INTRODUCTION TO SUPPLY CHAIN MANAGEMENT

Document Sample
INTRODUCTION TO SUPPLY CHAIN MANAGEMENT Powered By Docstoc
					 PROCEDURE
  MANUAL
 COMPILATION,
EVALUATION AND
ADJUDICATION OF
QUOTATIONS AND
      BIDS
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids



                                                                                                                OCTOBER 2008

                                             TABLE OF CONTENTS
CHAPTER 1:      INTRODUCTION TO THE BIDDING PROCESS ................................... 5
1.1     Overview and Definition .......................................................................................... 5
1.2     The Bidding Process ................................................................................................. 9
1.3     Procurement Principles ......................................................................................... 24
1.4     Establishing Bid Committees ................................................................................ 27
1.5     Appointment of Members ..................................................................................... 27
1.6     Skills Required for Bid Committee Members ...................................................... 28
1.7     Declaration of Interest ........................................................................................... 28

CHAPTER 2:      BID SPECIFICATION COMMITTEE ...................................................... 31
2.1     Establishment and Composition of a Bid Specification Committee (BSC) ..... 31
2.2     Functions of Bid Specification Committee .......................................................... 32
2.3     Drafting of Specifications ....................................................................................... 33
2.4     Various Other Specifications ................................................................................. 34
2.5     Consideration of Total Cost of Ownership (TCO) .............................................. 46
2.6     Considering Evaluation Criteria and Specific Goals ............................................ 47
2.7     Critical Factors ....................................................................................................... 49
2.8     Preference Points Allocation for Specific Goals .................................................. 49
2.9     Considering Evaluation Criteria with Consultants Services ............................... 52
2.10    Briefing Sessions ..................................................................................................... 53
2.11    Standard Bidding Documents ............................................................................... 54

CHAPTER 3:      BID EVALUATION COMMITTEE .......................................................... 61
3.1     Establishment of Bid Evaluation Committee (BEC) ........................................... 61
3.2     Composition of Bid Evaluation Committee ......................................................... 62
3.3     Functions of Bid Evaluation Committee .............................................................. 62
3.4     Bid Evaluation Process ........................................................................................... 63
3.5     Administrative Compliance .................................................................................. 65
3.6     Cancellation and Re-invitation of Bids .................................................................. 79
3.7     The Recommendation Report .............................................................................. 80
3.8     Information to ee Supplied with Recommendations for Award of Bids .......... 811
3.9     Recommendations ................................................................................................. 84

CHAPTER 4:      BID ADJUDICATIONCOMMITTEE ....................................................... 93
4.1     Mandate, Role and Function of the Bid Adjudication Committee ................... 933
4.2     Establishment of Bid Adjudication Committee (BAC) ..................................... 955
4.3     Composition of a Bid Adjudication Committee .................................................. 96
4.4     Duties and Powers of the Various BAC Committee Members .......................... 98
4.5     Statutory Obligations .......................................................................................... 104
4.6     Functions & Powers of the Bid Adjudication Committee ................................ 109
4.7     Bid Adjudication Committee Procedure ........................................................... 113
4.8     Documents Relating to Meetings ........................................................................ 116
4.9     Interim Bid Advisory Committee (IBAC) .......................................................... 118




                                                                                                                      Page 2 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




LIST OF ABBREVIATIONS


     AO               Accounting Officer

     BAC              Bid Adjudication Committee

     BBBEE            Broad Based Black Economic Empowerment

     BBBEEA           Broad Based Black Economic Empowerment Act (Act No 53 of 2003)

     BEC              Bid Evaluation Committee

     BEE              Black Economic Empowerment

     BSC              Bid Specifications Committee

     ECPG             Eastern Cape Provincial Government

     EOI              Expression of Interest

     EPWP             Extended Public Works Program

     HDI              Historically Disadvantaged Individual

     IBAC             Interim Bid Advisory Committee

     PFMA             Public Finance Management Act, 1999 (Act No 1 of 1999)

     PGDP             Provincial Growth and Development Plan

     PPP              Public Private Partnership

                      Preferential Procurement Policy Framework Act, 2000 (Act No 5 of
     PPPFA
                      2000)

     PSP              Professional Service Provider

     PSSCM            Public Sector Supply Chain Management

     QBS              Quality Based Selection

     QCBS             Quality and Cost Based Selection

     RMP              Risk Management Plan




                                                                                    Page 3 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




     SABS             South African Bureau of Standards

     SCM              Supply Chain Management

     SLA              Service Level Agreement

     SMEs             Small and Medium Enterprises

     SMMEs            Small, Medium and Micro Enterprises

     SBD              Standard Bidding Documents

     TOR              Terms of Reference




                                                                                    Page 4 of 124
CHAPTER 1:

INTRODUCTION                                 TO           THE             BIDDING
PROCESS


1.1     Overview and Definition
1.1.1   The word ‘acquire’ means to obtain or attain something which, in the Government
        context, may be goods or services that are required to fulfill a need. Acquisition
        Management thus refers to the management of the entire process of acquiring those
        particular goods or services which satisfy the need. This process covers the request
        for the item, based on the need; the sourcing strategy required to obtain the item;
        the acquiring of the goods or services and finally the administration thereof.

                               SUPPLY CHAIN MANAGEMENT MODEL


                                              DEMAND
              Infrastructure




                                                                                  Government’s
                                                                                  Procurement
                                            ACQUISITION
                                                                                   Objectives
                 Systems




                                                                                     Policy




                                              LOGISTICS

                                              DISPOSAL




                                     SUPPLY CHAIN PERFORMANCE
                                       RISK MANAGEMENT
                                            DATABASE/S

1.1.2   The primary objective of Acquisition Management is to fulfill the demand determined
        by the Demand Management phase of Supply Chain Management. Acquisition

                                                                                   Page 5 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids



         Management is thus driven by the department’s Procurement Plan and refers to a
         process of establishing: what will be acquired, when, how and from where it
         will be acquired, what quantity is required and at what price, as well as
         contracting with the supplier.


1.1.3    The desired outcome is a well-managed process of acquisition that results in the
         satisfaction of the need for goods and/or services that arose.


1.1.4    As part of acquisition management, all possible methods of obtaining the
         requirements should be investigated. An identification of the need in terms of its
         value and how the goods or services are classified are prerequisites for an effective
         sourcing decision.


1.1.5    Depending on the value of the goods or services and consideration of the
         departmental socio-economic targets, the goods or services will be acquired either
         via price quotations or through a competitive bidding process.             The bidding
         process must be followed for purchases above R500, 000 per contract.


1.1.6    The supplier database is integral to the acquisition process since no goods or services
         should be procured, whether via price quotations or competitive bidding, from a
         supplier that is not registered on the database.


1.1.7    For competitive bidding:
         -         A Bid Specification Committee will be required to compile bid documentation
                   in accordance with the goods or services specifications;
         -         A Bid Evaluation Committee will evaluate bids received in response to the
                   invitation; and
         -         A Bid Adjudication Committee will adjudicate the recommendation of the Bid
                   Evaluation Committee.
         It may be required that the Accounting Officer must ratify the latter Committee’s
         decision, before a valid contract award will be concluded.




                                                                                     Page 6 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids



1.1.8    Each of the committees mentioned above has a distinctly separate function from the
         others and should be composed of members that are exclusive to the particular
         committee concerned.


1.1.9    Once an award has been made, it is the responsibility of the SCM Unit to inform the
         successful bidder accordingly in writing.                       Contracts should be administered
         appropriately and cancelled or renewed with due consideration of supplier
         performance and relevant legal implications. The management of a contract is the
         responsibility of the end-user once a quote has been accepted or a bid awarded and
         the ensuing contract concluded.



1.1.10 Acquisition management therefore deals with the decisions that have to be made in
         order to manage the acquisition of the required supplies or services from within the
         institution, or through procurement thereof from the open market.


1.1.11 Procurement Thresholds


  Procurement Limits                    Sourcing                             Required Procedures
                                        Strategy
R1 to R2,000                       Verbal or written                 Verbal quotations(s) must be obtained if
                                   quotations           if            practical
                                   practical                         Market related prices
                                                                     Petty Cash
                                                                     Obtain written quotations if practical from
                                                                      preferred suppliers before the order is
                                                                      placed. This will protect the department if
                                                                      a dispute arises with the chosen supplier
                                                                      after the order is placed
R2,000 to R10,000                  Quotations                        At least 3 verbal or written quotations
                                                                     Preferred quotation must be confirmed in
                                                                      writing
                                                                     Order is placed based on written quotation
R10,000 to R500,000                Quotations                        Written       quotations    (at   least   three


                                                                                                        Page 7 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids



                                                                      quotations) but should be as many as
                                                                      possible
                                                                     Requests for quotation may be advertised
                                                                      to promote competition
                                                                     Quotations are evaluated in terms of the
                                                                      PPPFA if quotations are above R30,000
                                                                     Award made to successful supplier
                                                                     Order is placed
Above R500,000 to an               Bids                              Process of publicly inviting bids by means of
unlimited monetary value                                              newspaper advertisements and provincial
                                                                      tender bulletin
                                                                     Bids received are to be evaluated and
                                                                      awarded by Departmental Bid Committees
                                                                     Contract award is published in the
                                                                      provincial tender bulletin
                                                                     Contract is concluded with successful
                                                                      bidder




                                                                                                     Page 8 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




1.2       The Bidding Process
1.2.1     Once the needs analysis has been completed and there is certainty as to what will be
          procured, a strategy has to be determined as to how and what processes will be
          followed in procuring the products or services.


1.2.2     The sourcing of goods and services does not imply sourcing these goods or services
          from outside sources only. All possible methods of obtaining the requirements
          should be investigated such as:
1.2.2.1            Transversal term contracts;

1.2.2.2            Other institutions that could provide the requirements at a better price; and

1.2.2.3            Whether the requirements are available from redundant goods.


1.2.3     The optimum sourcing strategy should be used, considering the services and goods
          required, delivery method, required delivery date, prospective suppliers and specific
          goals that must be promoted in terms of the PPPFA. Sourcing strategies could
          include:
1.2.3.1            Local versus international sourcing;

1.2.3.2            The bidding system which might include obtaining quotations, inviting
                   competitive bids, pre-qualification of bidders and two stage bidding; and

1.2.3.3            Negotiations.




                                                                                      Page 9 of 124
1.2.4   The following diagram illustrates the process flow for a bidding process and describes a detailed bidding procedure.




                                    Acquisition                                                                             Contract


               1            2           3                 4               5           6                 7                    8                   9             10
   1                                                                                                                                          Update                     E
           Compile        Invite     Receive           Evaluate      Adjudicate   Negotiate          Formalise            Letter of          Supplier        Manage      N
             Bid           Bids       Bids               Bids           and                           Contract         Acceptance/           database                    D
          Documents                                                   Award                                               conclude               &
                                                                        Bids                                           final contract        Contract
                                                                                                                                              register




             11            12                  13                    14                   15                     16                     17
   2                                                                                                                                                     E
            Invite       Receive            Evaluate              Adjudicate           Letter of             Update                Forward               N
           quotes        quotes              quotes                quotes           Acceptance/             Supplier              Documents              D
                                                                                       conclude             database              to ordering
                                                                                    final contract                                  section




                                                                                                                                                             Page 10 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




1.2.5    Acquire Procedural Descriptions
               Task                                 Task Description                         Responsible                      Inputs                          Outputs
  1. Compile bid documents           A competitive bid acquisition decision has been   Bid         Specification   Specification, data sheets,      Bid document
                                     made based on the value of the goods or           Committee                   drawings                         Total Cost of Ownership
                                     services. This triggers the requirement to                                    General      Conditions     of
                                     compile bid documents. The bid documents                                      Contract
                                     should clearly state the type of contract to be                               Special             Contract
                                     entered into and contain the appropriate                                      Conditions
                                     contract provisions.                                                          Relevant legislation
                                                                                                                   Standard               Bidding
                                                                                                                   Documents
                                                                                                                   Relevant Practice Note




                                                                                                                                                                    Page 11 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids


               Task                                 Task Description                                Responsible                        Inputs                         Outputs
  Procedures:
     With reference to the specification, compile the bid documents using the Standard bid documentation in line with the General Conditions of Contract (GCC).
     If there are special conditions, ensure that these are taken into account in line with the Special Conditions of Contract.
     Determine the bid content taking into account the following: invitation to bid, application for Tax Clearance Certificate, pricing schedule, declaration of interest, the
        relevant preference claims forms, the NIPP form, technical specifications, the GCC and special conditions.
     Establish the Total Cost of Ownership for the goods or services to be acquired. This entails consideration of the total life cycle of goods or services and will serve as input
        to the evaluation and adjudication processes when determining the best alternative to satisfy the (original) need over a long term.
     Bid documents must indicate the Bid Evaluation criteria that will be used to assess the bids.
     Price adjustments for escalation – In some instances it might be in the best interest of the State to allow price adjustments based on escalation. If the Accounting Officer /
        Authority resolves to allow price escalation as part of the contract, this should be specified in the bid documents, including the formula and the time frames at which
        intervals such price adjustments should be considered.
     Price adjustments for ROE (Rate of Exchange) - Rate of exchange claims relate to the fluctuation of other currencies in relation to the South African rand. When the
        department advertises bids which might involve imported contents, whether wholly or partially, the ROE and future fluctuations are of vital importance, especially if it is a
        transversal contract for delivery over a specified period of say more than one year. The price adjustment should be specified in the bid documents.
     Check if the necessary standards have been met in terms of bid compilation – if not, change the document accordingly.
      In order to assure quality, the Bid Specifications Committee should check the standard of the goods or services required against the standards of the department.
      If there are suppliers for the particular goods or services, but these are not registered on the provincial supplier database, it is the responsibility of the acquisition section
        to communicate with the potential suppliers / bidders and advise them to contact Provincial Treasury for registration on the provincial supplier database. Refer to the
        relevant Practice Note.
      The Bid Documents must be approved by the Bid Adjudication Committee or Accounting Officer prior to invitation for bids.
  2. Invite bids                     An invitation to bid follows the compilation of       Bid Administration Section,    Bid document                     Issuing of bid documentation
                                     the bid document and entails the establishment        within     the   Acquisition   Provincial            Supplier   Formal invitation to bid
                                     of a list of suppliers, advertising and issuing bid   section                        Database
                                     documentation.




                                                                                                                                                                             Page 12 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids


                 Task                               Task Description                                Responsible                     Inputs                          Outputs
  Procedures:
            Once the bid documents have been compiled, it is advisable to establish a list of approved suppliers. This is especially relevant for goods or services of a
         technical/specialised nature.
            If the pre-qualification of suppliers is required, follow a pre-qualification process whereby certain suppliers pre-qualify themselves for the bid based on their capacity to
         provide the goods or services.
            Bids should be advertised in at least the Provincial Tender Bulletin, the Daily Dispatch and the Eastern Cape Herald as well as any other media that may be required.
         This allows for unfettered competition and equal opportunity. Bid Briefing sessions may also be held with prospective suppliers.
        Issue bid documentation to interested bidders. Note: A reasonable fee may be charged for bid documents.
        If there are no suppliers for the particular goods or services that are registered on the provincial supplier database, it is the responsibility of the acquisition section to
         communicate with the potential suppliers / bidders and advise them to contact Provincial Treasury for registration on the provincial supplier database.
  3. Receive bids                     The receipt of bids follows an invitation for bids   Bid Administration section,    Invitation for bids           Receipt of bid documents from
                                      and signifies the response of suppliers to the       within     the   Acquisition                                 suppliers
                                      invitation.                                          section
  Procedures:
              A bidder must be registered on the provincial supplier database prior to the closing of bids for the goods or services.
              Once the invitation for bids has been made and the bid documents have been issued to bidders, bids will have to be received. These should be placed in the Bid Box
               at the address detailed in the Bid documentation.
              The time for the bid opening should be the same as for the deadline for receipt of bids or promptly thereafter. Bidders should not be requested or permitted to alter
               their bids after the deadline for receipt of bids.
              Where an extension to the submission date is required, this extension should be advertised in the same media as the original advertisement before the original closing
               date.
              Requests for clarification and the bidder’s responses should be made in writing.
              All bids that are received after the due time must be rejected.




