Focus on: National Treasury Standard for …

1 February 2016 . Focus on: National Treasury Standard for Infrastructure procurement and delivery management National Treasury National Treasury A thriving economy, which manifests as a happy civil society, is underpinned by sound infrastructure. February 2016 Focus on: National Treasury Standard for Infrastructure procurement and delivery management Foreword 2. Focus on: National Treasury Standard for Infrastructure procurement and delivery management Comments from the CBE and CIDB on the SIPDM 4. 5. National Treasury National Treasury The Civilution Forum welcomes the publication of the SIPDM . Accelerating infrastructure delivery .

2 Improving the quality of life. An overview of the Standard for Infrastructure procurement National Treasury 's Standard for and delivery management 9. Infrastructure procurement and delivery management , which was published in November 2015, heralds the dawn of The separation of the supply chains for general goods and an encouragingly fresh approach to the planning, design, procurement and services from those for infrastructure 13. execution of infrastructure projects. Value for money in infrastructure delivery 17. Control framework for the planning, design and execution PUBLISHED BY SAICE. of infrastructure projects 23.

3 Block 19, Thornhill Office Park, Bekker Street, Vorna Valley, Midrand Private Bag X200, Halfway House, 1685 Guidance for client and delivery teams 32. Tel 011 805 5947/8, Fax 011 805 5971. | CIVILUTION FORUM (CURRENT COMPOSITION). Guidance on portfolio, programme and project management 38. Consulting Engineers South Africa (CESA). Concrete Society of Southern Africa (CSSA). Institute of Municipal Engineering of Southern Africa (IMESA). Southern African Asset management Association (SAAMA). Promoting social and economic objectives through procurement 44. South African Council for the Project and Construction 49.

4 management Professions (SACPCMP). South African Forum of Civil Engineering Contractors (SAFCEC) procurement strategy . South African Institution of Civil Engineering (SAICE). South African Institute of Electrical Engineers (SAIEE). Southern African Institute for Industrial Engineering (SAIIE). Southern African Institute of Steel Construction (SAISC). Framework agreements 56. South African Road Federation (SARF). The Concrete Institute (TCI). In collaboration with National Treasury and the Infrastructure procurement system 61. School of Construction Economics and management , University of the Witwatersrand DESIGN AND REPRODUCTION.

5 Infrastructure contracts and contract management 69. Marketing Support Services, Ashlea Gardens, Pretoria PRINTING. Fishwicks, Pretoria procurement documents for infrastructure projects 75. CIVILUTION CONTACT. Steven Kaplan Approaches to dealing with functionality and quality in the 82. Tel 011 805 5947/8 evaluation of tender offers . National Treasury Standard FOR INFRASTRUCTURE. procurement AND delivery management . Foreword DURING NOVEMBER 2015, in support of the separation of the supply chain for infrastructure procurement and delivery management from that for general goods and services, National The issuing of the Treasury Instruction in terms of the PFMA.

6 And the issuing of the circular for the Model SCM Policy for Infrastructure procurement and delivery management establish Treasury issued the following two documents: a common approach to infrastructure delivery across all organs of An instruction in terms of Section 76(4)(c) of the Public state in all spheres. Finance management Act of 1999 (Act 1 of 1999) (PFMA), There is a relationship between socio-economic growth, which requires the implementation of the Standard for development and infrastructure delivery . The delivery of basic Infrastructure procurement and delivery management public services depends as much on the people and the institutions (SIPDM) by all organs of state subject to the PFMA, with effect delivering the services as on the physical works they use.

7 It is not from 1 July 2016 . enough just to have money. It is one thing to build a clinic, but A Model Supply Chain management (SCM) Policy for quite another to build the right clinic within budget, on time and Infrastructure procurement and delivery management in to the required quality, and be able to maintain it. terms of Section 168 of the Municipal Finance management A study by government was undertaken during 2002 to Act of 2003 (Act 56 of 2003) (MFMA) in support of the determine the issues and gaps in the delivery of infrastructure. MFMA SCM Regulation 3(2) as a National Treasury guideline This study reported that there was a shortfall in effective and determining standards for municipal SCM policies.

8 Systematic delivery systems, as well as a shortage of skills. In 2004. The implementation of the National Treasury Standard for the Infrastructure delivery Improvement Programme (IDIP). Infrastructure procurement and delivery management forms was established as a partnership between National Treasury , an integral part of the Model SCM Policy issued in terms of the Construction Industry Development Board (CIDB), the the MFMA. The issuing of the Model SCM Policy accordingly Department of Public Works (DPW) and the Development Bank enables implementation of the SIPDM through the MFMA. of Southern Africa (DBSA) to establish a capacity building pro- The SIPDM establishes control frameworks for the planning, gramme dealing with failures across provincial departments.

9 It design and execution of infrastructure projects and infrastruc- was within this programme that the concept of the Infrastructure ture procurement ; requirements for a number of matters as ap- delivery management System (IDMS) was birthed and informed plied to the supply chain management system for infrastructure by the answers to questions posed to projects, namely is it suit- procurement and delivery management ; and minimum require- able, is it feasible, is it credible and does it deliver value for money? ments for infrastructure procurement . This Standard enables In 2006 the IDMS was implemented in the Education Sector and the separation of the supply chain management requirements the following year it was piloted in the Health Sector.

10 For general goods and services from those for infrastructure. In 2011 the National Planning Commission published a detailed Underlying the separation of the supply chains is the notion diagnostic report that set out the key challenges that confront South that the effective and efficient functioning of the supply chain Africans in fighting poverty and inequality and in achieving the management system for infrastructure procurement and delivery Constitutional objectives. The implicit conclusion of this report management will realise value for money and good-quality ser- was that a business-as-usual approach will result in South Africa vice delivery .