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DEPARTMENT OF DEFENCE (DOD) PROCUREMENT

DEPARTMENT OF DEFENCE (DOD) PROCUREMENT. Brig Gen T.E Mulaudzi Director Procurement Management. 1. BACKGROUND. The introduction of PFMA required all State Departments to conduct procurement in line with National Treasury prescripts

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DEPARTMENT OF DEFENCE (DOD) PROCUREMENT

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  1. DEPARTMENT OF DEFENCE(DOD)PROCUREMENT Brig Gen T.E Mulaudzi Director Procurement Management 1 RESTRICTED

  2. BACKGROUND The introduction of PFMA required all State Departments to conduct procurement in line with National Treasury prescripts DOD established procurement capability (CPSC and SPSC) at DOD level The two centers migrated to Log Div (under C Log) in April 2009 The new Procurement Delegations were promulgated in May 2009 C Log established DPM in 2012 to assist him with Procurement Functional Control and Ensure Compliance The issuing of new procurement delegations intensified in 2014 with the establishment of Services’ Procurement units in line with May 2009 Procurement Delegations So far, DOD Procurement is decentralized in line with the Defence Review 2015 2 RESTRICTED

  3. AIM To present the DoD Procurement operation to the members of parliament 3 RESTRICTED

  4. SCOPE • SCM Framework • Acquisition vs Procurement • Pillars of Procurement • Procurement Governance • Procurement Delegations • Procurement Processes • 1 Military Hospital Project Procurement • Achievements • Challenges • Conclusion • Q & A Session RESTRICTED

  5. SCM FRAMEWORK GRC Monitoring Processes Demand Management Processes Acquisition / Procurement Processes Logistics Processes Disposal Processes GRC Monitoring Processes RESTRICTED

  6. PROCUREMENT VS ACQUISITION • DOD Procurement • Folio 2 Budget (General Defence Account) • Commercial off the Shelf and Military off the Shelf (COTS and MOTS) • Competitive Procurement Process orientated • DOD Suppliers Day • Acquisition • Folio 1 Budget (Special Account) • Strategic Capability Management Process (SCAMP) • Industry orientated for specific system • ARMSCOR Process • Industry Day RESTRICTED

  7. PILLARS OF PROCUREMENT • Value for money, • Open and effective competition, • Ethics and fair dealing, • Accountability and reporting and • Equity. RESTRICTED

  8. Procurement Governance The Constitution of South Africa (Fair, Transparent, Economic and Equitable) Public Finance Management Act (PFMA) 1 of 1999 Preferential Procurement Policy Framework Act (PPPFA) 5 of 2000 Broad Based Black Economic Empowerment Act (BBBEE) 53 of 2003 (NT Instruction dated Nov 2011) National Treasury Regulations 16A National Treasury Practice Notes RESTRICTED

  9. Procurement Governance National Treasury Practice Notes Procurement Guide for Accounting Officers Joint Defence Publication (JDP) 0003/2004 (under review) Department of Defence Logistics Instructions Delegations of powers to procurement authorities (Edition 4) dated May 2009 Procurement Guidelines issued by C Log (DPM) RESTRICTED

  10. PROCUREMENT DELEGATIONS • SecDef: Umlimited • CSANDF: Unlimited • Departmental Commercial Procurement Board (DCPB): >RM10 • Corporate Commercial Procurement Committee (CCPC) >RM5 but <RM10 • Central Procurement Service Centre (CPSC): RM5 • Simons Town Procurement Service centre (SPSC): RM5 • South African Military health Unit: RM5 • SA Army Procurement Unit: RM1 • SA Air Force Procurement Unit: RM1

  11. PROCUREMENT DELEGATIONS • SA Navy Procurement Unit: RM1 • DHQ Unit Procurement Unit: RM1 • Log Div Procurement Unit: RM1 • Level 4 FSE’s Procurement Sections (60 Entities): R30 000 to R100 000 RESTRICTED

  12. PROCUREMENT PROCESS Requirement Adm Requirement Adm Requirement Adm Requirement Adm Requirement Adm Requirement Adm Requirement Adm Requirement Adm Requirement Adm Requirement Adm Requirement Adm Requirement Adm Requirement Adm GRC Order Adm & Payments GRC GRC Invitations Invitations Invitations Invitations Invitations Invitations Invitations Invitations Invitations Invitations Suppliers Database Management (CSD) Contract Management GRC GRC GRC Recommendations Data Capturing & Evaluation Data Capturing & Evaluation Data Capturing & Evaluation Data Capturing & Evaluation GRC GRC GRC RESTRICTED

  13. PQ (14 - 21 Days) Bid (21 – 28 Days) New Contract (56 Days) Existing Contract (7 – 14 Days) Procurement Process Req Adm (2 Days) Invitation Capturing & Evaluation 14 – 28 Days Order Admin 7 – 14 Days Recommendations 14 – 21 Days Adjudication CCPSC – 7 Days CCPC – 14 Days DCPB – 14 Days 13 RESTRICTED

  14. Procurement Process • PQ: 79 Days Max. • Bid: 93 Days Max. • New Contract: 121 Days Max. • Existing Contract: 21 Days Max. NB: Planning in procurement is very important . Contract system for repetitive requirements is the most convenient process. C Log’s Performance Indicator requires the entire process to be completed within 90 days 14 RESTRICTED

  15. 1 Mil Hosp Project procurement DOD and NDPW made decision to devolve some of facilities maintenance functions to the DOD 1 Mil Hospital 1st Floor was identified as a Pilot Project DCPB approved submission from Log Div to take over the consultants (Tectura Architects) that were already on site GTAC advised that Hospital cannot be renovated without inputs from Medical Health Technologist (MHT) Procurement process has already commenced to acquire MHT Envisaged to appoint MHT by end November 2016 15 RESTRICTED

  16. Achievements Streamlining of DOD Procurement function from SecDef, through C Log (DPM) to the Lowest level Issuing of Procurement Delegations Establishment of Procurement Capabilities in line with Procurement Delegations Edition 4 dated May 2009 and Def Rev 2015 Suppliers’ Day, Seminars and Forums Implementation of E-Procure System and CSD Awareness to the Suppliers iro Fraudulent GO’s 16 RESTRICTED

  17. DOD Procurement Challenges Challenge 1. Appointment of Medical Health Technician (MHT) Mitigation 1. TOR have been submitted to the DCPB for approval, then competitive procurement process Challenges 2. Retention of Procurement Skills Mitigation 2. Establishment of Procurement Mastering Challenge 3. Payment of suppliers within 30 days Mitigation 3. Establishment of Payment Forum at CFO’s office 17 RESTRICTED

  18. DOD Procurement Challenges Challenge 4. Procurement “Scam” whereby suppliers are issued with fraudulent/Bogus Government Orders Mitigation 4. Establishment of Call Centre at Log Div which work in conjunction with the Military Police and SAPS Challenge 5. Corrupting and Corruption within procurement Mitigation 5. Vetting of all DOD procurement personnel and Bid Adjudication Committee members Challenge 6. The impact of National Treasury prescripts to the fighting force which results on many deviations Mitigation 6. The DOD still busy brainstorming the possible solution 18 RESTRICTED

  19. CONCLUSION Procurement is a system, guided/governed by the Acts, Regulations, policies and processes therefore if one process collapse, the entire system collapse RESTRICTED

  20. Q & A SESSION 20 RESTRICTED

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