                                                                                                                                                                          Page 13 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids


               Task                                 Task Description                              Responsible                        Inputs                          Outputs
  4. Evaluate bids                   Bids are evaluated in terms of the criteria          Bid Evaluation Committee       Bid     documents        from   Rejection of bids
                                     stipulated in the bidding documents. Amending        (established in accordance     suppliers                       Alteration of bid scope
                                     the evaluation criteria after closure of the bids    with the relevant Practice     Relevant legislation (PFMA,     Further advertising and invitation
                                     should not be allowed, as this would jeopardize      Note)                          PPPFA, BBBEEA)                  Recommendation for award
                                     the fairness of the system. Points scored for                                       Specification criteria          Committee meeting minutes
                                     price and functionality must be added to points                                     Preferential   Procurement
                                     scored for goals and the contract is usually                                        Objectives
                                     awarded to the bidder who scores the highest                                        Total Cost of Ownership
                                     points. Refer to the relevant Practice Note.
  Procedures:
       A bidder must be registered on the provincial supplier database prior to the closing of bids for the goods or services.
       The bid documents should be checked for completeness in terms of: presence of SARS Tax Clearance Certificate, Supplier registration (check provincial supplier
        database), proper signatures, required securities and responsiveness.
       Bid documentation that is found to be incomplete should be rejected.
       The Bid Evaluation Committee will need to evaluate the bids in terms of the specified criteria and specification. Bids that do not meet the criteria / specification should be
        rejected.
       Bids should be evaluated with due consideration of quality.
       The Bid Evaluation Committee will need to evaluate the bids in terms of the Preference Point system and other conditions of contract criteria. Bids that do not meet the
        criteria should be rejected.
       Refer to the departmental delegations to ascertain who may contact the suppliers during the evaluation process should there be a requirement to do so.
       Minutes should be kept for all Committee Meetings.
       Accounting Officers/Authorities should ensure that neither the recommended bidder nor any of the directors are listed as companies/directors/persons restricted to do
        business with the public sector. This list of restricted suppliers is managed and maintained by the Office of SCM within the Provincial Treasury.
       In order to manage risk, price adjustments for escalation and/or ROE (rate of exchange) should be carefully considered. With price adjustments for escalation, deciding on
        the best option will require a careful analysis of all related aspects that will influence the adjusted price, including the cost for the additional administrative work.



                                                                                                                                                                             Page 14 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids


               Task                                 Task Description                         Responsible                        Inputs                          Outputs
       With price adjustments based on the ROE, a decision of who should take responsibility for any absorption of the fluctuation of a currency needs to be made. This decision
        entails the allocating risk. It is suggested that the Accounting Officer/Authority, after thorough analysis of relevant information, determine on a case-by-case basis the
        optimum route to be followed for each commodity. Price adjustments based on ROE fluctuations should be allowed only on the imported contents of the commodity and
        to meet only the suppliers’ additional costs of the imported content.
       In situations where the 80/20 principle is being applied and all bids submitted have exceeded the departmental threshold, the department must cancel the process and re-
        invite bids. (Refer to the ‘Invite Bids’ process).
       In situations where the 90/10 principle is being applied and all bids submitted are lower than the departmental threshold, the department must cancel the process and re-
        invite bids. (Refer to the ‘Invite Bids’ process).
       The points scored by a bidder might be to two decimal points, and the bid should be awarded accordingly
       A department may, prior to the award of a bid, cancel a bid process if:
             due to changed circumstances, there is no longer a need for the goods or services bids were received for;
             funds are no longer available to cover the total envisaged expenditure; or
             no acceptable bids are received.
       Under circumstances where there has been a Review process and/or changes made to bid scope, the institution may invite more bids or advertise further (refer to the
        ‘Receive Bids’ process).
       Once a thorough evaluation has been completed by the Bid Evaluation Committee, a written recommendation should be forwarded to the Bid Adjudication Committee.
  5. Adjudicate and Award            Once the Bid Evaluation Committee has             Bid           Adjudication      Recommendation           for   Award – letter of acceptance
                                                                                                                       award                          Letters of non-selection
      bids                           submitted their recommendation to the Bid         Committee (established in
                                                                                                                       Preferential Procurement       Appeal
                                     Adjudication Committee, the adjudication of the   accordance     with       the   Objectives                     Rejected bids
                                                                                                                       Relevant legislation (PFMA,    Committee meeting minutes
                                     bids can be completed and an award made.          relevant Practice Note)
                                                                                                                       PPPFA, BBBEEA)
                                     Refer to the relevant Practice Note.                                              Specification criteria
                                                                                                                       Total Cost of Ownership
  Procedures:
       A bidder must be registered on the provincial supplier database prior to the closing of bids for the goods or services.
       The Bid Adjudication Committee will be responsible for final adjudication of the bid, taking into account recommendations made by the Bid Evaluation Committee.
       In the event of equal points scored, the bid will be awarded to the bidder scoring the highest number of points for specified goals. Should two or more tenders be equal in


                                                                                                                                                                       Page 15 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids


               Task                                 Task Description                           Responsible                        Inputs                           Outputs
        all respects, the award shall be decided by the drawing of lots.
       Minutes should be kept for all Committee Meetings.
       Suppliers should be assessed by the Bid Adjudication Committee, for possible risks such as the availability of adequate facilities, financial standing, capacity and capability to
        deliver, previous performance in terms of quality and service delivery, as well as attainment of socio-economic goals.
       Before a contract over R10 million is awarded, clearance should be obtained from the DTI regarding the National Industrial Participation Programme. The contact details
        are:
                 Department of Trade and Industry
                 Private Bag X 84, Pretoria
                 0001
                 ATT: Mr Elias Malapane
                 Tel: 012 394 1401
                 Fax: 012 394 2401
       Prior to the award of any contract, Accounting Officers/Authorities should ensure that neither the recommended bidder nor any of the directors are listed as
        companies/directors/persons restricted to do business with the public sector.
       After approving a bid, the result of the adjudication should be advertised in the Provincial Gazette.
       Any appeals will have to be resolved via the Tender Appeals Tribunal in line with the procedures set forth in the relevant Practice Note.
       After the department has confirmed with Provincial Treasury that there are no appeals against the decision (or once any appeals have been resolved), a letter of award
        should be forwarded to the successful bidder. This letter should be signed by the CFO or HOD to approve the bid award.
       After announcement of the bid award, all unsuccessful bidders should be notified in writing and debriefed.
  6. Negotiate                       Once the Bid Adjudication Committee has            End user / relevant cost        Award      –    letter    of   Negotiation meeting minutes
                                     completed adjudication of the bids and an award    centre                          acceptance                     Mutual agreement with regard
                                     has been made. The institution, having decided     Supplier                        Bid specifications             to the terms of contract
                                     on awarding the contract to the preferred          Legal section                   Legal Advice
                                     bidder, enters into negotiations to outline the
                                     details of the contract, where/if necessary.



                                                                                                                                                                          Page 16 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids


               Task                                 Task Description                              Responsible                        Inputs                           Outputs
  Procedures:
      With the contract having been awarded by the Bid Adjudication Committee, it is the responsibility of the end user / cost centre to establish the contract with the
       successful bidder / supplier after being notified by the Bid Adjudication Committee of such award.
      The end user / cost centre will contact the supplier and enter into negotiations with them in order to finalise both the scope of the contract and the conditions attached
       to it. Negotiations normally include discussion of the following aspects, where applicable: Terms of Reference (TOR), the methodology, staffing, pricing, Accounting
       Officer’s/Authority’s inputs, and special conditions of the contract. These discussions should not substantially alter the original TOR or the terms of the contract, lest the
       quality of the final product, its cost, and the relevance of the initial evaluation be affected.
      Minutes of these meetings should be taken.
      Mutual agreement/consensus between the user and supplier should be achieved through the negotiation process – this agreement will serve the basis for the conditions
       that must be adhered to by both parties.
  7. Formalise Contract              Both parties should sign a written contract or, if    End user / relevant cost         Mutual   agreement      with   Formalised contract
                                     necessary, a service level agreement.                 centre Supplier Accounting       regard to the terms of         SLA (if relevant)
                                                                                           Officer        or   authorised   contract Legal Advice          Updated contract register
                                                                                           delegate
  Procedures:
      The contract should be written in at least English.
      Contracts should be signed, after mutual consensus, by all parties to the contract. The Accounting Officer or authorized delegate must sign on behalf of the department.
      The (formalised) contract should cover the following aspects, where applicable: clear Terms of Reference (TOR), timeframes, penalties, staffing, pricing, Accounting
       Officer’s/Authority’s inputs, and special conditions of the contract. Refer to the General Conditions of Contract.
      A Service Level Agreement should be formalised and signed in situations where services are to be performed. The Accounting Officer or authorized delegate must sign on
       behalf of the department.
      Original/legal copies of contracts should be kept in a secure place for judicial reference.
      The end user / cost centre should notify the contract management section of the award of contract. This will enable them to update the contract register.




                                                                                                                                                                               Page 17 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids


               Task                                 Task Description                              Responsible                      Inputs                    Outputs
  8. Update Supplier Database        Once an award has been made to a supplier, the         End user / relevant cost    Contracts awarded         Updated        supplier     details
      and Contract Register          provincial supplier database must be updated           centre           Contract                             (provincial supplier database)
                                     with the details relating to the award.                management section
  Procedures:
      The contract management section should update both the supplier record on the provincial supplier database and the contract register with information pertaining to the
       contract awarded to respective suppliers.
  9. Manage                          All actions after the conclusion of a contract         End user / relevant cost    Formalised contract       Updated contract register
                                     should be regarded as contract administration.         centre Accounting Officer   SLA                       Management reports
                                     The Accounting Officer/Authority is responsible        Contract      management    Performance measurement   Monitoring and compliance
                                     for the administration (including monitoring and       section Bid Adjudication    criteria                  Termination,    cancellation     and
                                     adherence to the agreement contract) of all            Committee                                             closure of contracts
                                     contracts      arranged    by    their    respective                                                         Dispute resolution (if necessary)
                                     institution.




                                                                                                                                                                     Page 18 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids


               Task                                 Task Description                           Responsible                     Inputs                          Outputs
  Procedures:
      Contracts must be administered in terms of the specifications and conditions contained in the contract, as well as legal aspects.
      The contract register for the department should be updated to reflect the award of the new contract. This step should already have occurred, but a check should be done
       on a regular basis to ensure that the contract register is up to date and accurate.
      All parties to the contract should observe acceptable ethical standards.
      The institution must report on the contract in line with the performance measurement standards and minimum reporting standards as indicated by the Provincial Treasury.
       This entails due consideration of and reflection on the supplier’s performance.
      Non-contractual price adjustments to the contract should not be considered unless for circumstances beyond the supplier’s control. Necessary approval, from the
       Accounting Officer, for such adjustments must be obtained since these adjustments are to the detriment of the state.
      Contractual price adjustments may be considered provided that these are in line with the contract conditions and the supplier provides documentary proof or an audited
       certificate of price adjustments claimed to warrant such an adjustment.
      Where relevant, the supplier / successful bidder must, within 30 days of receipt of notification of contract, supply the purchaser security of the amount specified in the
       Special Conditions of Contract (SCC). With reference to the General Conditions of Contract (GCC) and SCC, suppliers must provide warranty of supply and insurance in
       terms of goods supplied.
      If there is a bid condition allowing for inspections, tests and analyses, the bidder or contractor should be open, at all reasonable hours, for inspection by the institution.
       Further, the inspection, testing and analyses of any contract supplies is recommended and may be rejected for non-compliance.
      Payment to suppliers is to be made, in accordance with contract conditions, only after delivery of goods or services with receipt of an invoice in accordance with Treasury
       Regulations.
      Goods and services should be provided by supplier in accordance with the time schedule and quality specifications stipulated in the contract. A delay should be motivated
       by the supplier in writing and may result in the imposition of penalties by the institution.
      The supplier may not assign or subcontract a portion or the whole contract to another party without the approval of the department.
      Once a contract has been concluded, the close-out report, compiled by the supplier / contractor must be approved by the end user. The contract cannot be
       cancelled/closed without the approval of the Bid Adjudication Committee and Accounting Officer, after obtaining legal opinion.
      The institution may terminate the contract on the basis of default in terms of non-timeous delivery, failure by the supplier to perform obligations and the engagement by
       the supplier in corrupt or fraudulent practices with respect to the contract. The exception to this is if a force majeure situation arises which is beyond the supplier’s
       control. The institution may terminate the contract on the basis of supplier insolvency.
      Any disputes that arise should be resolved in the following order of escalation: 1) Mutual consultation by both parties, 2) After 30 days, via mediation, and 3) South African
                                                                                                                                                                     Page 19 of 124
       court of law.
            Task                              Task Description                             Responsible                          Inputs                            Outputs
10. Invite Quotes              Based on the departmental delegations and the        Acquisition section            Departmental       delegations   Invitation for quotations
                               value of the item, either verbal or written                                         formula                          Total Cost of Ownership
                               quotations will be requested only from suppliers                                    Goods or services value
                               who are registered on the provincial supplier                                       Requisition               (and
                               database. There may be certain exceptional                                          specification)
                               cases due to the classification of the items                                        Preferential     Procurement
                               required.                                                                           Objectives       (PPPFA   and
                                                                                                                   BBBEEA)
Procedures:
   Suppliers should be targeted based on the Preferential Procurement Objectives in line with the socio-economic objectives of the department.
   If there are suppliers for the particular goods or services, but these are not registered on the provincial supplier database, it is the responsibility of the Acquisition Section to
    communicate with the potential suppliers and advise them to contact Provincial Treasury for registration on the provincial supplier database. Refer to the relevant Practice
    Note.
   Establish the Total Cost of Ownership for the goods or services to be acquired. This entails consideration of the total life cycle of a goods or services and will serve as input to
    the evaluation and adjudication processes when determining the best alternative to satisfy the (original) need over a long term.
   To avoid any accusations of favouritism, it is suggested that a minimum of three quotations be obtained. Where this is not possible, each case should be dealt with on its own
    merits. The reasons for not obtaining at least three quotations should be recorded and approved by the accounting officer/authority or his/her delegate.
   Each time quotations are called; there should be a variation of the 3 suppliers used for the particular good or services.
   Where a ‘panel’ of pre-approved suppliers has been set up for specific goods or services ensure that quotations are requested from these suppliers.
   Requests for quotations exceeding R30,000 must comply with the provisions of the PPPFA.

   Up to an estimated value of R 10,000 per case, Accounting Officers may procure requirements without inviting competitive bids or price quotations by obtaining at least three
    verbal quotations from a list of prospective suppliers. This order should however be placed against written confirmation from the selected supplier.




                                                                                                                                                              Page 20 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




               Task                                  Task Description                            Responsible                Inputs                               Outputs
  11. Receive Quotes                 For amounts less than R10,000,a department            Acquisition section    Departmental       delegations   Receipt of quotations
                                     should    determine      their   own     procedural                          formula
                                     requirements for this level, with due regard to                              Goods or services value
                                     ensuring proper controls and value for money,                                Requisition               (and
                                     but an order should not be placed unless a                                   specification)
                                     written quotation has been received from the                                 Preferential     Procurement
                                     selected supplier. For amounts greater than                                  Objectives       (PPPFA   and
                                     R10, 000, but less than R200, 000, a minimum of                              BBBEEA)
                                     3 written quotes should be received from
                                     targeted suppliers.
  Procedures:
      Refer to the procedures for ‘Invite Quotes’.

      If the suppliers that have provided quotations are not registered on the provincial supplier database, they should ensure that they have contacted Provincial Treasury for
       registration on the provincial supplier database. It is the responsibility of the acquisition section to communicate with the supplier and advise them to get registered on the
       provincial supplier database prior to the evaluation and award of the order for the goods or services.




                                                                                                                                                             Page 21 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




               Task                                  Task Description                       Responsible                     Inputs                             Outputs
  12. Evaluate Quotes                Once at least 3 quotations have been received    Acquisition section         Supplier quotations            Decision   with     regard   to   which
                                     from suppliers, they must be evaluated by the                                Departmental     delegations   supplier will be awarded the order
                                     acquisition section prior to awarding the                                    formula
                                     contract.                                                                    Requisition / specification
                                                                                                                  Goods or services cost
                                                                                                                  Preferential   Procurement
                                                                                                                  Objectives     (PPPFA    and
                                                                                                                  BBBEEA)
                                                                                                                  Provincial supplier database
                                                                                                                  Total Cost of Ownership
  Procedures:
      Accounting Officers should apply the prescripts of the PPPFA and its associated Regulations for all procurement equal to or above R 30 000.

