S.Africa’s treasury reports first SCM review since 2004


According to the department, this is the first major assessment of the system of buying goods and services by the public sector since 2004.

“Back then government overhauled the supply chain management framework to decentralise procurement decisions to departments – national and provincial, municipalities and public entities,” treasury said.

It added that the review is a culmination of the work done by the Office of the Chief Procurement Officer (OCPO) since its inception and the consultations it has had with various stakeholders.


“In 2013/14, the South African public sector spent 500 billion rand on goods and services and on construction works, an enormous amount of money which when spent wisely and efficiently can be a great force for good,” the department said.

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The review also identified several factors that may prevent public sector SCM from performing as well as it should, which includes that those working in the system may be either inexperienced or under-skilled, a high staff turnover and a lack of motivation, among others.

“The review outlines a number of reforms, which when implemented properly, will result in a public sector SCM system that complies rigorously with all relevant laws and regulations, is accountable, provides value for money and ensures good-quality service delivery,” National Treasury said.

It further stated that the review proposes that more intelligent ways be identified to realise value for money, create opportunities and promote beneficial change.

“These include strategic sourcing which requires that government adopts a differentiated approach that looks at the strategic importance of the purchase as well as the supply market complexity,” treasury said.

“Strategic sourcing is closely linked to transversal contracting, which provides a country-wide framework for maximising savings and value through the use of government’s bargaining power.”

(READ MORE: Supply chain hold-ups affecting S.Africa’s municipal performance)

The department added that transversal contracting is an important instrument enabling government to purchase goods and services from a central list of approved suppliers who have been vetted for cost and quality.

“The OCPO manages such a list, currently made up of 37 contracts covering more than 8,000 line items with an estimated annual value of over 16 billion rand,” it said.

Some of the nationally negotiated contracts that will be expanded over the next three years include banking services, ICT infrastructure and services, desktops and laptops, school textbooks and stationery and health technology and research, to name a few.