Parliament – The long-awaited Public Procurement Bill would be published shortly, Finance Minister Pravin Gordhan announced on Wednesday.
Tabling the 2017 budget in the National Assembly, Gordhan said the bill would set up an apex procurement authority.
“It will establish a single procurement authority and will consolidate the currently fragmented regulatory environment, in keeping with section 217 of the Constitution,” Gordhan said.
Section 217 of the Constitution provides for the the “fair, equitable, transparent, competitive and cost-effective” procurement of goods and services by national, provincial and local government.
The bill, along with other procurement reforms, is set to cut out corruption, theft and irregular expenditure. Last year’s audit outcomes revealed that national and provincial government departments and entities accumulated some R46 billion in irregular expenditure – in essence spending taxpayers money in a way that was not compliant with public finance laws.
Gordhan said a central supplier database was fully operational.
“It has made doing business with the state much easier and cost effective. It enables government to know who it is doing business with and to use technology to reduce opportunities for fraud and corruption.”
The database had already identified transactions to be probed for possible wrongdoing. These included instances where public service employees appeared to be doing business with the state, “supply agreements that reflect the identity numbers of deceased persons”, and payments from government to bank accounts that did not match those of its suppliers.
“In some cases we will find that there are legitimate explanations. But where fraud and corruption is identified, action must be taken,” said Gordhan.
“The law will catch up with you.”
The Office of the Chief Procurement Officer, said Gordhan, was managing 71 transversal contracts (contracts that allow multiple sellers to provide goods and services at a fixed rate) worth R61 billion.
“Good progress is being made to find better value for money while expanding and diversifying the number of suppliers.”
In the current financial year, saving of R675 million was achieved on cellphone and vehicle contracts. This saving is set to reach between R1 billion and R1.5 billion in the 2017/18 financial year.
Savings on property leasing contracts were expected to reach between R2 billion and R3 billion, while saving of R2.5 billion is expected to be achieved over the next three years “in the ten largest ICT equipment contracts”.
The average cost of building a new school has been more than halved from R70 million for 7,500 square metres to R34 million.