      The quotations are assessed in terms of the goods or services specified and a decision is made in terms of awarding the contract to the supplier with the lowest quote and
       alignment with the Preferential Procurement Objectives of the department.
  13. Adjudicate Quotes              The order will generally be placed against:      Acquisition section         Supplier quotations            Award of contract
                                         the supplier with the cheapest quote for                                Departmental     delegations
                                          contracts less than R30 000; and                                        formula
                                         the supplier with the highest points for                                Requisition / specification
                                          contracts which are equal to or more than                               Goods or services cost
                                          R30 000.                                                                Preferential   Procurement
                                                                                                                  Objectives     (PPPFA    and
                                                                                                                  BBBEEA)
                                                                                                                  Total Cost of Ownership




                                                                                                                                                            Page 22 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




               Task                                  Task Description                          Responsible                    Inputs                        Outputs
  Procedures:
      An order should not be placed against a supplier that is not registered on the provincial supplier database. Hence, the acquisition section should ensure that the
       suppliers that provided the quotations are registered on the provincial supplier database prior to award / acceptance of the quotes.
      Notify the supplier of the award (acceptance) / intention to order.
      Inform the suppliers that were not chosen verbally of non-award.
      Ensure that a written quotation source document has been provided.
  14. Update Supplier                Once an award has been made to a supplier, the      Acquisition section        Contracts awarded         Updated supplier details (provincial
        Database                     provincial supplier database must be updated                                                             supplier database)
                                     with the details relating to the award.
  Procedures:
      The acquisition section should update the supplier record on the provincial supplier database with information pertaining to the acceptance of quotes awarded to respective
       suppliers.
  15. Forward documents to           Once a quote has been accepted, the acquisition     Acquisition section        Acceptance of quote       Source documentation (requisitions,
       Ordering section              process, in terms of Acquisition Management         Ordering section                                     quotations, memos, etc.)
                                     scope, is complete and an order must be placed
                                     with the supplier. This is a Logistics Management
                                     process.
  Procedures:
      An order should not be placed against a supplier that is not registered on the provincial supplier database.
      Forward the requisition and all relevant source documentation (quotations, memos, etc.) to the ordering section.
      Orders are to be monitored continuously to ensure proper supply and delivery in accordance with the conditions of contract.




                                                                                                                                                        Page 23 of 124
1.3     Procurement Principles
1.3.1   South African procurement is fundamentally based on the following
        procurement principles.     Officials must adhere to these principles when
        performing bidding functions within the supply chain.


 Transparency                The procurement process shall be fair and relevant. Bid
                             documents must be readily accessible to all parties to
                             encourage effective competition.




 Equal treatment             All bidders and providers shall be treated equally throughout
                             the whole supply chain process and shall be given access to the
                             same information.


 Effectiveness               The Department shall strive for SCM system effectiveness and
                             shall carry out its procurement processes as cost-effectively as
                             possible while meeting the commercial, regulatory and socio-
                             economic goals of government in a balanced manner
                             appropriate to the procurement requirement.


 Efficiency                  The Department shall strive to standardize and simplify
                             procedures where appropriate to enhance SCM system
                             effectiveness and shall carry out its SCM processes as cost-
                             effectively and efficiently as possible.   The Department shall
                             strive to build relationships with suppliers, shall ensure good
                             working practices and shall encourage innovative solutions for
                             suppliers


 Competitiveness             The Department shall satisfy its requirements through a
                             quotation or bidding process inviting suppliers to compete for
                             contracts, unless there are justifiable reasons to the contrary.


 Fairness                    All bidders and contractors shall be dealt with, fairly and


                                                                                Page 24 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




                                      without favour or prejudice. Unnecessary constraints shall not
                                      be     imposed       on     bidders/contractors      and       commercial
                                      confidentiality shall be protected.


 Ethics                               All suppliers shall be treated equally by officials whilst
                                      promoting certain empowerment objectives, all stakeholders
                                      shall conduct business and themselves professionally, fairly,
                                      reasonably and with integrity, all interests shall be disclosed and
                                      any breach shall be reported.


 Proportionality                      The      product/service        requirements      stipulated     in   the
                                      specification/terms       of    reference     and    the     qualification
                                      requirements attached thereto must be appropriate, necessary
                                      and in reasonable proportion to the product/service being
                                      procured.


 Uniform application                  The Department shall ensure the uniform application of the
                                      SCM policy, SCM processes and documentation by the
                                      Department, all things being equal. The supply chain process
                                      shall be simple and adaptable to advances in modern
                                      technology, to promote efficiency and effectiveness.




 Accountability                       Each practitioner shall be accountable for their decisions and
                                      actions relative to their SCM responsibilities, the SCM process
                                      as well as in the implementation of concluded contracts. The
                                      Department shall have a system to investigate and hold liable
                                      both employees and relevant private parties dealing with the
                                      Department, for their decisions and actions relative to their
                                      procurement responsibilities, the procurement process as well
                                      as in the implementation of concluded contracts.




                                                                                                 Page 25 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




Openness                            The Department shall ensure a procurement process and a
                                    subsequent contract award and implementation according to
                                    the predetermined specification in line with the best practice
                                    procurement principles.


Value for money                     The Department shall achieve value for money through the
                                    optimum combination of whole life cycle cost and quality (or
                                    fitness for purpose) to meet the customer’s requirements while
                                    maximizing efficiency, effectiveness and flexibility.
                                    The Department shall apply the following TCO (Total cost of
                                    Ownership) procurement of goods and services in achieving
                                    value for money:
                                             TCO = Price + Administration (maintenance and process) +
                                             Quality/Usage + Supplier Value-add.
                                    The contract price accepted by a Department must also be
                                    market related.        In other words the price to be paid by a
                                    Department must be approximately the same as those offered
                                    by other suitable suppliers in the market place


Commitment to safety,               The Department is committed to the health and safety of its
health and the                      personnel and its providers in the application of its SCM
environment                         process.
                                    The Department is committed to the preservation of the
                                    environment, minimizing pollution and the improved use of
                                    natural resources in the application of its SCM processes and
                                    more specifically in the design of the specifications/terms of
                                    reference for each requirement.
                                    The Department shall apply preventative measures in situations
                                    of scientific uncertainty where a course of action could harm
                                    the environment.




                                                                                            Page 26 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




1.4       Establishing Bid Committees
1.4.1     One of the cornerstones of the successful implementation of Supply Chain
          Management is the establishment of well functioning Bid Structures.                       The
          Accounting Officer is required to appoint at least three Committees that will
          assist him/her in the proper execution of his/her duties.


1.4.2     The three committees involved in the bidding process are:
1.4.2.1            Bid Specification Committee;
1.4.2.2            Bid Evaluation Committee; and
1.4.2.3            Bid Adjudication Committee.


1.4.3     The Code of Conduct for Supply Chain Management Practitioners Practice
          Note 4 of 2003, clearly states that these Bid Committees should regulate Supply
          Chain Management on behalf of the Department in an honest, fair, impartial,
          transparent, cost effective and accountable manner in accordance with
          the Accounting Officer’s delegated powers. The delegated authority will vary
          across different committees, particularly the Bid Adjudication Committee.



1.5       Appointment of Members
1.5.1     All members appointed to any bid committee must be appointed in writing and
          in line with the Code of Conduct for Public Service chapter 2 of the Public
          Service Regulations 2001, Code of Conduct for Supply Chain Management
          Practitioners Practice Note 4 of 2004 and the circular in terms of the Code of
          Conduct for Bid Adjudication Committees.                     Delegations must be in writing as
          well as related to the value of the case/bid being evaluated or adjudicated.


1.5.2     The following is required from bid committee members:
1.5.2.1            Every member must sign a “Declaration of Interest” document provided
                   by the Accounting Officer/Authority;
1.5.2.2            All members should be cleared at the level of “confidential “; and




                                                                                           Page 27 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




1.5.2.3            All members must declare their financial interest annually to the
                   accounting officer.


1.5.3     All members and secretariat of bid adjudication committees must sign a
          declaration of confidentiality and impartiality form that they will:
1.5.3.1            Accept the confidentiality of meetings;
1.5.3.2            Not make known anything regarding the meetings, unless officially
                   authorized; and
1.5.3.3            Not purposefully favor or prejudice anybody.



1.6       Skills Required for Bid Committee Members
1.6.1     The following skills sets are recommended requirements for committee
          members:
1.6.1.1            Senior Management;
1.6.1.2            Regulations and policies knowledge;
1.6.1.3            Committee and team management;
1.6.1.4            Contract management and administration;
1.6.1.5            Financial analysis;
1.6.1.6            Industry acumen;
1.6.1.7            Commodity specific knowledge of the potential supply base;
1.6.1.8            Supplier relationship management;
1.6.1.9            Supply chain management;
1.6.1.10           Project management; and
1.6.1.11           Stakeholder management.



1.7       Declaration of Interest
1.7.1     An official who is involved in the recommendation process, or who is in any way
          involved with the procurement process, shall also certify, as part of the
          recommendation, that he/she complies with The Prevention and Combating of
          Corrupt Activities Act, Act No 12 of 2004.



                                                                                    Page 28 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




1.7.2    All officials who can influence the award of a quotation/bid are seen as officials
         who are involved in the recommendation process.


1.7.3    The register of attendance of the members of the Bid Specification Committee,
         Bid Evaluation Committee and the Bid Adjudication Committee must contain
         the following:
                   "I declare that I did not purposefully unlawfully favour or prejudice anyone in
                   the decision making process in the recommendation and award of the
                   quotation/bid.”


1.7.4    All officials who are involved in the decision making process must sign a similar
         affidavit.


1.7.5    All officials must make a declaration confirming that he/she, nor his/her
         immediate family, has a financial interest in any of the bids to be dealt with by
         the relevant bid committee. An example of the form is depicted as follows:




                                                                                    Page 29 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




        BID SPECIFICATION/EVALUATION/ADJUDICATION
                                             COMMITTEE


DECLARATION OF CONFIDENTIALITY AND IMPARTIALITY




MEETING NUMBER:


DATE:




I, the undersigned, accept that all information, documentation and decisions regarding
any matter serving before the Committee are confidential. I, therefore, undertake not
to make known anything in that regard.


I also declare that I will not purposefully favour or prejudice anybody.


             Name                        Department / Section                       Signature




                                                                                         Page 30 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




CHAPTER 2:

BID SPECIFICATION COMMITTEE


2.1      Establishment and Composition of a Bid Specification
         Committee (BSC)
2.1.1    The SCM Unit shall be responsible for the establishment and appointment of the
         Bid Specification Committee by the Accounting Officer in a timely fashion.


2.1.2    The BSC must at least have two permanent members, with one being the
         Chairperson.


2.1.3    Additional members must be co-opted ad-hoc, to suitably complement the skills
         of present members, to compile specific bid or quotation specifications.


2.1.4    The committee may, where appropriate, include an external specialist/advisor.


2.1.5    No person, advisor or corporate entity involved with the bid specification
         committee, or director of such a corporate entity, may bid for any resulting
         contracts.


2.1.6    A department may have more than one BSC if circumstances require. They
         must be co-ordinated and monitored by the SCM Unit, to ensure uniformity
         and to maintain quality performance standards.


2.1.7    The SCM Unit must, in conjunction with the relevant end-user group and other
         relevant stakeholders, identify the appropriate person or persons to assist with
         the drafting of the relevant specification.




                                                                                    Page 31 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




2.1.8     The Accounting Officer must ensure that the relevant technical and analytical
          expertise is represented on the Bid Specification Committee, as well as supply
          chain expertise where required, to assist with the drafting of specifications and
          evaluation criteria.



2.2       Functions of Bid Specification Committee
2.2.1     The Bid Specification Committee:
2.2.1.1            Is responsible for compiling quotation/bid specification documentation in
                   conjunction with functional line managers or program managers for
                   procurement of goods and services;
2.2.1.2            Is responsible for writing of specifications clearly and applying
                   standardization whenever possible and must take into account all
                   acceptable standards;
2.2.1.3            Should draft specifications in an unbiased manner to allow all potential
                   providers to offer their goods and services in a transparent manner;
2.2.1.4            Should write specifications such that they must contain the HDI and BEE
                   targets and PPPFA criteria, socio economic objectives, clearly indicating
                   the scope of the requirement                    and the ratio between price and
                   functionality, the full evaluation criteria as well as their weights and
                   values;
2.2.1.5            Must be able to identify and include each specific goal for which points
                   may be awarded as well as the relevant evaluation criteria in the
                   specification and where appropriate, set ranges (indicating breakdown of
                   the points / percentages as provided for in the relevant sliding scales for
                   the selected specified goals).           (As bids may only be evaluated according
                   to the criteria stipulated in the bid documentation it must clearly be
                   defined and be specific);
2.2.1.6            Must research and analyse the market properly and ensure the
                   application of strategic sourcing principles;
2.2.1.7            Must ensure funds are available; and
2.2.1.8            Must forward the final specification to the SCM Unit to facilitate final
                   approval of the specification by the Accounting Officer/Authority/Bid

                                                                                       Page 32 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




                   Adjudication Committee or the delegated official prior to advertisement
                   of bids.


2.2.2     In the execution of its functions, the Bid Specification Committee must apply all
          the rules relevant to the compilation of the specifications. The Bid Specification
          Committee shall also take into account the socio-economic goals that must be
          promoted and the manner in which it must be recorded to ensure the details of
          the evaluation criteria, according to Treasury reporting prescripts.



2.3       Drafting of Specifications
2.3.1     The drafting of Specifications, Task Directives and Terms of Reference starts in
          the Demand Management phase where the supplier market is analysed and the
          sourcing strategy is determined. It continues in Acquisition Management where
          the final request is detailed and issued. User requirements describe in detail the
          objectives to be met, or outcomes to be achieved as a result of the
          procurement of the goods/services in question.


2.3.2     Organisational needs and objectives need to be addressed in the specifications.
          The following must be included:
2.3.2.1            Objective – Must be clearly identifiable in terms of what needs to be
                   done;
2.3.2.2            Measurable – Must be written in such a manner that the department will
                   be able to measure performance against the required needs, time
                   frames, quality etc;
2.3.2.3            Achievable – Set the level that is achievable by the supplier, contractor
                   within the limitations of the department’s recourses; and
2.3.2.4            Monitoring – Determines the monitoring mechanisms.


2.3.3     It can also be referred to as the SMART principle namely it must be:
2.3.3.1            Specific;
2.3.3.2            Measurable;
2.3.3.3            Achievable;

                                                                                    Page 33 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




2.3.3.4            Realistic; and
2.3.3.5            Time focused.


2.3.4     There are different approaches for inviting bids for goods and services and it
          will become a specific requirement to ensure that the correct procedures are
          followed during the Bid Specification Committee meeting and deliberations,
          particularly when consulting services are required. The approach followed will
          be determined by the actual need and will be strengthen with the drafting of a
          contract.



2.4       Various Other Specifications
2.4.1     “Specification” is the terminology generally used to describe the requirement
          for goods.        “Terms of Reference” is the term used to describe the
          requirement for professional services.


2.4.2     Standards and technical specifications should promote the broadest possible
          competition, while assuring those critical elements of performance or other
          requirements for the goods, services and/or works being procured are
          achieved. As far as possible, accepted standards are to be specified such as
          those issued by Standards South Africa [a division of the South African Bureau
          of Standards (SABS)], the International Standards Organization or an authority
          recognized by the South African National Accreditation System with which the
          equipment or materials or workmanship should comply.


2.4.3     Specifications should be based on relevant characteristics and/or performance
          requirements. References to brand names, catalogue numbers, or similar
          classifications should be avoided. If it is necessary to quote a brand name the
          words “or equivalent” should be added after the reference.


2.4.4     The specification should permit the acceptance of offers for goods which have
          similar characteristics and which provide performance at least equivalent to



                                                                                    Page 34 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




          those specified. The quality required should not be over specified to the extent
          that it will be impossible for others to offer such a product.
2.4.5     To simplify the evaluation process a space should be left on the right hand side
          of each page, in which the bidder will indicate whether the offer complies with
          the specification or not. Particulars of the offer, such as any deviations will also
          be indicated in this space.


2.4.6     The user who has identified a need for the commodity, goods or service usually
          initiates the drafting of the specification.               It is recommended that Standard
          Specifications be filed, as it is easier to adapt/modify existing documentation,
          ensuring that standards are continuously improved and complied with. User
          requirement must be aligned to the Strategic plan, MTEF and operational plans.


