Categorized | Business

Anti-competitive firms to be restricted from state procurement

The Office of the Chief Procurement Officer will extend its fight against fraud and corruption to cover the private sector, Finance Minister Malusi Gigaba said on Wednesday.

Tabling the Medium Term Budget Speech in Parliament on Wednesday, the Minister said: “The fight against fraud, corruption and abuse of supply chain management system is being extended to cover both public and private sector corruption. This includes restricting companies found to have contravened competition laws through collusive practices which rob government and citizens of billions of rands.”

The Minister said this as National Treasury, through the Office of the Chief Procurement Officer, moves to tighten and modernise government procurement in order to root out tender corruption, fraud and abuse of the supply chain management system.

The Office of the Chief Procurement Officer has managed to expose corrupt activities in certain government institutions and state-owned enterprises through the review of contracts above R10 million.

“The fight against corruption is being accelerated and National Treasury is currently working with law enforcement agencies to investigate contracts which are alleged to be irregularly procured in certain state-owned enterprises,” he said.

The Office of the Chief Procurement Officer has strengthened initiatives to modernise procurement through the use of technology to automate procurement processes to simplify and reduce the costs of doing business with the state.



The initiatives are also aimed at reducing the cost of doing business with government and to generate savings through centrally arranged contracts and the implementation of a differentiated procurement approach through strategic procurement initiatives.

“The National Treasury and provincial treasuries are working with relevant government departments in identifying sectors and commodities for potential investment by black industrialists to promote local industrialisation and local economic development for job creation.”

The Minister said, meanwhile, that the payment of invoices to suppliers within the prescribed 30 days is critical for small and medium enterprises.

Failure to do so has a devastating effect on small businesses, and is a financial misconduct in terms of the Public Finance Management Act and the Municipal Finance Management Act.

“Therefore, accounting officers and accounting authorities who fail to do so should be charged for financial misconduct. There must be consequence management in this regard.

“Further, performance agreements of accounting officers and accounting authorities must include timeous payment of suppliers as one of the key performance areas.”

The Minister said, meanwhile, that since the introduction of expenditure ceilings and the implementation specific cost containment measures in 2013, spending on consultants, travel, accommodation, catering, advertising and conferences has declined by R2 billion.

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