POLICY, PROCESSES AND PROCEDURES

1 Page 1 SUPPLY CHAIN MANAGEMENT POLICY, PROCESSES AND PROCEDURES Page 2 RECOMMENDED THAT the Supply Chain Management Policy and the contents thereof be tabled for approval at the Mayoral Committee. Version Version Date April 2015 Document Name Supply Chain Management Policy and PROCEDURES Reviewed By Date: INTERNAL AUDITOR Supported By Date: CHIEF FINANCIAL OFFICER Signature Date: MUNICIPAL MANAGER Adopted by the Mayoral Committee Date: CHAIRPERSON Approved by the Council Date: RESOLUTION Effective date .. Next revision date .. Page 3 Contents CHAPTER 1: ESTABLISHMENT AND IMPLEMENTATION OF THE SUPPLY CHAIN MANAGEMENT POLICY.

2 6 PART 1: Supply Chain Management Policy .. 6 1. Review Of The Policy .. 6 2. Distribution Of The Policy .. 6 PART 2: Terminology .. 7 1. Abbreviations .. 7 2. Definitions And Abbreviations .. 8 PART 3: Purpose ..16 PART 4: Application Of This Policy ..16 PART 5: SCM Strategic PART 6: Procurement Principles ..18 PART 7: Applicable Legislation ..21 PART 8: Delegations ..22 PART 9: Oversight ..23 PART 10: Establishment Of The SCM Unit ..23 1. The SCM System .. 23 2. SCM Unit .. 26 3. Training Of SCM Officials .. 26 4. Communication With The SDM .. 26 5. Availability Of Supply Chain Management Policy .. 27 CHAPTER 2: SUPPLY CHAIN MANAGEMENT FRAMEWORK ..27 PART 1: Demand Management System.

3 27 1. Introduction .. 27 2. Steps To Be Implemented For Effective Demand Management System.. 28 3. Major Activities .. 31 PART 2: Acquisition Management System ..34 1. Introduction .. 34 2. Range Of Procurement PROCESSES .. 35 3. General Pre-Conditions Applicable To Bids And Quotations .. 42 4. List Of Accredited Prospective Suppliers .. 44 5. Petty Cash Purchases (R0-01 To R 1000-00) .. 48 6. Written Quotations (R1000-01 To R 2000) .. 49 7. Formal Written Price Quotations (R1000-01 To R 30 000) .. 49 Page 4 8. PROCEDURES For Procuring Goods Or Services Through Written Quotations And Formal Written Price Quotations (R30 000-01 To R200 000-00).. 50 9.

4 Competitive Bids (Above R200 000-01) .. 51 10. Process For Competitive Bidding .. 52 11. Compilation Of Bid Documentation .. 52 12. Public Invitation For Competitive Bids .. 55 13. Procedure For Handling, Recording And Opening Of Bids .. 60 14. Negotiation With Preferred Bidders .. 64 15. Two Stage (Prequalification) Bidding Process .. 64 16. Two Envelope System .. 65 17. Committee System For Competitive Bids .. 66 18. Bid Specification Committee .. 66 19. Bid Evaluation Committee .. 68 20. Bid Adjudication 75 21. Notifying Successful/Unsuceful Bidders .. 77 22. Publication Of Names Of Bidders In Respect Of Advertised Competitive Bids, Above Threshold Value Of R200 000 (All Applicable Taxes Included).

5 78 23. Acquisition Of Goods Or Services From Other Organs Of State Or Public Entities 79 24. Acquisition Of Goods And Services Under Contracts Secured By Other Organs Of State.. 79 25. Acquisition Of Banking Services .. 80 26. Acquisition Of It Related Goods Or Services.. 80 27. Acquisition Of Goods Necessitating Special Safety Arrangements.. 81 28. Proudly South African Campaign .. 81 29. Appointment Of Consultants .. 81 30. Public-Private-Partnerships .. 82 31. Publications In Newspapers .. 82 32. Alternative Bids .. 82 33. Unsolicited Bids .. 83 34. Deviation From, And Ratification Of Minor Breaches Of The Bid PROCESSES .. 84 35. Condonation Of Expenditure.