2.4.7     Technical Specifications usually complement user requirements, as they are
          visible characteristics, such as dimensions of the product or materials that the
          product is made from or the specifications of a photo copier in terms of speed,
          colour, and other functions required and could include the following:
2.4.7.1       Plans and drawings
                  Plans and drawings that reflect the text of the specification. (Please
                   note, that the order of precedence between the drawings and the
                   specifications should be specified);
2.4.7.2       Minimum performance requirements;
2.4.7.3       The delivery date(s), place(s) of delivery and/or the contract period
              applicable. In the case of period contracts a period of time for completion
              of the contract must always be prescribed in the relevant bid documents.
              This period of time must also be precisely stated, e.g. “contract period: 24
              months”. Statements such as “within x months” or “before x months” must
              not be used;
2.4.7.4       Schedule for service delivery or completion date;
2.4.7.5       Shelf life, where applicable;
2.4.7.6       Packaging, where applicable;
2.4.7.7       Whether a performance guarantee is required. Full particulars, amount and



                                                                                        Page 35 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




              reasons must be given.
2.4.7.7.1          Performance guarantees should be commensurate with the degree of
                   contractual risk to which the Departments are exposed and are
                   normally applicable to large and complex contracts;
2.4.7.7.2          Performance guarantees should spread the cost of the risk of failure
                   between the contracting parties and should be set at such a level that all
                   the Department’s costs relating to such failure are likely to be recovered
2.4.7.7.3          Performance guarantees in engineering and construction works
                   contracts should be waived in low value, low risk contract or where a
                   third party carries the risk of failure in an acceptable manner;
2.4.7.8       The warrantee requirement and period applicable;
2.4.7.9       Whether samples must be submitted and whether the samples must be
              tested before the award of the contract. Reasons for testing should be
              given.
2.4.7.10      Where samples are to be submitted, the special conditions should state that
              samples must be submitted not later than the closing time or the date and
              time specified in the bidding documents.
2.4.7.11      Indicate inspection, testing, analysis, standards or method requirements,
              where applicable. Where tests, inspections and analyses are a bid condition,
              the bid documents should specify that the premises of the bidder should be
              open at all reasonable hours for inspection by a representative of the
              Department acting on behalf of the Department


2.4.8     In respect of technical equipment, apparatus, machinery and fragile goods, the
          following must be clearly specified so that they may be priced separately for
          evaluation purposes:
2.4.8.1       Whether installation/erection is required;
2.4.8.2       Whether servicing/maintenance is required; and
2.4.8.3       Whether demonstration/training is required;


2.4.9     The warranty, which is required. Servicing and maintenance can be divided into
          the following categories namely:



                                                                                    Page 36 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




2.4.9.1       Normal maintenance
2.4.9.1.1     This would entail a contract for the repair of any broken components of the
              installed equipment e.g. medical equipment . This might either be during or
              after the warranty period and should be indicated in the specification if
              required
2.4.9.1.2     Maintenance costs are to be specified in terms of hourly tariffs for labour
              and the actual cost of materials. Therefore, a list of the materials is to be
              included in the bidding documents.
2.4.9.2       Preventative maintenance
2.4.9.2.1     Preventative maintenance entails a service that is supplied to Departments
              to keep the equipment in running order. The details will not be specified in
              the bidding documents
2.4.9.2.2     However, where it is known beforehand that certain parts will have to be
              replaced on a regular basis, these details (how, when, where and on what
              equipment) must be specified in the bidding documents. Any repairs done
              should be covered in the normal maintenance contract.
2.4.9.3       Support/Standby Services
2.4.9.3.1     If Departments do not wish to enter into a maintenance and/or a
              preventative maintenance contract, a contract for the services of a skilled
              consultant/individual to rectify faults on equipment may be entered into on
              an as-and-when required basis


2.4.10 Computer Equipment
2.4.10.1      Section 7(g) of the SITA Act, Act No 88 of 1998, as amended by Act No. 38
              of 2002, provides that SITA may act as procurement agency in respect of
              information        technology         requirements,         in        accordance   with    State
              procurement policy. All IT-related contracts should therefore be arranged
              with the assistance of SITA. In this regard, SITA will be responsible for the
              sourcing of quotations and related aspects of the acquisition management
              process.
2.4.10.2      However, the responsibility and accountability for the final decision
              regarding the procurement of IT-related goods and services rests with the



                                                                                                 Page 37 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




              accounting officer/authority. The SITA ITAC Procurement Policy document
              serves as a guideline for IT-related procurement.


2.4.11 User specifications versus technical specifications
2.4.11.1      A technical specification determines mainly observable characteristics, such
              as the dimensions of the product and the material of which the product is to
              be manufactured. A user specification on the other hand describes mainly
              the result, which is to be achieved and how compliance is to be tested. The
              onus then rests on the supplier to offer a suitable product.                         Where
              appropriate, a special condition must prescribe that the bidder must
              substantiate its offer by means of a suitable certificate.


2.4.11.2      It is desirable, wherever possible in practice, to make use of user
              specifications.       These are usually easier to draw up and they stimulate
              technological development and competition.


2.4.12 Standards Bodies
2.4.12.1      Standards and specifications from bodies such as the South African Bureau
              of Standards (SABS) and ISO 9000 must be used. The SABS is available to
              assist with the drafting of specifications even if the specification does not
              carry an SABS number. In the event that the Department requires the SABS
              to assist, the Department must carry the cost, as the specification then
              becomes the property of the Department.


2.4.13 Standards Issued by SABS
2.4.13.1      The Bid Specification Committee must take into account standards issued by
              the SABS as well as other Industry-specific governing bodies such as the
              Construction Industry Development Board, when compiling specifications
              with which the equipment or material or workmanship should comply. The
              Department          must     ensure       that    specifications      adhere   to   statutory
              requirements set by other organs of State.




                                                                                             Page 38 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




2.4.13 Consulting Services
2.4.13.1      It is recommended that the SCM Guide for Accounting Officers together
              with Practice Note 3 of 2003 be referred to in respect of appointment of
              consultants.


2.4.13.2      The accounting officer/authority should be responsible for preparing and
              implementing the project, for selecting the consultant, awarding and
              subsequently administering the contract. While the specific rules and
              procedures to be followed for selecting consultants depend on the
              circumstances of the particular case, at least the following four major
              considerations should guide the accounting officer’s/authority’s policy on the
              selection process:
2.4.13.2.1              The need for high-quality services;
2.4.13.2.2              The need for economy and efficiency;
2.4.13.2.3              The need to give qualified consultants an opportunity to compete in
                        providing the services; and
2.4.13.2.4              The importance of transparency in the selection process.


2.4.13.3      In the majority of cases, these considerations can best be addressed through
              competition among firms in which the selection is based both on the quality
              of the services to be rendered and on the cost of the services to be
              provided Quality- and Cost-Based Selection (QCBS).


2.4.13.4      However, there are cases when QCBS is not the most appropriate method
              of selection. For complex or highly specialized assignments or those that
              invite innovations, selection based on the quality of the proposal alone
              Quality-Based Selection (QBS), would be more appropriate.


2.4.13.5      The particular method to be followed for the selection of consultants for
              any given project should be selected by the accounting officer/authority.
              Consultants should not be hired for any assignment that would be in conflict
              with their prior or current obligations to other clients, or that may place



                                                                                    Page 39 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




                them in a position of not being able to carry out the assignment in the best
                interest of the State.


2.4.13.6 STEPS TO FOLLOW WHEN INVITING AND SELECTING CONSULTANTS



                                  Which Committee/Section should be responsible for completing
                                                                    this stage
                                 Process completed by the              Process completed   SCM Section
     Stages of selection               Bid Specification                     by the Bid
                                          Committee                         Evaluation
                                                                            Committee

   Identify the approach         The Bid Specification
                                 Committee
   Invite the                    The Bid Specification
   bids/proposals                Committee
   Receive responses                                                                       The SCM
                                                                                           Section
   Evaluate responses                                                 The Bid Evaluation
                                                                      Committee




2.4.13.7        In determining the most appropriate approach, it may be useful to ask: What
                sort of Consultancy do I require? Is it for:-


An assignment that is not complex or                       Use ‘Quality and Cost
Specialized                                                Based Selection’ (QCBS)
A complex or highly specialized assignment,                Use ‘Quality-Based
for which consultants are expected to                      Selection’ (QBS)
demonstrate innovation in their proposals (for
example, financial sector reforms)
An assignment that has a high downstream                   Use QBS
impact and requires the best available experts
(for example, management studies of large
government agencies)



                                                                                           Page 40 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




A simple assignment, which is precisely                    Use ‘Selection under a fixed budget’, but
defined and the budget fixed                               evaluate technical proposals first as in
                                                           QCBS
A standard or routine assignment (e.g. an                  Use ‘Least-cost selection’ Potential suppliers
audit, engineering design of noncomplex                    may be obtained from the list
works)                                                     of approved service providers.
A very small assignment which does not                     Selection based on Consultants’ qualifications.
justify the preparation and evaluation of                  Potential suppliers
competitive proposals                                      may be obtained from the list of approved
                                                           service providers.
A task that represents a natural continuation              Use ‘Single-source selection
of previous work carried out by the firm
An emergency operation                                     You MAY use ‘Single source selection.’


An assignment where only one firm is                       Use ‘Single-source selection’
qualified or has experience of exceptional
worth for the assignment




2.4.13.8           PREPARATION OF TERMS OF REFERENCE FOR CONSULTING
                   SERVICES
                   The following steps would generally be followed in appointing
                   consultants where a clear Terms of Reference (TOR), including a
                   detailed task directive has been compiled and the objectives, goals and
                   scope of the assignment are clearly defined.


Preparation of the                      The accounting officer/authority should prepare the TOR.
“Terms of Reference”                    The scope of the services described should be compatible
(TOR)                                   with the available budget.
                                        The TOR should define clearly the task directive
                                        (methodology), objectives, goals and scope of the
                                        assignment and provide background information,
                                        including a list of existing relevant studies and basic
                                        data, to facilitate the consultants’ preparation of their



                                                                                             Page 41 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




                                        bids.


                                        Time frames linked to various tasks should be specified,
                                        as well as the frequency of monitoring actions. The
                                        respective        responsibilities          of   the    accounting
                                        officer/authority and the consultant should be clearly
                                        defined.


                                        The evaluation criteria, their respective weights, the
                                        minimum qualifying score for functionality and the
                                        values that will be applied for evaluation should be clearly
                                        indicated. The evaluation criteria should include at least
                                        the following:
                                                      Consultant’s experience relevant to assignment;
                                                      The quality of the methodology;
                                                      The qualifications of key personnel; and
                                                      The transfer of knowledge (where applicable).


                                        In more complicated projects, provision may also be made
                                        for pre-bid briefing sessions or presentations by bidders
                                        as part of the evaluation process.


                                        A clear indication should be given of which preference
                                        point system in terms of the PPPFA and its associated
                                        Regulations will be applicable as well as the goals to be
                                        achieved and the points allocated for these goals.


                                        Detailed information on the evaluation process should
                                        be provided by firstly indicating the ratio of percentage
                                        between functionality and price. The percentage for price
                                        should be determined taking into account the complexity of
                                        the assignment and the relative importance of functionality.


                                        The percentage for price should normally be determined
                                        and approved by the accounting officer/authority or


                                                                                               Page 42 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




                                        his/her delegate prior to finalizing the TOR.


                                        If transfer of knowledge or training is an objective, it
                                        should be specifically outlined along with details of number
                                        of staff to be trained, etc., to enable consultants to estimate
                                        the required resources.


                                        The TOR should list the services and surveys necessary to
                                        carry out the assignment and the expected outputs (for
                                        example reports, data, maps, surveys, etc), where applicable.


                                        Evaluation criteria could be divided into sub criteria.
                                        Preparation of a well-thought-through cost estimate is
                                        essential if realistic budgetary resources are to be
                                        earmarked.


                                        The cost estimate should be based on the accounting
                                        officer’s/authority’s assessment of the resources needed
                                        to carry out the assignment such as staff time, logistical
                                        support      and    physical inputs         (i.e. vehicles, laboratory
                                        equipment, etc). The cost of staff time should be estimated on
                                        a realistic basis for foreign and local personnel.


                                        The TOR should specify the validity period (normally 60
                                        – 90 days).


                                        The TOR should form part of the standard bid
                                        documentation.




2.4.13.9           REQUEST FOR PROPOSALS
                   This method should be followed where selection is based both on the
                   quality of a proposal and on the cost of the service through competition
                   among firms. This method will be applicable on more complex projects


                                                                                                Page 43 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




                   where consultants are requested and encouraged to propose their own
                   methodology and to comment on the TOR in their proposals.


Preparation and                                 Whenever possible, accounting officers / authorities
issuance of ‘Request                            should include at least the following documents in
for Proposals’ (RFP)                            the RFP:
                                                         (i) Letter of Invitation;
                                                         (ii) Information to Consultants;
                                                         (iii) The TOR; and
                                                         (iv) The proposed contract.


Letter of invitation                            The LOI should state the intention to enter into
(LOI)                                           a contract for the provision of consulting services, the
                                                details of the client and the date, time and address
                                                for submission of proposals.


Information to                                  The ITC should contain all necessary information
Consultants (ITC)                               that    would      assist     consultants   to   prepare
                                                responsive proposals. It should be transparent and
                                                provide information on the evaluation process by
                                                indicating the evaluation criteria and factors and their
                                                respective weights and the minimum qualifying score
                                                for functionality.


                                                A clear indication should be given of which
                                                preference points system will be applicable in terms
                                                of the PPPFA and its Regulations, as well as the goals
                                                to be targeted and the points allocated for each goal.


                                                The budget is not specified (since cost is a selection
                                                criterion), but should indicate the expected input of key
                                                professionals (staff time). Consultants, however, should
                                                be free to prepare their own estimates of staff time
                                                necessary to carry out the assignment.




                                                                                            Page 44 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




                                                The ITC should specify the proposal validity period
                                                (normally 60−90 days). A detailed list of the
                                                information that could be included is further indicated
                                                in paragraph 5.16. (page 82) of the SCM A Guide for
                                                Accounting Officers


Terms of Reference                              The TOR should be compiled by a specialist in the
                                                area of the assignment and the scope of services
                                                described should be compatible with the available
                                                budget. The TOR should define as clearly as possible
                                                the objectives, goals and scope of the assignment
                                                including background
                                                information to facilitate the consultant in the
                                                preparation of its proposal. The TOR should be
                                                compiled in such a manner that consultants are able to
                                                propose their own methodology and staffing and be
                                                encouraged to comment on the TOR in their
                                                proposals.


                                                Depending on the circumstances, it may be indicated
                                                that proposals should be submitted in two separate
                                                clearly marked envelopes, one containing the technical
                                                proposal and the other the cost for the assignment.




                                                In cases where pre-qualification/shortlisting is
                                                required, the TOR should indicate the basis of pre-
                                                qualification/shortlisting, for instance the number of
                                                minimum points to be scored to prequalify.


Contract                                        Accounting officers / authorities should use the
                                                appropriate Standard Form of Contract issued
                                                by the National Treasury. Any changes necessary to
                                                address specific project issues
                                                should be introduced through Special Conditions



                                                                                          Page 45 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




                                                of Contract and not by introducing changes in
                                                the wording of the General Conditions of
                                                Contract included in the Standard Form.




2.5      Consideration of Total Cost of Ownership (TCO)
2.5.1    In the development of the specification it is be important to address all elements
         of the cost of the product or service. The terms sometimes used are Total
         Cost of Ownership (TCO) or Life Cycle Costing. This is particularly important
         for the procurement of assets. The graphic below indicates the various costs
         that should be considered during the lifecycle of an asset, from need through
         planning to disposal.




                                                                                      Page 46 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




2.5.2    The total cost of the asset is not the cost that is reflected in the asset
         register. That cost is typically the value of the asset used for financial
         accounting practices.




2.6      Considering Evaluation Criteria and Specific Goals
2.6.1    Cost, quality and delivery are sometimes regarded as the most important
         supplier evaluation and are adequate for certain non-critical and low value
         purchases but inadequate for critical high value products or services.




                                                                                    Page 47 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




2.6.2     Many organizations base their operational prowess on the key performance
          objectives of quality, cost, delivery, flexibility, time and service, these six form
          the foundation for the criteria for the selection and evaluation of suppliers.


2.6.3     However, in most situations additional criteria must be considered. Criteria
          must be objective and limited to the object of the contract. These criteria are
          illustrated below in a source-and-effect diagram.

                           The criteria for supplier selection – a source-and-effect diagram

              Quality                 Cost                        Delivery                 Time                Service


                Philosophy               Pricing policy           On time                  Lead time            Early
                                                                  deliveries               reduction            warning
                   ISO 9000
                                              Cost
                         Continuous           structure                  JIT

                         improvement                                                                                 Rapid
                                                                               Complete           Cycle-time
                                                      Cost                                        reduction          response
                                                      reduction                orders
                            Benchmarking
                                                                                                                               The Right
                                                                                                                               Supplier?

                           Low Risk               Demand                       SCM
                                                  forecasting                  awareness          Code of                Organisational
                                                                                                  ethics
                        Good financial                                                                                   capability
                                              Required
                        record                                         Collaboration
                                              Technology
                                                                                            Social                Management
                                                                                            awareness             abilities
                 Improving               Process                  Partnerships
                 ROI                     capability                                                            Motivation

              Financial               Technology &           Supply Chain              Environment          Capabilities
              status                  Systems                Management                Ethics               Motivation – present &
                                                                                                            future




2.6.4     As a guide, there are four evaluation areas that must be included in the
          specification and must be evaluated during the evaluation process:
2.6.4.1            Administrative compliance;
2.6.4.2            Functional/Technical evaluation;
2.6.4.3            Commercial evaluation;
2.6.4.4            Company profile evaluation;
2.6.4.5            Personnel complement;
2.6.4.6            Representation of expertise in respect of the disciplines required e.g.
                   accounting, legal, educational, engineering, computer and etc;


                                                                                                                     Page 48 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




2.6.4.7            National/international acceptability of experts in the various professions;
2.6.4.8            Experience as reflected in projects already dealt with; and
2.6.4.9            Financial position.


2.6.5     Criteria and specific goals discussed in this section must be considered and
          finalized by the Bid Specification Committee.


