The Gauteng Provincial Treasury will introduce legislation next year to make the Open Tender system a law that must be followed to procure goods and services in the province.
Finance MEC Barbara Creecy made the announcement yesterday during the debate on the Open Tender System at the Gauteng Provincial Legislature. She said: “we must ensure that this important initiative becomes a long term way of line in our province. All departments and municipalities regardless of which party governs must promote open government principles”.
The MEC added that she will soon meet with Members of Mayoral Councils for Finance to discuss the Open Tender System, and will offer them the support of the provincial government to implement the Open Tender process and restore public confidence in public procurement in every municipality in the province.
The Open Tender process is one of the ground-breaking initiatives pioneered by the Gauteng Provincial Government in 2014, to ensure that government procurement processes are free from corruption and they achieve their intended development objectives.
The Open Tender innovation includes public scrutiny over the opening of the tender boxes and imprinting of all documents, appointing external, independent probity auditors to scrutinize every phase of the tender evaluation process to ensure total compliance with laws and regulations, and most important of all the public adjudication of the decision on the recommended service provider where bidders, the media and interested members of the public can watch the proceedings.
“What began in 2014 as a pilot project with the by now well know Cedar Road and Gauteng Banking tenders, together worth about R145 million now involves, 72 projects across all provincial departments with a collective worth of R10,419 billion. Our target for the current financial year is that 60% of our new procurement spend will go through the Open Tender procurement process,” MEC Creecy said.
Furthermore MEC Creecy said Open Tender process promotes small businesses in line with government’s commitment to economic transformation and inclusion.
In the 2015/16 financial year, the provincial government spent a total of R25 billion on goods and services, R19 billion or 77% went to black owned companies 20 percent to companies owned by women and 9, 3% to youth owned companies.
In the first six months of the current financial year, with the province wide roll out of the Open Tender process, 93% of spend has been on procurement from black owned companies. There was also an improvement in total spend on women owned companies which amounted to 22, 7% and youth companies at 10, 5%.
“Of equal significance is the fact that R3, 5 billion or 13% of our provincial first quarter spend was allocated on goods and services procured from township entrepreneurs. Supplier rotation is now ensuring that on average we are utilizing almost a third of the companies on the database,” she said.
MEC Creecy believes that these figures show that government’s vast buying power is a critical lever to promote economic inclusion and transformation. “Public procurement is playing an important role in developing the basic capabilities of small companies, including township enterprises, to participate in and benefit from growth processes,” she explained.