SUPPLY CHAIN MANAGEMENT POLICY …

1 0 SUPPLY CHAIN MANAGEMENT POLICY JOHANNESBURG DEVELOPMENT agency (JDA) 1 Date of adoption: The JDA Board of Directors resolves in terms of section 111 of the Local Government: Municipal Finance MANAGEMENT Act 56 of 2003, as amended, to adopt the following as the SUPPLY CHAIN MANAGEMENT POLICY of the JDA. APPROVED: _____ _____ JDA Exco Date APPROVED: _____ _____ JDA Audit Committee Date APPROVED: _____ _____ JDA Board Date 2 1. PURPOSE The purpose of this document is to set forth the POLICY of the Johannesburg Development agency with respect to SUPPLY CHAIN MANAGEMENT processes and procedures, as well as related contractual agreements entered into by all business units, and ensure the efficient and uniform acquisition of works, goods, services, and other products with natural and/or legal entities; and to provide for the documentation to support such decisions.

2 2. POLICY STATEMENT It is the Johannesburg Development agency s POLICY to seek out and procure suitable quality products and services in a competitive, fair, transparent, equitable and cost effective manner, and to select service providers consistent with applicable legislation, including but not limited to the following: (i) Constitution of the Republic of South Africa; (ii) Preferential Procurement POLICY Framework Act (PPPFA); (iii) Municipal Finance MANAGEMENT Act (MFMA); (iv) Construction Industry Development Board Act (CIDBA); (v) Broad-based Black Economic Empowerment Act (BBBEE); 3. POLICY OBJECTIVES The main objectives of this POLICY are to: (i) Comply with the provisions of the MFMA and other applicable legislation; (ii) Ensure goods and services are acquired competitively, fairly, transparently; equitably and cost effectively; (iii) Promote the empowerment of previously disadvantaged enterprises, including SMMEs; (iv) Minimize fraud and corruption and encourage accountability.

3 (v) Is consistent with the enterprise development programmes as approved by the City which are not limited to Expanded Public Works Programme (EPWP), Jozi@work, Enterprise Development Programme and Corporate Social Investment job pathway and other policies and programmes that seeks to aggressively advance the empowerment of the SMMEs and previously disadvantaged communities; (vi) Is consistent with the Preferential Procurement Regulations 2011. 4. PRINCIPLES FOR MEASURING SUCCESS The guiding principles for measuring the success of the SUPPLY CHAIN MANAGEMENT objectives are the: (i) preservation of the highest standard of ethical behaviour; (ii) selection of suppliers through a process that is competitive, fair, transparent and cost effective; 3 (iii) empowerment of SMMEs and enterprises that comply with the provisions of Broad-Based Black Economic Empowerment and codes of good practice; (iv) creation of employment and skills development opportunities; and (v) improvement of stakeholder value.

4 (vi) Ensure goods and services are acquired competitively, fairly, transparently; equitably and cost effectively; 4 Table of Contents Part 1 Definitions and Background .. 6 1. Definitions .. 6 2. Regulatory Framework .. 10 3. Applicability of the SUPPLY CHAIN MANAGEMENT POLICY .. 10 4. Adoption and Amendment of this POLICY .. 11 5. Oversight Role of the Board of Directors .. 11 6. Responsibilities of the Accounting Officer .. 13 7. Responsibilities of JDA Officials .. 13 8. Responsibilities of Bidders .. 14 9. Delegation of SUPPLY CHAIN MANAGEMENT Powers and Duties .. 15 Part 2 Acquisition MANAGEMENT .. 16 Section A: General .. 16 10. Range of Procurement Goods .. 16 11. General 16 12. Lists of Accredited Prospective Providers.

5 17 13. Panel of Consultants .. 18 14. General Procurement Procedures for Written and Verbal Quotations .. 18 Section B: Quotation System (R2,000 R200,000) .. 19 16. Written or Verbal Quotations .. 19 Section C: Competitive bids (>R200,000) .. 20 17. Bid Documentation for Competitive Bids .. 20 18. Public Invitation for Competitive Bids (Advertisements) .. 21 19. Procedure for Handling, Opening and Recording of 21 20. Committee System for Competitive Bids .. 22 21. Bid Specification Committees .. 22 22. Bid Evaluation Committees .. 23 23. Bid Adjudication Committees .. 24 Section D: Competitive bids Other matters .. 25 24. Negotiations with Preferred Bidders .. 25 25. Two-Stage Bidding Process / Pre-Qualification of Bidders .. 25 26. Procurement of Banking Services .. 26 5 27. Procurement of Construction Contracts.

