Greg Brown, director of Governance, Risk & Compliance at LexisNexis South Africa, said the CSD is a welcome addition to public procurement. "It follows closely on government's announcement of various measures to ensure the development of structures and processes that aim to overcome dodgy procurement practices and ensure spending is managed prudently," he said.
"Treasury has already conducted a review of public sector supply chain management, drawing on the views and experience of government, business and civil society, and some reforms, like the e-tender portal and the CSD, are important steps to ensure policy is converted into real world action," he added.
Other changes include that from January 2016, all books delivered to schools will be managed through a centrally negotiated contract, and with effect from May 2015, all school building plans will be standardised and the cost of construction controlled by the Office of the Chief Procurement Officer.
As of the beginning of April, the central supplier database would interface with SARS, the Companies and Intellectual Property Commission and the payroll system. It will electronically verify a supplier's tax and BEE status, and enable public sector officials doing business with the state to be identified.
"New B-BBEE legislation is changing the way in which a company's vendor database will comply to BEE codes and standards. Whereas previously only vendors pertaining to 80% of procurement spend had to be BEE compliant, now 80% of the vendor database needs to be compliant and to meet the new quotas. This means more SMEs and EMEs will need to be vetted for companies to comply, said Brown.
"In addition, both the Public Finance Management Act and the Municipal Finance Management Act are driving strong ethical standards which impact supply chain management. Both encourage companies to build environments where business is conducted with integrity, respect and mutual trust amongst all those involved in the procurement process.
"Companies looking to win government business can't afford to drop in BEE levels or to be found non-compliant with the Public Finance and Municipal Finance Management Acts," he added.
With procurement fraud and corruption under the spotlight, government and corporates are taking a far greater interest in protecting themselves from reputational damage. Brown advises the following interventions to help supply chain management officers to comply with both the new B-BBEE legislation and the Finance Management Acts:
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