Supply Chain Management

Supply Chain Management – Overview

The Knysna Council during October 2015 approved the Municipality’s Supply Chain Management Policy that was drafted in accordance with the requirements of the Municipal Finance Management Act, No. 56 of 2003 (MFMA), as well as the Municipal Supply Chain Management Regulations, Government Gazette Notice No. 868 of 2005.

In terms of this policy, the Municipality is required to maintain a supplier database. Prospective bidders are therefore encouraged to register on the Municipality’s Accredited Supplier Database.

The purpose of the supply chain management systems for Government and Provincial Departments, as well as municipal entities, is to give effect to the provisions of the Constitution and also the Municipal and Public Finance Management Acts. It is also to create an understanding for the Government’s preferential procurement policy objectives, to make significant improvements to financial management and to promote consistency in respect of supply chain policy and other related policy initiatives.

The Municipality’s Policy inter alia gives effect, as is required by law, to the Preferential Procurement Regulations, 2011. In terms of this Act, a points evaluation system must be applied to all bids or quotations above R30 000, including VAT.

If the transaction amount is between R30 000 to R1 000 000, including VAT, 80 points is awarded for price and 20 points is awarded to a bidder for attaining the B-BBEE status level of contribution in accordance with the abovementioned Regulations.

For transaction values above R1 000 000, including VAT, 90 points are awarded for price and 10 points is awarded to a bidder for attaining the B-BBEE status level of contribution in accordance with the abovementioned Regulations.

In terms of the Policy, a competitive bidding process has to be followed for all transactions above R200 000, including VAT, although the Accounting Officer can lower this threshold if it is deemed necessary.

The competitive bidding process requires that a Bid Specification Committee, consisting of municipal officials, as well as external advisors if necessary, prepare the specifications for the commodity or service required.

A Bid Evaluation Committee, with a composition more or less similar to the Bid Specification Committee, evaluates the bids and tenders before they are referred to the Bid Adjudication Committee. The latter in turn considers the bids or tenders and either approve a bid or make a recommendation to the Accounting Officer for a final decision.

People who serve on the Bid Evaluation Committee are not allowed to serve on the Bid Adjudication Committee.

In terms of the MFMA, Councillors are not allowed to serve on nor attend any of the meetings of the aforementioned committees.

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