ETHEKWINI MUNICIPALITY: SUPPLY CHAIN …

1 ETHEKWINI municipality : Revised SCM policy V8/June/2017 Page 1 of 153 ETHEKWINI municipality : SUPPLY CHAIN management policy , 2017 Adopted by Council on: 28/06/2017 ETHEKWINI municipality : Revised SCM policy V8/June/2017 Page 2 of 153 Table of Contents policy REVIEW management INFORMATION 6 CONTACT PERSON 6 HEAD SCM: ANDRE PETERSEN 6 APPROVAL AUTHORITY 6 ETHEKWINI municipality COUNCIL OR EXECUTIVE COMMITTEE 6 LAST DATE OF APPROVAL (PHASE 1) V7 6 31 MAY 2016 6 REVIEW DATE (PHASE 2) V8 6 03 OCTOBER 2016 6 REVIEW APPROVAL DATE 6 DATE OF NEXT REVIEW 6 30/06/2018 6 PREAMBLE 7 PURPOSE 7 PROBLEM STATEMENT 8 1.

2 DEFINITIONS 9 2. SUPPLY CHAIN management policy 20 ETHEKWINI municipality : Revised SCM policy V8/June/2017 Page 3 of 153 3. ADOPTION AND AMENDMENT OF THE SUPPLY CHAIN management policy 22 4. DELEGATION OF SUPPLY CHAIN management POWERS AND DUTIES 23 5. SUB DELEGATIONS 24 (7) NO SUPPLY CHAIN management DECISION MAKING POWERS MAY BE DELEGATED TO AN ADVISOR OR CONSULTANT. 25 6. OVERSIGHT ROLE OF COUNCIL 25 7. SUPPLY CHAIN management UNIT 26 8. TRAINING OF SUPPLY CHAIN management OFFICIALS 26 9. FORMAT OF SUPPLY CHAIN management 27 10. SYSTEM OF DEMAND management 27 11. SYSTEM OF ACQUISITION management 28 12.

3 RANGE OF PROCUREMENT PROCESSES 30 13. GENERAL PRECONDITIONS FOR CONSIDERATION OF WRITTEN QUOTATIONS OR BIDS 30 14. LISTS OF ACCREDITED PROSPECTIVE PROVIDERS 31 15. PETTY CASH PURCHASES 32 16. WRITTEN OR VERBAL QUOTATIONS 32 17. FORMAL WRITTEN PRICE QUOTATIONS 33 18. PROCEDURES FOR PROCURING GOODS OR SERVICES THROUGH WRITTEN OR VERBAL QUOTATIONS AND FORMAL WRITTEN PRICE QUOTATIONS 34 19. COMPETITIVE BIDDING PROCESS 35 20. PROCESS FOR COMPETITIVE BIDDING 36 ETHEKWINI municipality : Revised SCM policy V8/June/2017 Page 4 of 153 21. BID DOCUMENTATION FOR COMPETITIVE BIDS 36 22. PUBLIC INVITATION FOR COMPETITIVE BIDS 39 23.

4 PROCEDURE FOR HANDLING, OPENING AND RECORDING OF BIDS 40 24. NEGOTIATIONS WITH PREFERRED BIDDERS 40 25. TWO-STAGE BIDDING PROCESS 41 26. COMMITTEE SYSTEM FOR COMPETITIVE BIDS 42 27. BID SPECIFICATION COMMITTEE 43 28. BID EVALUATION COMMITTEE 44 29. BID ADJUDICATION COMMITTEE 46 30. PROCUREMENT OF BANKING SERVICES 48 31. PROCUREMENT OF IT RELATED GOODS OR SERVICES 49 32. PROCUREMENT OF GOODS AND SERVICES UNDER CONTRACTS SECURED BY OTHER ORGANS OF STATE 50 33. PROCUREMENT OF GOODS NECESSITATING SPECIAL SAFETY ARRANGEMENTS 50 34. PROUDLY SA CAMPAIGN 51 35. APPOINTMENT OF CONSULTANTS 51 36. DEVIATION FROM, AND RATIFICATION OF MINOR BREACHES OF, PROCUREMENT PROCESSES 52 37.