2.6.6     A clear indication should be given of which preference point system in terms of
          the PPPFA and its associated Regulations will be applicable as well as the goals
          to be achieved and the points allocated for these goals.


2.6.7     In terms of regulation 4 of the Preferential Procurement Regulations pertaining
          to the Preferential Procurement Policy Framework Act 2000 (Act No.5 of
          2000), responsive bids will be adjudicated by the State on the preference point
          system in terms of which points are awarded to bidders on the basis of:
2.6.7.1            The bid price; and
2.6.7.2            Specific goals to be promoted.




2.7       Critical Factors
2.7.1     “Critical factors” are essential criteria that bidders must possess. This forms
          part of the functional, financial or technical evaluation criterion. If an offer does
          not satisfy any of the critical factors, it can then be rejected. “Critical factors”
          are also referred to as “Minimum requirements”. The capacity and ability to
          successfully complete a contract is a critical factor.



2.8       Preference Points Allocation for Specific Goals
2.8.1     Depending on the contract value, a maximum of either 10 or 20 points may be
          awarded to a bidder in terms of either the 80/20 or 90/10 preferences of the
          PPPFA for:
2.8.1.1            Being an Historically Disadvantaged Individuals (HDI). HDIs are people:



                                                                                    Page 49 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




                            Who had no franchise in national elections prior to the
                             introduction of the Constitution Act No. 110 of 1983 or the
                             Constitution Act No. 200 of 1993; and
                            Who is a female; and/or
                            Who has a disability.
2.8.1.2            Subcontracting with an HDI.
2.8.1.3            Achieving any of the specified goals stipulated in the Act and Regulations
2.8.1.4            Reconstruction and Development Plan Goals
2.8.2     The specific activities which may be stipulated towards achieving specific goals as
          per section 17 of the PPPFA include:
2.8.2.1            The promotion of South African owned enterprise;
2.8.2.2            The promotion of export oriented production to create jobs;
2.8.2.3            The promotion of SMME’s;
2.8.2.4            The creation of new jobs or the intensification of labour absorption;
2.8.2.5            The promotion of enterprise located in a specific region for work to be
                   done or services to be rendered in the region;
2.8.2.6            The promotion of enterprise located in a specific municipal area for
                   work to be done or services to be rendered in that municipal area;
2.8.2.7            The promotion of enterprise located in rural areas;
2.8.2.8            The empowerment of the workforce by standardising the level of skill
                   and knowledge of workers;
2.8.2.9            The development of human resources including by assisting in tertiary
                   and other advanced training programmes, in line with key indicators such
                   as percentage of wage bill spent on education and training and
                   improvement of management skills; and
2.8.2.10           The upliftment of communities through but not limited to housing,
                   transport, schools, infrastructure, donations and charity organisations


2.8.3     Other goals factors to be considered are:
2.8.3.1            Objectives of the Provincial Growth and Development Program;
2.8.3.2            The Expanded Public Works Program involves:




                                                                                    Page 50 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




                            Using labour intensive construction methods to provide
                             employment opportunities to local unemployed people;
                            Providing training or skills development to those locally
                             employed workers; and
                            Building cost-effective and quality assets.


2.8.4    The weighting applied to each of the specific objectives criteria should also be
         established prior to the evaluation process.


2.8.5    Specific goals must be measurable and quantifiable and organs of state must
         monitor the execution of the contract compliance with such goals.


2.8.6    It is important to note that no disqualification for the criteria set as the 10/20
         preference points may be applied. The only area for disqualification in terms of
         critical factors is for technical and/or functional criterion.


Below is an example template for HDI and RDP specific goals

                                RDP GOALS                                                  POINTS

                                     Factor                                                  80/90


Preference       points      for    equity     ownership         by    historically
                                                                                      Points out of 10/20
disadvantaged individuals


                                                                                      Points out of 10/20
Equity ownership by an individual who is female



Equity ownership by an individual who has a disability
                                                                                      Points out of 10/20

Enterprise within the Eastern Cape                                                    Points out of 10/20

TOTAL POINTS                                                                                  100




                                                                                             Page 51 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




2.9       Considering Evaluation Criteria with Consultants Services
2.9.1     When consultants are appointed, the prescripts of the Preferential Procurement
          Regulations, 2001, must be adhered to.                      These relate to the compulsory
          involvement of HDIs and the promotion of the RDP goals. The evaluation
          criteria, their respective weights, the minimum qualifying score for functionality
          and the values that will be applied for evaluation should be clearly indicated.


2.9.2     Detailed information on the evaluation process should be provided by firstly
          indicating the ratio of percentage between functionality and price. The
          percentage for price should be determined taking into account the complexity
          of the assignment and the relative importance of functionality.


2.9.3     The percentage for price should normally be determined and approved by the
          Accounting Officer or his/her delegate prior to finalizing the TOR.


2.9.4     The minimum for price and/or functionality should not be less than 20% whilst
          the maximum for price and/or functionality should not be more than 80%.


2.9.5     The evaluation criteria should include at least the following:
2.9.5.1            Consultant’s experience relevant to assignment, which includes:
                            Specific project applicable experience;
                            Key expertise; and
                            Project experience in the relevant field.


2.9.5.2            The quality of the methodology, including:
                            Understanding the TOR /brief;
                            Problem conceptualisation;
                            Innovation in approach /methodology; and
                            Fit of approach with department procedures practises, etc.


2.9.5.3            Project Management, which includes:
                            Work plans;


                                                                                        Page 52 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




                            Organisation skills; and
                            Management skills.


2.9.5.4            The qualifications of key personnel, including:
                            Appropriate fields of specialisation;
                            Relevant experience; and
                            Qualifications relevant to field of expertise.


2.9.5.5            Track record, which includes:
                            Completion of previous assignments within time;
                            Completion of previous assignments within budget; and
                            Transparency and openness on progress reporting.


2.9.5.6            The transfer of knowledge (where applicable). That is, the approach for
                   skills transfer / capacity building. If transfer of knowledge or training is an
                   objective, it should be specifically outlined along with details of number
                   of staff to be trained, with specific reference to the methodology and
                   measurements to evaluate the achievement of the success of the skills
                   transfer program. This will enable consultants to estimate the required
                   resources.


2.9.6     Evaluation criteria could further be divided into sub-criteria and where
          appropriate, ranges must be set (indicating breakdown of the points/percentages
          as provided for in the relevant sliding scales for the selected specified goals).




2.10 Briefing Sessions
2.10.1 In more complicated projects, provision may also be made for pre-bid briefing
          sessions and/or presentations by bidders as part of the evaluation process. The
          briefing session should be carefully planned and facilitated by a senior official.
          The date and place of the briefing session should be clearly indicated in the bid
          advert as well as the bid documents.

                                                                                    Page 53 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




2.10.2 During the briefing sessions all individuals attending the briefing session must be
         requested to sign an attendance certificate. Under no circumstances should any
         negotiations or agreements be made to extend the closing date of any bid
         during a briefing session. The extension of closing dates must be dealt with
         after proper consultation with all the role-players and then communicated by
         means of a news paper advert to all prospective bidders.



2.11 Standard Bidding Documents
2.11.1 The following Standard Bid Documents must be used within the Competitive
         Bid Process.


      DOCUMENT
                                                                DESCRIPTION
         NUMBER
                                 STANDARD BIDDING FORMS
                                                 GENERAL
SBD/ECBD1:                         Invitation To Bid
SBD/ECBD2:                         Tax Clearance Requirement
SBD/ECBD3.1:                       Pricing Schedule – Firm Prices (Purchases)
SBD/ECBD3.2:                       Pricing Schedule – Non-Firm Prices (Purchases)
SBD/ECBD3.3:                       Pricing Schedule - Professional Services
SBD/ECBD4:                         Declaration of Interest
SBD/ECBD5:                         The National Industrial Participation Programme


                           PREFERENCE POINTS CLAIM FORMS
                                   Preference Points Claim Form in terms of Preferential
SBD/ECBD6.1:
                                   Procurement Regulation 2001 – Purchases
                                   Preference Points Claim Form in terms of Preferential
SBD/ECBD6.2:
                                   Procurement Regulation 2001 – Sales
SBD/ECBD6.3:                       Preference Points Claim Form in terms of Preferential


                                                                                    Page 54 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




                                   Procurement Regulation 2001 - Promotion of Small
                                   Businesses
                                   Preference Points Claim Form in terms of Preferential
SBD/ECBD6.4:                       Procurement Regulation 2001 - Locally Manufactured
                                   Products
                                   Preference Points Claim Form in terms of Preferential
                                   Procurement Regulation 2001 - Empowerment of the work
SBD/ECBD6.5:
                                   force by Standardizing the level of Skills and Knowledge of
                                   Workers
                                   Preference Points Claim Form in terms of Preferential
                                   Procurement Regulation 2001 - Development of Human
                                   Resources, including Assisting in Tertiary and Other
SBD/ECBD6.6:
                                   Advanced Training Programmes in Line With Key Indicators
                                   Such As Percentage of Wage Bill Spent on Education and
                                   Training and Improvement of Management Skills
                                   Preference Points Claim Form in terms of Preferential
                                   Procurement Regulation 2001 - Upliftment of Communities
SBD/ECBD6.7:
                                   Through, But Not Limited To Housing, Transport, Schools,
                                   Infrastructure, Donations and Charity Organisations
                                   Preference Points Claim Form in terms of Preferential
SBD/EDC6.8:                        Procurement          Regulation        2001      -   Export     Orientated
                                   Production to Create Jobs
                                   Preference Points Claim Form in terms of Preferential
SBD/ECBD6.9:                       Procurement Regulation 2001 - Promotion of Enterprises
                                   Located In a Specific Province
                                   Preference Points Claim Form in terms of Preferential
SBD/ECBD6.10                       Procurement Regulation 2001 – Promotion of Enterprises
                                   Located in a Specific Region
                                   Preference Points Claim Form in terms of Preferential
SBD/ECBD6.11                       Procurement Regulation 2001 – Promotion of Enterprises
                                   Located in a Specific Municipal Area


                                                                                                 Page 55 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




                                   Preference Points Claim Form in terms of Preferential
SBD/ECBD6.12                       Procurement Regulation 2001 – Promotion of Enterprises
                                   Located in Rural Areas


                                         CONTRACT FORMS

SBD/ECBD7.1:                       Contract Form - Purchases of Goods/Works
SBD/ECBD7.2:                       Contract Form - Rendering Of Services
SBD/ECBD7.3:                       Contract Form - Sale of Goods/Works




                                                                                    Page 56 of 124
    Check /        Higher level       Responsibility     Checks and Controls for bid documentation compilation as well as inviting and
Control Point         Context                                                                 receiving bids
Bid compilation   Acquisition        Bid Specification      Check that a Bid Specification Committee is established in accordance with the
                  (Competitive       Committee               relevant Practice Note and is distinctly separate in composition and function from the
                  Bidding Process)                           other Bid Committees.
                                                            Check whether the bid documents have been compiled in accordance with the
                                                             provisions of Section 4.8 of the Guide to Accounting Officers/Authority.
                                                            If there are no suppliers for the particular goods or services that are registered on
                                                             the provincial supplier database, it is the responsibility of the acquisition section to
                                                             communicate with the potential suppliers / bidders and advise them to contact
                                                             Provincial Treasury for registration on the provincial supplier database. Refer to the
                                                             relevant Practice Note.
                                                            Ensure that specifications are precisely determined.
                                                            Bid documents must indicate the Bid Evaluation criteria that will be used to assess the
                                                             bids.
                                                            In order to assure quality, the Bid Specification Committee should check the standard
                                                             of the goods or services required against the standards of the department.
                                                            Bid documents must be compiled using the Standard bid documentation in line with
                                                             the General Conditions of Contract.
                                                            If there are special conditions, ensure that these are taken into account in line with
                                                             the Special Conditions of Contract.

                                                                                                                                        Page 57 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




    Check /               Higher level           Responsibility          Checks and Controls for bid documentation compilation as well as inviting and
Control Point               Context                                                                             receiving bids
                                                                             When calling for construction bids, Accounting Officers/Authorities should utilise the
                                                                              standard bidding documents issued by the CIDB.
                                                                             The Total Cost of Ownership must be established for the goods or services to be
                                                                              acquired.
                                                                             Minutes should be kept for all Committee Meetings. These should be filed
                                                                              appropriately.
                                                                             Where relevant, check that details on price adjustments for escalation or rate of
                                                                              exchange have been included in the bid documents.
                                                                             Determine the bid content taking into account the following: invitation to bid,
                                                                              application for Tax Clearance Certificate, pricing schedule, declaration of interest, the
                                                                              relevant preference claims forms, the NIPP form, technical specifications, the GCC
                                                                              and special conditions.
                                                                             Check if the necessary standards have been met in terms of bid compilation – if not,
                                                                              change the document.
                                                                             The Bid Documents must be approved by the Bid Adjudication Committee or
                                                                              Accounting Officer prior to invitation for bids.




                                                                                                                                                         Page 58 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




    Check /               Higher level           Responsibility          Checks and Controls for bid documentation compilation as well as inviting and
 Control Point              Context                                                                             receiving bids
Invite Bids            Acquisition              Bid                          Check whether the invitation of bids is undertaken in accordance with the provisions
                       (Competitive             Administration
                       Bidding Process)         section, within               of Section 4.9 of the Guide to Accounting Officers/Authority.
                                                the Acquisition              Check that a list of approved suppliers has been compiled for goods or services of a
                                                section
                                                                              technical/specialised nature.
                                                                             If there are no suppliers for the particular goods or services that are registered on
                                                                              the provincial supplier database, it is the responsibility of the acquisition section to
                                                                              communicate with the potential suppliers / bidders and advise them to contact
                                                                              Provincial Treasury for registration on the provincial supplier database.
                                                                             Bids should be advertised in at least the Provincial Gazette and local media.
                                                                             Check that a reasonable fee, where applicable, has been charged for bid documents.
Receive Bids           Acquisition              Bid                          Check whether the receiving of bids took place in accordance with the provisions of
                       (Competitive             Administration
                       Bidding Process)         section, within               Section 4.10 of the Guide to Accounting Officers / Authority.
                                                the Acquisition              Check that there is a tender/bid box and that the designated area for the receipt and
                                                section
                                                                              opening of bids is suitable.
                                                                             Check that the time for the bid opening is adhered to. This should be the same as for
                                                                              the deadline for receipt of bids or promptly thereafter. Bidders should not be
                                                                              requested or permitted to alter their bids after the deadline for receipt of bids.


                                                                             Check that where an extension to the submission date is required, that this extension


                                                                                                                                                          Page 59 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




    Check /               Higher level           Responsibility          Checks and Controls for bid documentation compilation as well as inviting and
Control Point               Context                                                                            receiving bids
                                                                              is advertised in the same media as the original advertisement before the original
                                                                              closing date.
                                                                             Requests for clarification and the bidder’s responses should be made in writing.
                                                                             All bids that are received after the due time must be rejected.




                                                                                                                                                        Page 60 of 124
CHAPTER 3

BID EVALUATION COMMITTEE

3.1     Establishment of Bid Evaluation Committee (BEC)
3.1.1   The Accounting Officer/Authority or delegate must establish and appoint one
        or more Bid Evaluation Committees, as necessary, preferably for a period not
        exceeding one year. The Bid Evaluation Committee shall be appointed before
        closing date for bids that must be evaluated by the Committee.


3.1.2   Should a member declare a conflict of interest at any stage, the member must
        recuse him/herself from the meeting or from considering the submission in
        respect of which the conflict of interest exists. An official may not be a member
        of the Bid Evaluation Committee and the Adjudication Committee/Award
        Structure. No person other than a member of the Bid Evaluation Committee
        or the officials rendering the Secretariat function are allowed to attend Bid
        Evaluation Committee meetings, except if an adviser/specialist is co-opted in
        respect of a specific bid, as approved by the Accounting Officer or his/her
        delegate.


3.1.3   The members of the committee must be informed in writing of their
        appointment to the Committee by the Accounting Officer/Authority or
        delegate.


3.1.4   As part of the bid evaluation pack, each member should declare his/her interest
        in writing pertaining to the specific bid in question.   Should an interest be
        declared which constitutes a conflict or is regarded as material, the member
        must recuse him/herself as a member of the Committee. The SCM Unit must
        then facilitate the appointment of a replacement member to the Committee if



                                                                           Page 61 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




          the remaining size of the Committee is not regarded as representative enough
          to proceed.



