Proudly SA: Clearing confusion local tenders are facing
Opinion / 19 November 2019, 12:30pm / Eustace Mashimbye
JOHANNESBURG - Procurement is a very specialised skill with recognised courses available through a number of institutions, among which the most recognised as the standard for the profession being the Chartered Institute of Procurement and Supply.
The complexities and technical aspects of requests for proposals (RFPs); requests for quotations (RFQs); and tenders have tripped up many companies whose lack of compliance has gotten them into trouble. Working for an organisation which adheres to the very highest procurement standards, I have been amazed by the non-compliance perpetuated in our state-owned enterprises (SOEs), given that the terms and conditions of procurement are so stringent.
However, even a seasoned and honest procurement officer can be confused by the specifications of some of the items they are required to source.
Even within Proudly SA, although we have a highly competent procurement official, her expertise is financial, and so when confronted with requests from marketing for specialised services and promotional items, there are many back and forth queries between the procurement and line function departments regarding shapes, sizes and quality of materials and much consultation before the RFQ can go out in all its meticulous detail.
The procurement process frequently involves items which relate directly to the function of a company and with which the procurement team is familiar. But from time to time, it is necessary to source other products and services not necessarily linked to the core deliverables, and procurement officials must at times grapple with specifications for products outside of their technical knowledge.
In order to create a tender document, the procurement manager must determine exactly what is required. If there is no input or expertise anywhere else within the company for the item or service, they will research a tender document that most closely matches their needs and copy and paste the specs.
In another scenario, the replacement of an item that was procured long ago is necessary, or repeat orders are put out to tender on a regular basis. In this case, specs that have been inherited or used before are copied and pasted without being updated.
In both cases, the risk of precluding some companies from bidding because they cannot match the specs is high. We see many local companies being prejudiced in this way simply because of procurement with a historical bias or simply as a result of inexperienced buyers.
The two examples we can give are of an SOE operating in a very specific industry that needs to buy office furniture. If you read this column regularly you will know that we have done a lot of work in this sector that has suffered as a result of imported goods.
The SOE's procurement officer had no idea where to start and so found an old tender document whose specs did not match any of our local companies’ products. There are many local companies, however, that have the quality, expertise and capacity to fulfil this tender, but because the SOE is using terms and conditions historically biased against local, they are losing out, and the tender will undoubtedly be awarded to an importer.
In the second scenario, we have the example of Stampede, a local company that for 30 years has been designing, engineering and assembling vibratory compaction rollers used in road construction. However, government procurement officials looking for construction materials for road building and re-surfacing programmes have simply regurgitated old tender specs which are technically way different from Stampede’s products, resulting in companies that manufacture wholly imported compacters being the only ones able to bid.
In most cases the imports are from Germany, where road and weather conditions are completely different from ours with many of the machines’ features redundant for South Africa.
These are just two examples of how highly skilled local companies manufacturing to the highest international standards but with different specifications are being shut out by procurement and supply chain officers as a result of repetitive practices which have historically favoured imported goods.
It is high time we re-trained our procurement specialists in both the public and private sectors to do their research when writing specifications for what they are looking to buy, to have a bias towards high quality locally made products and ultimately to support local companies that are the source of thousands of jobs to bid for contracts.
Blow by Blow is a song by former Idols winner Thato, and blow by blow detail in favour of local is what we need to see in our tender documents.
Eustace Mashimbye is chief executive of Proudly South African.