6 87 36. Obligation To Report .. 87 37. Combating Abuse Of The Supply Chain Management Policy .. 88 PART 3: Meetings, Minutes, Records And Thresholds ..89 1. Meetings .. 89 Page 5 2. Notice Of Meetings .. 90 3. Non Attendance .. 91 4. Minutes Keeping .. 91 5. Decision Making .. 91 6. Confidentiality .. 92 7. Declaration Of Interest .. 92 8. Attendance .. 93 9. Code Of Conduct .. 93 PART 4: Logistics, Disposal, Risk And Performance Management System ..93 1. Logistics Management .. 93 2. Disposal Management 97 3. Risk Management .. 98 4. Performance Management .. 99 5. Contract Management .. 101 PART 5: Other Matters .. 107 1. Prohibition On Awards To Persons Whose Tax Matters Are Not In Order.

7 107 2. Prohibition On Awards To Persons In The Service Of The State .. 107 3. Awards To Close Family Members Of Persons In The Service Of The State .. 108 4. Ethical Standards .. 108 5. Inducement, Rewards, Gifts And Favours To Municipalities, Officials And Other Role Players .. 109 6. Sponsorships .. 110 7. Objections And Complaints .. 110 8. Resolution Of Disputes, Objections, Complaints And Queries .. 110 2 Conflict of interest .. 115 3 Accountability .. 115 4 Openness .. 116 5 Confidentiality .. 116 Page 6 CHAPTER 1: ESTABLISHMENT AND IMPLEMENTATION OF THE SUPPLY CHAIN MANAGEMENT POLICY PART 1: Supply Chain Management Policy 1.

8 Review Of The Policy The CFO will be the official responsible for implementation of this policy. The implementation of this policy must be reviewed at least annually to ensure that it is aligned with the legislative environment. When deemed necessary on an ad hoc basis, the CFO must submit proposals for the amendment of the policy to Council through the relevant structures. If the CFO submits proposed amendments to the Council that differ from the model policy issued by National Treasury, the CFO must- Ensure that, such proposed amendments comply with the Regulations. Report any deviation from the model policy to National Treasury and the relevant Provincial Treasury.

9 2. Distribution Of The Policy All changes must be distributed to all the role players. All recipients are to sign for receipt of the documentation. After changes have been made, updated hard copies (and electronic copies) must be sent at least to the following parties: Finance Portfolio Committee (Sub-committee of Council); Accounting Officer; Chief Operations Officer; Chief Financial Officer; All Executive Directors; and All MANCO members. Page 7 PART 2: Terminology 1. Abbreviations AO Accounting Officer BBBEEA Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2000). BEE Black Economic Empowerment CFO Chief Financial Officer CFST Cross Functional Sourcing Team CIDB Construction Industry Development Board CPIC Companies and Intellectual Property Commission DTI Department of Trade and Industry GCC General Conditions of Contract IDP Integrated Development Plan MBD Municipal Bidding Document MFMA The Local Government: Municipal Finance Management Act, 2003 (Act No.)

10 56 of 2003). PALAMA Public Administration Leadership and Management Academy PPPFA Preferential Procurement Policy Framework Act, 2000 (Act No. 5 of 2000) SARS South African Revenue Services SCM Supply Chain Management SCMU Supply Chain Management Unit SDBIP Service Delivery and Budget Implementation Plan SDM Sedibeng District Municipality SITA State Information Technology Agency SLA Service Level Agreement SMME Small, Medium and Micro Enterprise TOR Terms of Reference VAT Value Added Tax Page 8 2. Definitions And Abbreviations In this Supply Chain Management Policy, unless the context otherwise indicates, a word or expression to which a meaning has been assigned in the Act has the same meaning as in the Act, and- Accountability Means the personal responsibility of a person to his senior or higher authority for any act or omission in the execution of his assigned duties (Accountability cannot be delegated).