3.2       Composition of Bid Evaluation Committee
3.2.1     A Bid Evaluation Committee should be cross functional; at least four members
          of which one must be a senior manager.
3.2.2     The Bid Evaluation Committee should comprise of at least one supply chain
          practitioner, a financial analyst and official from the groups requiring the
          goods/services consisting of the commodity manager and an end user;
3.2.3     The SCM Unit must fulfill the professional secretariat function;
3.2.4     The Accounting Officer or delegate must appoint one of the members of the
          Bid Evaluation Committee as the chairperson of the Committee.                      The
          chairperson must be a senior manager;
3.2.5     The SCM unit must, in conjunction with the relevant user group and other
          relevant stakeholders, identify the appropriate persons to serve on the Bid
          Evaluation Committee; and
3.2.6     Always ensure that sufficient technical expertise, financial expertise as well as
          supply chain management expertise is represented on the Bid Evaluation
          Committee.




3.3       Functions of Bid Evaluation Committee
3.3.1     The Bid Evaluation Committee will evaluate all bids received that are above the
          quotation threshold and must also perform the following functions:
3.3.1.1            Evaluate offers received within the quotation threshold where
                   requirement is technically complex and/or there are risks involved that
                   warrant this process; and
3.3.1.2            Evaluate in accordance with the specification for a specific procurement
                   and with the evaluation criteria specified.
3.3.2     The bid evaluation committee must: -




                                                                                    Page 62 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




3.3.2.1            Evaluate each bidder’s ability to execute the contract in accordance with
                   the criteria specified in the bid documents;
3.3.2.2            Check in respect of the recommended bidder whether a tax
                   clearance certificate, issued by SARS has been submitted;
3.3.2.3            The compliance officer attending the meeting must assist the SCM Unit
                   to ensure compliance to policies and procedures;
3.3.2.4            Must evaluate bids in accordance with the PPPFA;
3.3.2.5            Must only evaluate bids in accordance with the criteria specified in the
                   bid documentation;
3.3.2.6            The      bid      evaluation      committee          will    submit   a   report    and
                   recommendations regarding the award of the bid or any other related
                   matter to the Bid Adjudication Committee for consideration and/or
                   approval after legal comment was given on the evaluation report (if
                   necessary) and included in the information to be presented to the Bid
                   Adjudication Committee;
3.3.2.7            Members of the Bid Evaluation Committee may present their reports to
                   the Bid Adjudication Committee to clarify uncertainties. Such members
                   shall not have any voting power on the Bid Adjudication Committee;
3.3.2.8            Verify whether national industrial participation programme requirements
                   have been compiled with, if the contract is in excess of R10 million;
3.3.2.9            Verify that the recommended bidder is not in the service of the state;
                   and
3.3.2.10           Submit       to    the     Bid     Adjudication         Committee     a   report    and
                   recommendations regarding awarding of the bid or any other related
                   matter which should include the result of the compliance officer
                   assessment.



3.4       Bid Evaluation Process
3.4.1     The evaluation criteria must be described ahead of the evaluation process and
          included in the specification.            The method of evaluation must be approved
          upfront by the Accounting Officer/Authority as that also influences the bidding



                                                                                             Page 63 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




          strategy whether inviting Expressions Of Interests for consulting services or
          inviting normal bids for commodities and products.



3.4.2     As a guide, there are four evaluation areas that may/must be included in the
          evaluation process. These are:
3.4.2.1            Administrative compliance;
3.4.2.2            Functional/Technical evaluation;
3.4.2.3            Commercial evaluation; and
3.4.2.4            Company Profile evaluation.


3.4.3     Before actual evaluation the SCM Unit shall do a compliance check that the
          quotation/bid documentation complies with the predetermined conditions and
          that all required forms are submitted, completed in full and legible. There forms
          are referred to as Standard Bidding Documents (SBDs).


3.4.4     The SCM Unit should ascertain whether quotations/bids received:
3.4.4.1            Include original, valid tax clearance certificates;
3.4.4.2            Have been properly signed;
3.4.4.3            Are accompanied by the required securities;
3.4.4.4            Are substantially responsive to the quotation/bid documents; and
3.4.4.5            Are otherwise generally in order.


3.4.5     The SCM Unit must ensure that the provider’s name (including the name of the
          company, name of any director or partner) does not appear on the list for
          restricted bidders/persons.


3.4.6     If a quotation/bid is not substantially responsive that is, it contains material
          deviations from or reservations to the terms, conditions and specifications in
          the quotation/bid documents, it should not be considered further.




                                                                                    Page 64 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




3.5       Administrative Compliance
3.5.1     All bids lodged must be scrutinized in respect of administrative compliance with
          the bid process. The committee must assess all bids and determine whether all
          forms were duly completed and required documentation submitted.


3.5.2     Elimination of bids at this point, with reasons provided, should be recorded on
          the Bid Opening Register and a record of all disqualified bids should be lodged
          with the relevant buyer.


3.5.3     During the scrutiny of the bid documents, the following must be attended to:
3.5.3.1            Correctness and availability of documents:
3.5.3.1.1          The bids should be thoroughly studied to establish the following:
                            All necessary certificates and the valid tax clearance certificate
                             issued by the SA Revenue Services are correctly completed,
                             signed in ink and are in the original;
                            All necessary forms are correctly completed, signed in ink and
                             are in the original; and
                            Necessary documents such as Bank Guarantees, Certificate,
                             Deposits, Reports and Sureties are attached.


3.5.3.2            Correctness and availability of information
3.5.3.2.1          There must be a thorough study of the bids to establish the following:
                            Prices and delivery periods indicated as firm or not;
                            Basis of delivery is clearly described; and
                            Any other information furnished by the bidder in a covering
                             letter, such as offering an alternative product, setting of own
                             conditions, comments on concept formal contract, etc.


3.5.3.3            Restricted Bidders List for Bid Defaulters
3.5.3.3.1          The SCM unit must check with National and Provincial Treasury that the
                   preferred bidder is not listed on the national or provincial register for
                   tender defaulters


                                                                                     Page 65 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




3.5.3.3.2          All bids that do not meet the administrative evaluation criteria should be
                   withdrawn from further consideration in the evaluation process. These
                   bids are classified as non-acceptable or non-responsive.


3.5.3.4            Functional/Technical Evaluation
3.5.3.4.1          The Secretariat within the SCM Unit will schedule the Bid Evaluation
                   Committee meeting and ensure that all members of the committee are
                   advised of the meeting schedule in a timely manner.
3.5.3.4.2          Members of the Bid Evaluation Committee meeting are informed of the
                   meeting schedule via the invitation letter.


3.5.4       At the Bid Evaluation Committee meeting the attendance register must be
            completed and each member of the committee must sign a declaration of their
            financial interest and declare that they/he/she will:
3.5.4.1            Accept the confidentiality of the meeting;
3.5.4.2            Not make known anything regarding the meeting, unless officially
                   authorized;
3.5.4.3            Not purposefully favour or prejudice anybody; and
3.5.4.4            Evaluate the bid document against the technical/functional evaluation
                   criteria.


3.5.5       SAMPLES
3.5.5.1            Establish whether samples were requested with the bid and whether the
                   required samples were included. The process and responsibilities for
                   evaluating samples should be determined prior to the issuing of the Bid
                   Specification document. Should samples require evaluation by specialists,
                   these specialists should be part of the bid evaluation committee and
                   provide objective evaluation.


3.5.6       INSPECTION AND PRESENTATIONS
3.5.6.1            Establish whether consultants need to do a presentation to the
                   evaluation committee that will assist the committee to do an in-depth



                                                                                    Page 66 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




                   analysis of the company expertise and methodology that has been
                   stipulated in the proposal.
3.5.6.2            Inspection of premises should also be performed during this stage which
                   will assist the evaluation committee with the selection of the preferred
                   bidder.      (Inspections       and     presentations        must   be   stipulated   as
                   requirements in the specifications or terms of reference).


3.5.7     FUNCTIONALITY EVALUATION
3.5.7.1            If functionality points are applicable, each member of the committee
                   must evaluate the bid against the functional criteria. Each member of the
                   committee must do the evaluation independently. This is not a consensus
                   driven process.
3.5.7.2            Bids should only be evaluated on the criteria that were included in the
                   bid specification document as well as against the weightings that were
                   agreed prior to the evaluation process. Additional criteria may not be
                   added.
3.5.7.3            All bids that do not meet the minimum technical and functional criteria
                   are not considered in the commercial evaluation.
3.5.7.4            The minimum score is established prior to the evaluation process and is
                   not used as a mechanism to exclude or include bids prior to the price
                   evaluation.
3.5.7.5            Bids that do not meet the minimum functional criteria, as stated in the
                   evaluation criteria contained in the bid document, are not used as a basis
                   for the price evaluation and must be excluded from the evaluation
                   process going forward.
3.5.7.6            The chairperson may request the committee members to submit written
                   motivations on their scoring should a material discrepancy be detected
                   in the values awarded.




                                                                                             Page 67 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




3.5.8     PRICE EVALUATION
3.5.8.1            The price must be evaluated in terms of the PPPFA using the pricing
                   guidelines. The committee members must develop their independent
                   view of the comparative prices, by:
                            Adding additional costs as specified by the bidder, if applicable;
                            Deducting unconditional discounts where offered, if applicable;
                            Determining a comparative price for each of the bids so that they
                             can be evaluated
                             o         The Technical and Price score together either adds up to
                                       80% or 90% of final score. The 80/20-preference point
                                       system must be used to calculate the points for price in
                                       respect of bidders/acquisition with a rand value equal to,
                                       or below R500,000.
                                       A Department may, however, apply this 80/20 preference
                                       point system for acquisition with a value less than R30,
                                       000 if and when appropriate.
                             o         The 90/10-preference point system must be used to
                                       calculate the points for price in respect of bids/acquisition
                                       with a rand value above R500,000.
                            Verify whether national industrial participation programme
                             requirements have been complied with, if the contract is in
                             excess of R10 million


3.5.8.2            THE 80/20 PREFERENCE POINT SYSTEM
                   A maximum of 80 points is allocated for price on the following basis:



                          Pt  P min
              Ps  80(1             )
                            P min

                                                                                      Page 68 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




          Where

          Ps = Points scored for price of bid under consideration
          Pt = Rand value of bid under consideration
          Pmin = Rand value of lowest acceptable bid submitted
          The 80/20 preference points formula must be used to calculate the points for
          price in respect of acquisitioning with rand value equal or above R30 000, and
          up to a rand value of R500, 000.


3.5.8.3            THE 90/10 PREFERENCE POINT SYSTEM
                   A maximum of 90 points is allocated for price on the following basis:




                          Pt  P min
              Ps  90(1             )
                            P min
          Where

          Ps = Points scored for price of bid under consideration
          Pt = Rand value of bid under consideration
          Pmin = Rand value of lowest acceptable bid submitted
          The 90/10 preference point formula must be used to calculate the points for
          price in respect of acquisitioning with a rand value above R500, 000 in terms of
          legislation with a maximum number of points for price of 90.




                                                                                    Page 69 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




3.5.8.4            Preference points MUST be calculated after prices have been brought to
                   a comparative basis (the specified criteria being the common
                   denominator). Points scored will be rounded off to 2 decimal places.
3.5.8.5            The points scored by a bidder in respect of specific HDI and RDP goals
                   must be added to the points scored for price. Only the bidder with the
                   highest number of points scored may be selected.


3.5.8.6            In the event of equal points scored, the bid will be awarded to the
                   bidder scoring the highest number of points for specific goals.


3.5.9     PREFERENCE POINT EVALUATION
3.5.9.1            The preference points are added to the functionality and price score to
                   come up with the overall score for each bid submission – as determined
                   by each member of the Bid Evaluation Committee.


3.5.9.2            The preference points are assigned against the Specific Objectives
                   criteria. It is therefore imperative that the specific objectives criteria be
                   included in the Bid Document.


3.5.9.3            A maximum of 20 or 10 points must be allocated for equity ownership
                   according to the stipulations in the regulations. For contracts with a
                   rand value equal to or below the prescribed amount R500, 000, a
                   maximum of 20 points may be allocated for specific goals provided that
                   the lowest acceptable bid scores 80 points for price.


3.5.9.4            For contracts with a rand value above R 500, 000 a maximum of 10
                   points may be allocated for specific goals provided that the lowest
                   acceptable bid scores 90 points for price.




                                                                                    Page 70 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




3.5.10 FORMULA FOR CALCULATION OF POINTS FOR EQUITY OWNERSHIP


                                                     NEP      =      Points          awarded    for    equity
                                                                    ownership by an HDI
            NEP = NOP X EP                           NOP =          The maximum number of points
                                100                                 awarded for equity ownership
                                                     EP      =      The        percentage       of     equity
                                                                    ownership by an HDI within the
                                                                    enterprise or business




3.5.11 CALCULATION OF THE CONSOLIDATED RESULTS
3.5.11.1       The Chairman will work with the committee members to determine the
               consolidated results of the evaluation process. This may entail calculating an
               average score across the different committee members.
3.5.11.2       If required, the committee chairman will have a casting vote if the
               committee cannot agree.


3.5.12 FORMAL CONTRACTS
3.5.12.1       When formal contracts are involved, the Legal Division is to be consulted
               to ensure that bidders have noted and accepted the contents thereof, and
               have not responded with counter-proposals.                           In the event of counter-
               proposals, the Legal Division will investigate and pronounce thereon. The
               inputs of the Legal Department in this regard is thus of vital importance.


3.5.13 COMPARATIVE SCHEDULE
3.5.13.1       The comparative schedule is developed by the Chairman of the Evaluation
               Committee (with the assistance of the bid committee secretariat from the
               department’s SCM Unit) as the document that is submitted to the Bid
               Adjudication Committee.
3.5.13.2       It is imperative that the schedule contains the maximum information to
               make the adjudication of the bid easier.



                                                                                                Page 71 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




3.5.13.3       After the schedule has been completed, indicate the position of each bidder
               in relation to the bidder who scored the highest in points.


3.5.14 VALIDITY OF BIDDERS
3.5.14.1          Check the diary for pending dates to ensure that recommendations are
                  made in good time to be verified and submitted for approval by the BAC
                  and that letter of acceptance may be posted before the validity of the bid
                  expires.
3.5.14.2          If the recommendations have not been received by the BAC, enquiry must
                  be directed to the acquisition section concerned, as well as initiating the
                  process to extend the validity of the bidders if necessary.
3.5.14.3          On receipt of the recommendation the BAC ascertains whether offers are
                  still valid. If not, all bidders are requested in writing to extend the validity
                  of their offers.


3.5.15 COMPANY PROFILE EVALUATION
                  Bidders must be requested to, provide the following information in their
                  bids:
3.5.15.1          Company background: date established, names of directors, affiliated to
                  groups;
3.5.15.2          Financial standing: Proof by financial institution and if necessary a copy of
                  financial statement;
3.5.15.3          Infrastructure: Offices, service centre, number of personnel etc; and
3.5.15.4          Expertise: Similar contracts, contact persons.



3.5.16 EVALUATING CONSULTING SERVICES BIDS
3.5.16.1      Within the ambit of the Preferential Procurement Regulations, 2001, bids/
              proposals for the appointment of consultants should be evaluated on the
              basis of functionality and price as well as the achievement of specified HDI
              and RDP goals. The evaluation should be carried out in three phases:
                   Functionality;
                   Price; and

                                                                                    Page 72 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




                  Preferential HDI/RDP goals.


3.5.16.2      The combined percentages allocated for functionality and price should total
              to 100%. The ratio to be used for the division between functionality and
              price should be determined and approved by the Accounting Officer and
              should be made known up-front in the bid documents. Score sheets should
              be prepared and provided to bid evaluations committee to evaluate the bids
              on functionality.


3.5.16.3      In view of impartiality, members of bid adjudication committees should not
              act as evaluation committee members.


3.5.16.4      The score sheet should contain all the criteria and the weight for each
              criterion as indicated in the TOR as well as the values to be applied for
              evaluation.       Each panel member should after thorough evaluation award
              his/her own value to every criterion without discussing any aspect of any bid
              with any of the other members.


3.5.16.5      Under no circumstances may additional evaluation criteria be added to
              those originally indicated in the bid documentation nor may the evaluation
              criteria be amended or omitted after closing of the bid.


3.5.16.6      The evaluation committee must ensure that a proper and unbiased
              specification, scoring criteria, and a fair preference point system with
              relevant breakdown of points/percentages have been provided within the
              sliding scale for the selected specified goals.


3.5.16.7      Score sheets should be completed and signed by the evaluation committee
              panel members and if required, written motivations could be requested
              from panel members in the event of vast discrepancies in the values awarded
              for each criterion.




                                                                                    Page 73 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




3.5.17 EVALUATION OF BIDS - FUNCTIONALITY, PRICE AND SPECIFIC GOALS
3.5.17.1      The evaluation should be carried out in three phases:
                  Functionality;
                  Price; and
                  Preferential HDI/RDP goals.


3.5.17.2      In the following example two bids will be evaluated on the 80/20 preference
              point system.         The 80 points have been converted to 100% with the
              following split:
              Functionality determined as 45%; and
              Price determined as 55%


3.5.17.3      The percentage scored for both functionality and price shall be combined
              and converted, in terms of Regulation 8 of the Preferential Procurement
              Regulations, to a number of points out of 80.


