Remarks by the MEC of Finance, Mrs YN Phosa during supply chain management seminar Emnotweni Arena, Nelspruit

31 August 2011

Speaker notes for the Honourable MEC for Finance at a seminar on enhancing compliance monitoring and improving transparency and accountability in supply chain management

Programme Director

Representatives from National Treasury

Officials from departments and public entities

Ladies and gentlemen

I greet you all!

Thank you very much for attending this important seminar on supply chain management.

The aim of the seminar is to deepen understanding of and speed up the implementation of supply chain management reforms in the province.

We meet here during the closing of the focus month on women in our country.  

I do not have a doubt in my mind that the great legion of women freedom fighters of 1956 would have wanted to see a freer and prosperous society that places values of humanity above all.  

Bill Bennett  once said:

“When what we want to do and what we ought to do are two different things, character is built in the choice we make.”

The martyr of women struggle for emancipation understood that. The choice that they made was inspired by what they believe is right for them and the future generations. 

I believe that they would have loved to see the public service that procure and provide services in an equitable and fair manner, all the times.

They would have urged the men and women in the public service to perform their important task of service to the poor with diligence and integrity.

Today, we salute the pathfinders and true liberation icons for women empowerment and emancipation.

We also salute the women of today, who continue to live by the expectations and values that informed the action taken by the great multitudes of women of the famous 1956 march. 

Ladies and gentlemen 

We welcome this initiative to bring all officials in the public procurement space together, to deliberate on and reach consensus on implementation of measures to enhance transparency and accountability in supply chain management. 

This is in keeping with the commitment that we have made, which is to increasingly pay attention to gaps in the systems and implement measures that will lead to accountable service delivery.

Ladies and gentlemen,

It is no secret that some of the issues that the Auditor General raises when auditing our financial records have to do with supply chain management processes and decisions.

It is for this reason that we see all the officials and the committees that have been established to assist in public procurement as important partners in the operation clean audit project.

The Minister of Finance, Mr. Pravin Gordhan, speaking on public procurement had this to say:  

Public procurement plays a significant part in the economy and is central to government service delivery.

However, citizens and taxpayers do not get full value for money, because this is an area vulnerable to waste and corruption.

This compromises the integrity of governance and frustrates the pace of service delivery.

Alongside the work of the competition authorities in addressing supplier collusion and tender-rigging, a strong procurement framework is critical to boosting jobs and service delivery.  

We are agree with the sentiment of Minister Gordhan on the importance of public procurement to the value system that we hope for in our province.

The government has therefore resolved to implement measures that will help ensure that the process of procurement gives confidence to our people. 

Among the measures that have been agreed on is:

• The establishment of rigorous demand management procedures, including submission of advance tender programmes for the next financial year to the relevant treasury authorities.
• Prescription of limits for variation orders, to restrict significant changes to procurement orders and bring our system in line with international standards.
• Requirements for companies bidding for tenders to disclose the identity of all directors, to determine whether any of the directors are government officials or tax non-compliant. 

I would like to urge all officials to interact extensively with the Treasury instruction on enhancing compliance monitoring and improving transparency and accountability in supply chain management. 

The writer, Jackson Brown, Jr.  has this to say to us:

“That you may retain your self-respect, it is better to displease the people by doing what you know is right, than to temporarily please them by doing what you know is wrong.” 

Ladies and gentlemen, you will agree with me that the procurement processes and decisions that are taken in government are currently in the spotlight and have become part of the everyday public discourse.  

Members of the public are engaging in talks about how tenders are awarded because the perception is that a few are benefiting from these tenders. 

When the communities interact with the executives during the cabinet outreach programmes, they tell us that they are discouraged to submit bids because, in their opinions, their documents will not be considered. 

We are confronted by the allegations that the officials collude with one another to disadvantage bidders in the tendering processes.  

Clearly, we cannot allow this situation to take place in front of our eyes. History will not judge us well if we are seen to be frustrating the pace of service delivery.

We must not allow ourselves to be portrayed as or be associated with practices that make it impossible for an emerging entrepreneur to participate fairly and grow his or her business.

Programme Director, such actions erodes the confidence on the government and the trust that the electorate placed on all public officials to serve them with dignity and integrity.

One of the issues that we would like to see an end of it - is the tendency to deliberately split services or products into parts or items of lesser value merely to avoid publication of the bid invitation in the Tender Bulletin.

The government will continue to strengthen the systems to detect and deal with instances of collusion and corruption whenever they appear.  

We will ensure that the auditing and vetting of bid processes is strengthened to ensure adherence, compliance and ultimately to eliminate the possibility for fraud and corruption but as well to avoid litigations. 

We must deal decisively with fraud and corruption because any such incident undermines the democratic Constitution and disadvantages our people from accessing better health care, education, just to mention a few.    

We have in the past introduced practice notes on rotation and vetting of officials within supply chain management as part of waging war on fraud and corruption. 

The department will continue enforcing these instructions because we are convinced that, when properly implemented, collusion in the operations of supply chain management will be reduced. 

Programme Director, as I conclude I want to take this opportunity to thank the officials from National Treasury who will be sharing information with all the participants in order to smoothen the implementation of this progressive instrument in supply chain management. 

We have the power to initiate the anti corruption movement in the public and private sector.  

I thank you!

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