6 26 28. Procurement Under Contracts Secured by Other Organs of State .. 26 29. Procurement of Goods Necessitating Special Safety Arrangements .. 26 30. Appointment of 27 31. Unsolicited Bids .. 27 32. Design Competition .. 28 33. Extension of Contracts, Variation Orders and Month-to-Month extensions .. 28 Part 3 Other Stages of Procurement Process .. 29 34. System of Demand MANAGEMENT .. 29 35. Logistics MANAGEMENT .. 29 36. Asset Disposal MANAGEMENT .. 29 37. Risk MANAGEMENT .. 30 38. Performance MANAGEMENT .. 31 39. Deviation from, and Ratification of Minor Breaches of Procurement Processes .. 33 40. Combating of Abuse of SUPPLY CHAIN MANAGEMENT system .. 33 Part 4 Miscellaneous Matters .. 35 41. Proudly SA 35 42. Prohibition on Awards to Persons in the Service of the State .. 35 43.

7 Awards to Close Family Members of Persons in the Service of the State .. 36 44. Ethical Standards .. 36 45. Inducements, Rewards, Gifts and Favours to Municipal Entities, Officials and Other Role Players .. 37 46. Sponsorships .. 37 47. Objections and Complaints .. 37 48. Resolution of Disputes, Objections, Complaints and queries .. 38 49. Contracts Providing for Compensation Based on Turnover .. 39 50. Commencement .. 39 Annexure A: Code of Conduct for SUPPLY CHAIN MANAGEMENT Practitioners and Other Role Players .. 40 Annexure B: Code of Ethical Conduct for SUPPLY CHAIN MANAGEMENT Practioners and Other Role Players 6 Part 1 Definitions and Background 1. Definitions In this 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 Accounting Officer The Chief Executive Officer of the JDA Accredited Prospective Providers A supplier of goods or services who has been successfully screened and prequalified following a competitive process to provide specific goods or services to the JDA on an as and when basis BBBEE Broad Based Black Economic Empowerment as defined in the Broad Based Black Economic Empowerment Act, 53 of 2003, as amended read with Preferential Procurement Framework Act, 5 of 2000.

8 As amended Bid A signed written offer that is made for the SUPPLY of goods and/or provision of services in response to an invitation to bid Bidder Any person submitting a bid Bid Adjudication Committee A committee constituted by JDA senior officials appointed by the Accounting Officer to consider reports and recommendations from bid evaluation committee and other matters relating to contracts procured through competitive bidding process as provided in this POLICY Bid Evaluation Committee A committee constituted by JDA officials appointed by the Accounting Officer to evaluate and consider bids in accordance with the provisions of paragraph 22of this POLICY Bid Specification Committee A committee constituted by at least one JDA official from the department that requires the services or goods in accordance with the provisions of paragraph 21of this POLICY CIDB Act The Construction Industry Development Board Act 38 of 2000.

9 As amended Competitive bidding process A competitive bidding process referred to in Section D of Part 2of this POLICY 7 Competitive bid A bid in terms of a competitive bidding process Contract An agreement that results from the acceptance of a signed written offer by the JDA Contractor An independent entity or person appointed to SUPPLY goods or services that meets the requirements or specification at and agreed price and within a specified timeframe Database A list of prospective suppliers categorised per commodity and type of service Design competition A process of procuring design services in which design professionals are invited to submit detailed design proposals to the JDA. The winner is selected based on the ability of their proposal to meet the requirements of the project Deviation A departure approved by the Accounting Officer from the official procurement policies as set out in this POLICY and the Regulations Emergency An unexpected situation or event that arises which require immediate response or action in order to prevent injury to persons, loss of life, damage to property, damage to the environment and/or interference with a normal activities of a firm or person where adherence to normal procurement processes will not be appropriate.

10 Bad planning does not constitute an emergency Final bid award A final decision on which a bid or written quotation is communicated to the bidder Formal written price quotation A written offer to the JDA in response to the invitation to bid Functionality The measurement according to predetermined requirements, as set out in the tender document, for goods and services designed to be practical and useful taking into account, among other factors, the quality, reliability, viability, durability of the goods or services and the technical capacity and ability of a tenderer In the service of the state Means to be (a) a member of (i) any municipal council; (ii) any provincial legislature; or 8 (iii) the National Assembly or the National Council of Provinces; (b) a member of the board of directors of any municipal entity; (c) an official of any municipality or municipal entity; (d) an employee of any national or provincial department, national or provincial public entity or constitutional institution within the meaning of the Public Finance MANAGEMENT Act, 1999 (Act of 1999); (e) a member of the accounting authority of any national or provincial public entity; or (f) an employee of Parliament or a provincial legislature; Invitation to bid A formal request by the JDA for the provision of goods and/or services through written price quotations and/or competitive bidding process.