3.5.17.4      Points scored for specific goals or equity ownership as contemplated by the
              Preferential Procurement Policy Framework Act No 5 of 2000 will be
              calculated expressed as a number of points out of 20


3.5.17.5      The final score out of 100 will be derived by adding the points out of 80
              (functionality and price) and the points out of 20 (Equity ownership).


3.5.17.6      The first stage of the bidding process will be evaluated according to the
              following functional aspects:


              Assume two bids were received:
              Bid 1:          Bid price R 210, 000.00
              Bid 2:          Bid price R 235, 000.00


              First Stage:
              Functionality must be scored:


                                                                                    Page 74 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




              Following values are applicable for the evaluation of functionality per criteria:


              1: Poor, 2: Acceptable, 3: Good, 4: Very Good, 5: Excellent


              An example of a schedule to be used for scoring
                                                                               Total Score
                  Criterion                 Weight        Value 1 - 5         Functionality
            Qualification                    10 X             5
            Experience                       10 X             5
            Membership of
            professional institutes          10 X                5
            Subject matter
            experience                      10 X                 5
            Total                         40 (TW)                                 200
                                        Total weight                        Maximum possible
                                       is 10 x 4 = 40                            score


              The scores allocated for technical proposals during the first stage of the
              selection process shall be converted into the given percentage for
              functionality (i.e. 45%), by means of the following formula:




                                                           Where:
                                                           Ps= percentage scored for functionality by bid
                   So                                      under consideration
         Ps =      ------    x         Ap                  So= total score of bid under consideration
                   Ms                                      Ms= maximum possible score (i.e. 200
                                                           schedule above)
                                                           Ap=       percentage     points     allocated   for
                                                           functionality (i.e. 45%)




              It is important to note that the conditions of bid may stipulate that a bidder
              must score a specified minimum number of points for functionality to qualify
              for further adjudication. The accepted norm is 50% of the determined
              points.




                                                                                               Page 75 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




               Calculation of percentage scored for functionality per bid
               Assume:


               Bid 1:        scored 140 out of 200
               Bid 2:        scored 160 out of 200


                        Bid 1                                                       Bid 2




                             140                                                       160
                   Ps =      ------      x        45                           Ps =    ------   x        45
                             200                                                       200


                 Ps = 31.5%                                                    PS = 36 %




                   Second Stage:
                   Price must be scored:
                   The percentage scored for price (PF) shall be calculated as follows:


                   The lowest acceptable bid price will obtain the maximum percentage
                   allocated       for       price.    The   other     bids    with    higher       prices    will
                   proportionately obtain lower percentages based on the following
                   formula:


                                                             Where:
                                                             PF= Percentage scored for price by bid under
                   Pmin                                      consideration
         PF=       --------- x Ap                            Pmin= Lowest acceptable bid
                   Pt                                        Pt= Price of bid under consideration
                                                             Ap= Percentage allocated for price (55%)




                                                                                                Page 76 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




                   Calculation of percentage scored for price per bid


                         Bid 1                                                       Bid 2


                            210,000                                                    210,000
                   PF=       --------- x 55                                    PF=      --------- x 55
                            210,000                                                    235,000


                   PF = 55 %                                                   PF = 49.15 %


                   Second Stage Continue:


                   The percentage scored for functionality and the percentage
                   scored for price will be added together to give a percentage for
                   functionality and price per bidder.




                   Thus: Bid 1          31, 5% + 55% = 86.5%
                             Bid 2       36% + 49.15% = 85.15%


                   The percentage scored for both functionality and price shall be
                   converted to points out of 80 in terms of Regulation 8 of the
                   Preferential Procurement Regulations, by means of the following
                   formula:


                                                           Where:
                                                           Ps= Points scored for functionality and price
                                                           of the bid under consideration
         Ps=80 (1- Hs – Rs )                               Hs= Highest percentage scored by any
                          Rs                                      acceptable bidder for functionality and
                                                                  price
                                                           Rs= Percentage scored for functionality and
                                                                  price by bid under consideration



                                                                                                 Page 77 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




                   Calculation of converting to points out of 80
                        Bid 1                                                       Bid 2


         Ps =      80(1-(86.5 – 86.5))                               Ps =      80 (1- (86.5 – 85.15))
                                86.5                                                        85.15
          Ps =     80 x (1-0)                                         Ps =     80 (1- 0.0158)
          Ps =     80                                                 Ps = 78.72




                   Third Stage:
                   Preferential HDI/RDP goals


                   The points awarded in respect of each of the facets of equity ownership
                   (HDI, Women and Disabled) shall be calculated by means of the
                   following formula:




                                                           Where:
                                                           NEP =       Points       awarded      for    equity
                                                                       ownership in each category of

             NEP = NOP X EP                                            equity ownership

                                100                        NOP =       The maximum number of points
                                                                       awarded for equity ownership in
                                                                       that specific category
                                                           EP    =     the percentage equity ownership in
                                                                       each category of equity ownership
                                                                       within the enterprise or business.




                   The points awarded for equity ownership in each category of equity
                   ownership shall be added together and recalculated to give a point out
                   of 20.



                                                                                                Page 78 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




                   The bidder’s final score shall be calculated by adding the points scored
                   for functionality and price of the bid under consideration to the points
                   awarded for equity ownership.


                   Calculation of conversion
               Bid 1 has 55% HDI                                          Bid 1 has 10% Women


           NEP = 12 X         55                                      NEP = 4 X         10
                             100                                                        100
           NEP = 6.6 points                                              NEP = 0.4 points




                   Example of preference HDI points 20/80 and final score
            HDI Goals                    Max Points               Bid 1                Bid 2
HDI                                       12 (NOP)             55% (EP) 6.6         65% (EP) 7.8
Women                                      4 (NOP)             10% (EP) 0.4         35% (EP) 1.4

Disabled                                        2                  0% 0                0% 0

Eastern Cape Based                              2                    2                   2

Total HDI/RDP                              20 (NEP)                  9                 11.2

Points for Functionality & Price                                     80                78.73

Total combined Score                                                89                 89.93




3.6        Cancellation and Re-invitation of Bids
3.6.1      Bids should be cancelled and re invited in the following circumstances:
3.6.1.1            In the event that, in the application of the 80/20 preference point system
                   as stipulated in the bid documents, all bids received exceed the
                   estimated rand value of R500, 000; and
3.6.1.2            In the event that, in the application of the 90/10 preference point system
                   as stipulated in the bid documents, all bids received are below the
                   estimated rand value of R500, 000.


3.6.2      Bids must be re-invited and the correct preference point system be published.


                                                                                                   Page 79 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




3.7      The Recommendation Report
3.7.1    Recommendation/submissions to the Bid Adjudication Committee must be clear
         regarding the content and purpose of the matter for which approval is desired.


3.7.2    The practice of submitting memoranda, reports, contracts, agreements, invoices
         and the like and requesting general approval is not acceptable. However, such
         documents may be forwarded as annexures supporting the request.


3.7.3    Facts must be set out fully and clearly in the submission and reference must be
         made only to those portions of the attached documents, which are directly
         related to the approval being requested.


3.7.4    Uniformity        in   respect       of   details     where       submissions   deal   with   the
         recommendation of bids is essential. The following minimum information is
         required:

        Name of the bidder
        Price and whether the price is firm or not
        Basis of delivery
        Delivery period
        Trade mark
        Country of origin
        Preference claimed
        Comparative price
        In the case of single bids, the previous purchase price must also be indicated where
         possible
        There must be uniformity in the sequence of categories in which bids are
         recommended, namely:
         o Only bid, price reasonable and in accordance with the specification.
         o Highest scorer and in accordance with the specification. (No lower priced bids are
              passed over)
         o Highest scorer in accordance with the specification. (Higher scoring bids are
              passed over)



                                                                                            Page 80 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




         o All higher scoring bids must be listed and the reasons for passing over must be
              furnished where bids are awarded on a point basis, any bids which scored a higher
              point, but are not recommended, must be listed and reasons for passing over must
              be furnished)
         o Highest scorer and acceptable although not strictly to specification
         o Highest acceptable scorer although not strictly to specification


        A discussion, which explains the recommendation, must always be provided where the
         recommendation is not self-explanatory in the light of the data already provided




3.8      Information to be Supplied with Recommendations for
         Award Of Bids


3.8.1    The Bid Evaluation Committee must ensure that they are in possession of all
         relevant information so that accountable decisions can be taken. Since each
         case is unique, it is not possible to specify all the information, which must be
         supplied. However, the following points must be addressed when they arise:


Qualification     of    bidder’s     own          o    When bidders do not withdraw conditions, which
conditions                                             are unacceptable or conflicting, reasons must be
                                                       provided for those conditions to be accepted.
                                                  o    When such conditions have financial implications
                                                       or their withdrawal implies a second chance to
                                                       bid, the facts must be pointed out to the Bid
                                                       Adjudication Committee




Small acceptable deviations                       o    The Bid Evaluation Committee must be convinced
                                                       that other bidders' competitiveness is not
                                                       adversely affected by the acceptance of a bid,
                                                       which is not strictly to specification



                                                                                                Page 81 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




Increase of prices before validity                o    Such cases must be pointed out to the Bid
lapses                                                 Adjudication Committee so that it may decide
                                                       what action to take against the bidder concerned.
                                                       Such a request may not be considered, as it
                                                       allows the bidder a second opportunity to bid




Increase of prices after validity                 o    This    may     be    construed      as    an   avoidable
was extended                                           expenditure and must be reported to the
                                                       Provincial     Treasury.        Therefore       the   Bid
                                                       Adjudication Committee must be informed of the
                                                       circumstances         and      the        person/concern
                                                       responsible for the delay.


Reduction of prices                               o    A reduction of prices and the effect of it on the
                                                       award of bids must be brought to the attention of
                                                       the Bid Adjudication Committee. If the reduction
                                                       in the price affects the recommendation, an
                                                       alternative recommendation must also be made.
                                                       Such a reduction may not be considered during
                                                       the original bid validity period, as it allows the
                                                       bidder a second opportunity to bid




Passing over lower bids                           o    Reasons for passing over higher scoring bids must
                                                       be accountable. For instance, it is not enough to
                                                       indicate that the offer deviates from specification.
                                                       It must be indicated what was specified, a
                                                       description of the deviation must be given and the
                                                       effect of the deviation on the use/operation of the
                                                       item must also be pointed out. Where there are
                                                       deviations     in    respect   of    several    different
                                                       properties, only the determinative deviations
                                                       should be dealt with



                                                                                                  Page 82 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




Reasonableness of prices                          o    Where the reasonableness of prices cannot be
                                                       substantiated or where the weighting of non-firm
                                                       prices has an effect on the priority order of
                                                       recommendations, all relevant information must
                                                       be gathered and made available to the Bid
                                                       Adjudication Committee




Sharing of contracts                               o If a contract has to be shared, full reasons for
                                                        sharing must be supplied and the basis of the
                                                        split must be provided as well as the conditions,
                                                        which will apply




Evaluation of samples                              o When an item is rejected because samples have
                                                        been evaluated and do not measure up to the
                                                        required standards, it must be pertinently stated
                                                        in the recommendation that the product has
                                                        been tested, which organization tested it and the
                                                        details of the deviations and their effect on the
                                                        use/operation of the product must be indicated




Number of bid documents issued                     o In order for the Bid Adjudication Committee to
to prospective bidders                                  determine the competitiveness of the bidding
                                                        process, the Department must keep record of
                                                        the number of bidding documents issued to
                                                        prospective bidders as well as the number of
                                                        bids received as a result of the invitation. This
                                                        information       must           be     pointed     out    in
                                                        recommendations             to    the    Bid    Adjudication
                                                        Committee




                                                                                                       Page 83 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




3.9      Recommendations
3.9.1    GENERAL
         It is essential that recommendations by the Bid Evaluation Committee (BEC) are
         as complete as possible to enable the Bid Adjudication Committee (BAC) to
         make sound and justifiable decisions. Any omission of important information
         could lead to the awarding of contracts to incorrect bidders, resulting in bidders
         passed over claiming compensation from the Department.                             Such incorrect
         awarding of contracts would not be in line with the Constitution that requires
         the bidding system to be fair and just.


3.9.2    SUBMISSIONS
         Consult        the     procurement           delegations        to     ascertain   whether    the
         recommendation may be finalised administratively, or whether it must be
         submitted to the Bid Adjudication Committee (BAC).                           Original and signed
         recommendations by the Bid Evaluation Committee (BEC) are to be submitted
         timely to the bid office or the BAC. This will enable distribution of submissions
         to members for scrutiny prior to the meetings.


3.9.3    INFORMATION
         Bid recommendations to the Bid Adjudication Committee (BAC) must be in
         writing. Due consideration must be given to establish the following:
                  Which offer is recommended;
                  If the offer is according to specification;
                  Whether sufficient motivation is furnished why bidders with higher in
                   points are passed over;
                  If it is indicated how the deviations from specification affect the
                   utilisation of the item; and
                  If the submission reflects all the facts as indicated in the offers received.


3.9.4    CLARIFICATION
         If certain aspects of the recommendation concerning any offer received, or any
         aspect of the bids received, need to be verified or negotiated, ascertain from


                                                                                             Page 84 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




         the procurement delegations at which post level or from which bid committee,
         the necessary approval for such verification or negotiation must be obtained and
         make a submission regarding the relevant aspect to the BAC, on receipt of the
         necessary approval, take appropriate action and ensure that documentary proof
         of such verification or negotiation is obtained and filed.


3.9.5    INCOMPLETE RECOMMENDATIONS
         If the recommendation is incomplete and time does not allow for the matter to
         be referred back, supplementary comments are to be written by the acquisition
         office and attached to the recommendation before its submission to the BAC.




3.9.6    ADMINISTRATIVE ACCEPTANCE
         The recommendations in respect of bidders must be considered and accepted/
         amended by the Bid Evaluation Committee (BEC), prior to approval by the
         BAC, if applicable


3.9.7    SIGNING OF COMPARATIVE SCHEDULE
         Acceptance of bids within the department is done by the signing of the
         comparative schedules by the chairperson of the BAC.                       Only once the
         comparative schedule has been signed, indicating that the recommendations
         have been accepted, may the bids be processed further.




                                                                                      Page 85 of 124
 Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




 SAMPLE BID COMPLIANCE CHECKLIST

   BIDDER
   NAME
   BID NUMBER
   DATE
                                       Mark the appropriate box 
                                                  GENERAL
                ITEM CHECKED                                   YES          NO       COMMENTS
Is this an unsolicited bid?                                                 
Have the documents been signed?                                             
Is the signatory duly authorized to sign the
bid?                                                                        
Is a valid Tax Clearance Certificate included?                              
Are the required securities attached?                                       
Are the documents substantially responsive
to the advertised invitation to bid?                                        
Does the bidder’s name appear on the
Register of Restricted bidders?                                             
Do any of the Supplier’s Directors names
appear on the Register of Restricted bidders?                               