5 UNSOLICITED BIDS 56 38. COMBATING OF ABUSE OF SUPPLY CHAIN management SYSTEM 59 39. LOGISTICS management 61 40. DISPOSAL management 64 ETHEKWINI municipality : Revised SCM policy V8/June/2017 Page 5 of 153 41. RISK management 67 42. PERFORMANCE management 67 43. PROHIBITION ON AWARDS TO PERSONS WHOSE TAX MATTERS ARE NOT IN ORDER 68 44. PROHIBITION ON AWARDS TO PERSONS IN THE SERVICE OF THE STATE 69 45. AWARDS TO CLOSE FAMILY MEMBERS OF PERSONS IN THE SERVICE OF THE STATE 69 46. ETHICAL STANDARDS 69 47. INDUCEMENTS, REWARDS, GIFTS AND FAVORS TO MUNICIPALITIES OR MUNICIPAL ENTITIES, OFFICIALS AND OTHER ROLE PLAYERS 72 48.

6 SPONSORSHIPS 72 49. OBJECTIONS AND COMPLAINTS 73 50. RESOLUTION OF DISPUTES, OBJECTIONS, COMPLAINTS AND QUERIES 73 51. CONTRACTS PROVIDING FOR COMPENSATION BASED ON TURNOVER 74 52. PREFERENTIAL PROCUREMENT 75 53. PERFORMANCE MONITORING OF SERVICE PROVIDERS 83 54. GREEN PROCUREMENT 88 55. AMENDMENTS TO CONTRACTS MFMA SECTION 116(3) 91 56. BLACKLISTING 94 57. municipality CONTRACTING WITH ANOTHER ORGAN OF STATE MFMA SECTION 110 99 58. SPECIAL DEVIATIONS FROM SCM policy 100 Annexure 1 - list of Public Institutions 103 ETHEKWINI municipality : Revised SCM policy V8/June/2017 Page 6 of 153 Annexure 2- Land Alienation policy Annexure 3- Letting policy Annexure 4- Inventory policy policy REVIEW management INFORMATION Contact Person Head SCM: Andre Petersen Approval Authority ETHEKWINI municipality Council OR Executive Committee Last date of approval (Phase 1) V7 31 May 2016 Review Date (Phase 2) V8 03 October 2016 Review Approval date 28/06/2017 Date of next review 30/06/2018 ETHEKWINI municipality .

7 Revised SCM policy V8/June/2017 Page 7 of 153 PREAMBLE Section 111 of the Municipal Finance management Act requires each municipality and Municipal entity to adopt and implement a SUPPLY CHAIN management policy , which gives effect to the requirements of the Act. In addition, the Preferential Procurement policy Framework Act requires an Organ of State to determine its Preferential Procurement policy and to implement it within the framework requirement is given effect in section 52 of this policy . The ETHEKWINI municipality is further committed to combating fraud, corruption, favoritism and irregular practices in SUPPLY CHAIN management by blacklisting persons who have been found to have engaged in such practices.

8 This is the SUPPLY CHAIN management policy of ETHEKWINI municipality PURPOSE The purpose of this policy is : (a) to implement a SUPPLY CHAIN management system in accordance with Section 217 of the Constitution which is fair, equitable, transparent, competitive and cost effective; (b) to provide for procedures and processes for the procuring of goods, services or works ; (c) to provide for procedures and processes for the disposal of goods no longer needed ; (d) to provide for procedures and processes for the selection of contractors to provide assistance in the provision of municipal services other than where Chapter 8 of the Municipal Systems Act applies ; (e) to provide for provision of municipal services through a service delivery agreement with a natural or juristic person which is not an organ of state ; (f) to ensure consistency with other applicable legislation and regulations thereto ; (g) to give effect to the Preferential Procurement policy objectives of the municipality .

9 (h) to ensure optimal service delivery by facilitating effective and efficient procurement; ETHEKWINI municipality : Revised SCM policy V8/June/2017 Page 8 of 153 (i) to combat fraud, corruption favouritism and irregular practices in SUPPLY CHAIN management by blacklisting persons who have been found to have engaged in such practices; (j) to create a Blacklisting Committee to implement the provisions of this policy ; (k) to specify guidelines to prevent the municipality from doing business with persons who abuse the SUPPLY CHAIN management system by engaging in unlawful and/or irregular practice(s); (l) to specify guidelines that will prevent the municipality from doing business with persons who default on performance willfully or negligently; (m) to develop uniform criteria and a fair process for blacklisting such persons.

10 (n) to discourage persons who are blacklisted from re-entering the procurement arena by setting up new business entities and by using the existing business entities to tender for the public sphere of work, during the period which they are blacklisted; (o) to give the municipality power to deregister blacklisted persons from its suppliers database; (p) to create a database of persons who are blacklisted and to publish the list on the municipality s website so as to expose and publicise the identity of the blacklisted person; and (q) to deal with the conduct of officials who are found to have engaged in unlawful and/or irregular practices together with such persons, to be dealt with in terms of internal disciplinary procedure.