services through any convenient process, which may include price negotiations and price quotations, BUT ONLY: In an emergency.

5 (Refer to 3 above). In instances of emergencies where immediate action is required in order to avoid dangerous or risky situations or misery or disaster such as floods or fires. When the goods, services or works are produced or available from only one single provider and no reasonable alternative or substitute exists. Proof of the sole supplier status needs to be provided. For the acquisition of special works of art or historical objects where specifications are difficult to compile. Acquisition of animals for nature reserves and game reserves.

6 In any other exceptional case where it is impractical or impossible to follow the official procurement processes: The reason why it is impractical or impossible to go out on tender must be stated and the motivation must be found valid by the Accounting Officer, It must be shown that the provider chosen was undertaken in a fair manner as not to prejudice other potential providers, and The Accounting Officer must be able to adequately account for making such a decision. If a deviation has to be resorted to, it has to be consistent with the definition of an emergency as defined in and above or be justifiable in terms of above.

7 A deviation must not be resorted to as a consequence of inadequate or bad planning. Any official responsible for procurement under these circumstances will be held accountable therefore. 6. EMERGENCY PURCHASES Where an emergency arises, the most senior MCLM official available decides on the action needed to mitigate the threat. Where procurement of goods or services is involved, he/she takes the needed action, and within one working day informs the relevant Executive Manager and Accounting Officer (if so required in terms of delegated powers) of the action taken and provide the necessary information regarding the emergency.

8 The relevant department must liaise with the SCM Unit for advice prior to engaging the service provider. If the emergency resulted in a deviation from the normal procurement processes, then ratification must be obtained from the Accounting Officer. Emergency situations must be eliminated where possible by taking preventative measures. 7. RATIFICATION OF MINOR BREACHES OF PROCUREMENT PROCESSES The Accounting Officer may ratify any minor breaches of the procurement process by an official or committee acting in terms of delegated powers which are purely of a technical nature.

9 8. REPORTING TO COUNCIL The Accounting Officer must record the reasons for deviation from the official procurement processes in terms of 5 above, as well as any ratification of minor breaches of the procurement processes in terms of 7 above, and report it to the next meeting of Council and include it as a note to the Annual Financial Statements. RECOMMENDATIONS 1. That the Finance Portfolio takes note of the DIRECTIVE for DEVIATIONS from the normal Supply Chain Management Processes as issued by the Finance Department. 2. That this DIRECTIVE for DEVIATIONS be read in conjunction with Section 36 of the Supply Chain Management Policy of Council.

10 3. That the Finance Portfolio recommends to the Mayoral Committee that the DIRECTIVE for DEVIATIONS be approved.