                                  ADDITIONAL INFORMATION
                ITEM CHECKED                                   YES          NO       COMMENTS
Has a discount been offered?                                                
Have there been any authorized negotiations
with the Supplier?                                                          
Has the Declaration of Interest been signed?                                
Has the price been confirmed (Only in the
event of a major difference to the market-                                  
related estimate)
Has a Site visit been completed?                                            




                                                                                       Page 86 of 124
 Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




                         ADDITIONAL INFORMATION (Continued)
                ITEM CHECKED                                   YES          NO       COMMENTS
Have the PPPFA Preferences claimed, been
verified?                                                                   
Has a validity period been specified by the
bidder?                                                                     
Has the bidder stipulated any of his/her own
conditions?                                                                 
Has the bidder offered new or unknown
products?                                                                   
Has the country of origin of goods been
specified?                                                                  
Are there any deviations from the
specifications?                                                             
Has the bidder submitted an alternative offer?                              
Has the bidder improved on the
specification?                                                              
Are there equal offers?                                                     
Does the bidder provide additional
quantities?                                                                 
Have the prerequisite samples been
submitted?                                                                  
Is the bid for a period of more than 1 year?
Has the bidder suggested sub-contractors?                                   
Is the bidder a “Joint Venture”                                             
Has the bidder been cleared by the dti? (If
the contract is worth more than R10                                         
million)(NIPPA)


NAME:                                                       SIGNATURE:

PERSAL
NUMBER:                                                                  DATE:




                                                                                       Page 87 of 124
Sample Quote/Bid Evaluation Score Sheet

BID                                                             BID
NUMBER:                                                DESCRIPTION:
                                                        BEC MEMBER
DATE:
                                                             NAME:
PPPFA            80/20                             
SCORING          90/10                                   PROGRAM:
SYSTEM           Confirmed in original documents   

     OBJECTIVE       WEIGHT                        BIDDER 1   BIDDER 2   BIDDER 3   BIDDER 4   BIDDER 5       BIDDER 6
ADMINISTRATIVE COMPLIANCE
All bids are administratively
compliant and acceptable as per
Checklist.
FUNCTIONALITY
   1
   2
   3
   4
   5
   6
FUNCTIONALITY SCORE




                                                                                                          Page 88 of 124
PRICE
   Bid/quotation amount            R          R          R          R          R             R
PRICE SCORE

COMBINED SCORE


      OBJECTIVE            WEIGHT   BIDDER 1   BIDDER 2   BIDDER 3   BIDDER 4   BIDDER 5       BIDDER 6
SPECIFIC OBJECTIVES
   1
   2
   3
   4
   5
SPECIFIC OBJECTIVE
SCORE

TOTAL SCORE


BEC MEMBER SIGNATURE:                                                DATE:




                                                                                           Page 89 of 124
    Check /       Higher level       Responsibility                            Checks and Controls for the evaluating bids
 Control Point       Context
Evaluate Bids    Acquisition        Bid     Evaluation        Check that a Bid Evaluation Committee is established in accordance with the relevant
                 (Competitive       Committee                  Practice Note and is distinctly separate in composition and function from the other
                 Bidding Process)   (including       Bid       Bid Committees.
                                    Administrative            A bidder must be registered on the provincial supplier database prior to the closing of
                                    section)                   bids for the goods or services.
                                                              The bid documents should be checked for completeness in terms of: presence of
                                                               SARS Tax Clearance Certificate, Supplier registration (check provincial supplier
                                                               database), proper signatures, required securities and responsiveness.
                                                              Bid documentation that is found to be incomplete should be rejected.
                                                              The Bid Evaluation Committee will need to evaluate the bids in terms of the
                                                               specification and the specified criteria stipulated in the bid document.
                                                              Check that bids are evaluated with due consideration of quality.
                                                              Accounting Officers/Authorities should ensure that neither the recommended bidder
                                                               nor any of the directors are listed as companies/directors/persons restricted to do
                                                               business with the public sector.
                                                              Check that the bids are evaluated in terms of the Preference Point and other
                                                               conditions of contract criteria. Check whether preference points have been awarded
                                                               for goals and points for price calculated accurately.
                                                              Check whether a market assessment has been undertaken.
                                                              Check that suppliers/service providers that have submitted bids are not blacklisted.

                                                                                                                                             Page 90 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




                                                                              Refer to the relevant Practice Note.
                                                                             Verify true ownership of businesses (to avoid fronting).
                                                                             Minutes should be kept for all Committee Meetings. These should be filed
                                                                              appropriately.
                                                                             In order to manage risk, price adjustments for escalation and/or ROE (rate of
                                                                              exchange) should be carefully considered.
                                                                             With price adjustments for escalation, check that the best option was chosen after a
                                                                              careful analysis of all related aspects.
                                                                             With price adjustments based on the ROE, a decision of who should take
                                                                              responsibility for any absorption of the fluctuation of a currency needs to be made.
                                                                              Check that this decision was made by the Accounting Officer/Authority, after
                                                                              thorough analysis of relevant information and was determined on a case-by-case basis.
                                                                              Price adjustments based on ROE fluctuations should be allowed only on the imported
                                                                              contents of the commodity and to meet only the suppliers’ additional costs of the
                                                                              imported content.
                                                                             Bids that do not meet the criteria should be rejected.
                                                                             If all bids have been rejected, check whether the requirements for the rejection of all
                                                                              bids have been complied with.
                                                                             Check that in situations where the 80/20 principle is being applied and all bids
                                                                              submitted have exceeded the departmental threshold; the process is cancelled and
                                                                              that there is a re-invitation for bids.
                                                                             Check that in situations where the 90/10 principle is being applied and all bids
                                                                              submitted are lower than the departmental threshold; the process is cancelled and

                                                                                                                                                            Page 91 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




                                                                              that there is a re-invitation for bids.
                                                                             If all bids have been rejected for reasons of: non-responsiveness, excessive cost or
                                                                              insufficient competition; a reviewal process may take place. Under circumstances
                                                                              where there has been a review process and/or changes made to bid scope, the
                                                                              institution may invite more bids or advertise further. The standard controls for
                                                                              inviting and receiving bids then applies.
                                                                             Once a thorough evaluation has been completed by the Bid Evaluation Committee, a
                                                                              written recommendation should be forwarded to the Bid Adjudication Committee.




                                                                                                                                                         Page 92 of 124
CHAPTER 4:

BID ADJUDICATIONCOMMITTEE

The role of the bid adjudication committee is to adjudicate bids submitted and, either award
them or recommend acceptance thereof to the Accounting Officer or his/her delegate.




             The    Bid    Adjudication     Committee          assesses    if   the   specific
              procurement process followed, is in line with the approved SCM
              policy and procedures, that the evaluation is fair and sound, the
              deal is acceptable and in the Department’s best interest, and then
              approves the recommendation.

             If not delegated to approve, the Bid Adjudication Committee
              forwards it s recommendation to the Accounting Officer for final
              approval.

             The Adjudication Committee and the Accounting Officer have the
              power to amend or cancel concluded agreements if delivered
              goods and/or services do not conform to specifications, subject to
              the relevant department’s Procurement Delegations

             Any decision regarding the adjudication of a contract is final




4.1       Mandate,         Role    and     Function        of     the      Bid    Adjudication
          Committee
4.1.1     Sections 44 and 56 of the Public Finance Management Act empower Accounting
          Officers/Authorities to delegate powers or instruct any official in that department,
          trading entity, constitutional institution or public entity to perform any of the duties
          assigned to the Accounting Officer in terms of the Act.


                                                                                       Page 93 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids



4.1.2    Sections 38 (1) (a) (iii) and 51 (1) (a) (iii) of the Act, prescribes that Accounting
         Officers/Authorities must ensure that the institution has and maintains an appropriate
         procurement and provisioning system which is fair, equitable, transparent,
         competitive and cost-effective.




4.1.3    Treasury Regulation 16A6.2 stipulates that an institution's supply chain SCM system
         must; inter alia, provide for the adjudication of bids through a bid adjudication
         committee, the establishment, composition and functioning of bid specification,
         evaluation and adjudication committees and the selection of bid adjudication
         members


4.1.4    In terms of the above requirements the Bid Adjudication Committee must consider
         the recommendations/reports of the Bid Evaluation Committee and depending on
         the delegated powers make an award or a recommendation to the Accounting
         Officer for consideration.



4.1.5    The SCM Unit’s representative must present the Bid Evaluation Committee’s
         recommendation report to the Adjudication Committee for consideration.              Any
         queries and answers as well as the decision of the Adjudication Committee must be
         recorded in writing and signed by the members.


4.1.6    Once approval has been granted, the SCM Unit may commence preparing the
         contract or other contractual documentation. The SCM Unit must issue a written
         letter of acceptance to the successful bidder, prior to an order being issued in favour
         of the latter.


4.1.7    It is essential to know that the power to arrange for the procurement of goods and
         services or selling of moveable department property is vested in the Accounting
         Officer in terms of the PFMA; to allow for effective workload management,
         authorities are delegated to officials in the Department.




                                                                                    Page 94 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids



4.2       Establishment of Bid Adjudication Committee (BAC)
4.2.1     The Accounting Officer/Authority shall establish the necessary award structures to
          perform the award/adjudication of quotations and bids.


4.2.2     The following award structure must be provided for: -
4.2.2.1            A delegated officials for awards up to the quotation threshold or as delegated;
4.2.2.2            One standing Bid Adjudication Committee for awards above the quotation
                   threshold value of R500, 000 and up to an unlimited amount, as delegated by
                   the Accounting Officer;
4.2.2.3            The award structure for a specific quotation/bid cannot be:
                             An official who performed the evaluation or made a recommendation
                              in respect of that quotation/bid;
                             A person who served as member on the Bid Evaluation Committee
                              which processed that quotation/bid; or
                             Who is not cleared at the level of confidential.
4.2.2.4            No person, who has participated in or advised the Bid Evaluation Committee,
                   may form part of the final decision-making process regarding the adjudication
                   of bids;
4.2.2.5            The Accounting Officer/Authority must determine the term of office for
                   members of the Bid Adjudication Committee;
4.2.2.6            The Accounting Officer/Authority may also appoint secundi to temporarily
                   replace members of a standing committee that are absent from meetings due
                   to illness, leave, etc;
4.2.2.7            The Accounting Officer/Authority will also decide whether or not such
                   secundi will have the same powers as members;
4.2.2.8            The members of the Bid Adjudication Committee must be appointed in
                   writing by the Accounting Officer/Authority; and
4.2.2.9            Predetermined meetings at regular intervals shall be held, but the Bid
                   Adjudication Committee may also meet ad hoc if required.


4.2.3     Before the start of each meeting, each member should declare his/her interest in
          writing pertaining to the specific bid(s) in question and declare that they will:
4.2.3.1             Accept the confidentiality of the meeting;


                                                                                      Page 95 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids



4.2.3.2            Not make known anything regarding the meeting, unless officially authorized;
                   and
4.2.3.3            Not purposefully favour or prejudice anybody.


4.2.4     Should an interest be declared which constitutes a conflict or is regarded as material,
          the member must recuse him/herself as a member of the Bid Adjudication
          Committee.         The SCM Unit must then identify a replacement member for the
          Committee if the Committee does not comply with the prescribed minimum of 4
          senior managers.


4.2.5     The SCM Unit shall timely route the recommendations to the Bid Adjudication
          Committee for consideration.


4.2.6     The SCM Unit shall perform secretariat functions for Committee meetings.




4.3       Composition of a Bid Adjudication Committee
4.3.1     The Bid Adjudication Committee must consist of at least four Departmental senior
          managers or higher and must be constituted as follows:


                 Specific Member                                                    Specific Level


Chairperson                                                    Where possible, the chairperson should be the
                                                               Chief Financial Officer


Vice Chairperson                                               The Vice Chairperson should be on at least
                                                               director/senior manager level


Other Members                                                  Should be a cross functional team comprising of
                                                               senior officials or higher of whom at least one
                                                               must be a supply chain management practitioner
                                                               It is also advisable to appoint a technical expert
                                                               in a particular field, who is an official of the



                                                                                                      Page 96 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids



                                                               Department, if the Department has such an
                                                               expert/s as a member/s to the committee


Quorum                                                         The Bid Adjudication Committee should only
                                                               consider recommendations/reports if at least
                                                               60% of its members are present




                                                                                                 Page 97 of 124
4.4     Duties and Powers of the Various BAC Members

  Committee                         Functions                              Skills Required            Powers & Rights
   Members
Bid Secretariat   Must comprise of members of the acquisition Have a sound working knowledge of NA
                  office within the SCM Unit, which will best the      supply    chain   management
                  support the applicable BAC and perform the procedures and legislation
                  role of the Secretary of the BAC concerned.
                  The bid committee Secretariat will see to the
                  administrative matters of the various evaluation
                  and adjudication committees. This will entail the
                  following:-
                      The Secretary shall in conjunction with the
                       chairperson/ vice chairperson compile an
                       agenda and determine dates of meetings
                      Give notice of proposed meetings to
                       committee members
                      Process       and        distribute       all
                       submissions/reports   together   with    the
                       agenda to committee members at least
                       three working days before the actual
                       meeting takes place

                                                                                                                    Page 98 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




                              Bringing     all   relevant      correspondence,
                               documents or reports relating to matters
                               on the agenda to the meeting
                              Minute all decisions taken at meetings and
                               finalise the minutes
                              Adhere strictly to the stipulations of the
                               National Archives of South Africa Act, No.
                               43 of 1996 and accompanying directives
                              Ensure that the proceedings at meetings
                               are recorded mechanically
                              Give written feedback of all decisions taken
                               by the committee
                              Be responsible for all the administrative
                               tasks of the Committee
                              Have all regulations, practice notes and
                               circulars available at all meetings in case
                               they need to be referred to. This will also
                               provide clarity on any technical issues
                              Counting the votes when voting takes
                               place, whether the voting is done by show
                               of hands or by ballot papers
                              Record the votes and minute reasons for
                               votes if so requested by a member

                                                                                    Page 99 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




                              Facilitating in any possible way the proper
                               conduct and the efficient handling of the
                               business of the meeting
The       Chairman            Maintain order during a meeting and ensure              Patience                                     Has a casting vote as well as a
will be the CFO if             that business is conducted in an orderly                Tact                                          deliberate vote
it       is       Bid          manner                                                  Balance                                      Retains all his/her rights as a
Adjudication                  Before opening a meeting, ensure that it is                                                           member
                                                                                        Ability to command the respect
Committee                      properly constituted                                     of the meeting                               May adjourn a meeting
                              Protect the rights of every member                      Impartiality     (objectivity)        in     May rule on points of order which
                              Vacate his / her seat to the vice                        his/her ruling                                will be final
                               chairperson, should he/she wish to partake              Resourcefulness                              May withdraw any proposal or
                               in a discussion in a partial manner                     Strong leadership                             other matters under discussion
                              Regulate participation in discussions                   Ability to give clear direction               before it is put to the vote; and
                              Deal with items in sequence of the agenda                when      problems     and       conflict    Convene extraordinary committee
                              Ensure that members know exactly what                    occur                                         meetings on request
                               they are required to vote on
                              Ensure that only one member holds the
                               floor at any time
                              Provide guidance by directing the meeting,
                               but shall not dominate
                              Conduct meetings in a formal manner                                                                   Each meeting shall be presided
                                                                                                                                      over by the chairperson.      In the
                              Formulate clearly the decisions to be

                                                                                                                                                              Page 100 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




                               minuted and sign and approve the minutes                                                  absence of the chairperson, the
                               after    they     have       been    verified    for                                      vice chairperson will preside as
                               correctness.                                                                              chairperson, in which case h/she
                                                                                                                         will occupy the chair for the
                                                                                                                         duration of the meeting, even if
                                                                                                                         the    chairperson   should      arrive
                                                                                                                         during the course of the meeting.
                                                                                                                        Each    member       attending     the
                                                                                                                         meeting owes deference to the
                                                                                                                         chairperson and may be removed
                                                                                                                         if that person does not respect the
                                                                                                                         authority of the chair
The             vice-         In the absence of the chairperson, preside See skills required for Chairperson        The Vice-Chairperson has the same
chairperson                    as chairperson                                                                        powers as members
should be on at               Take the seat of and act as chairperson,
least       director           should the chairperson wish to partake in
level and has the              partial discussions
same powers and               In the event that both the chairperson and
duties as those of             vice-chairperson       are     absent     from       a
members and in                 meeting, the members present may elect
addition,     where            one of their members to preside at such
necessary, shall:              meeting
Members of the                At all times act in accordance with above-              Be fully conversant with the Members have the right to:

                                                                                                                                                  Page 101 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




Committee                      mentioned       legislation,    regulations      and   powers and limitations of the                     Have advance knowledge of the
                               procedures                                             Committee        as    well        as    all       agenda
                              Apply their minds to matters at hand in                directives pertaining to Supply                   Submit proposals and participate in
                               order to take meaningful and accountable               Chain Management, including the                    proceedings
                               decisions and in the event of doubt or                 relevant     sections         of the     Vote
                               uncertainty, to propose that matters be                Constitution,         Public Finance
                                                                                                                           Have a dissenting voice and have
                               referred back for clarification                        Management             Act       and
                                                                                                                           the reasons therefor recorded
                                                                                      accompanying                Treasury
                                                                                      Regulations,

                              In advance, furnish a written apology should          Preferential Procurement Policy
                               he/she not be able to attend a meeting                 Framework Act, Broad Based

                              Strive to be punctual for meetings and to              Black Economic Empowerment

                               stay for the duration of a meeting                     Act        and         accompanying

                              Prepare properly for each meeting by                   regulations, all directives issued
                                                                                      by National Treasury / relevant
                               studying           the          agenda           and
                                                                                      Provincial     Treasury       and       the
                               submissions/reports
                                                                                      delegated powers issued by the
                              Be familiar with meeting procedures in
                                                                                      Accounting Officer /Authority
                               order to make a contribution in the
                               correct manner
                              Refrain from repetition and duplication of
                               contributions by other members
Co-opted                 Members of the Bid Evaluation Committee may                                                                    Co-opted members/advisors have


                                                                                                                                                               Page 102 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




members/                 present their recommendations / reports to the                                            the same powers and duties as
advisors                 Bid Adjudication Committee and clarify any                                                members but excluding the
                         issues, but shall not have any voting powers                                              right to vote on any matter
                         A co-opted/advisory member is appointed to                                                under discussion
                         strengthen the cross-functional composition of a
                         committee, based on their specialist/technical
                         knowledge.
Observers
     The chairperson may, on request, allow officials to attend a meeting as observers. Observers have no participation in the proceedings, except to
      advise the representative (member) or the committee if permitted by the chairperson.          Observers should be cautioned to maintain the
      confidentiality of the discussions.




                                                                                                                                          Page 103 of 124
4.5     Statutory Obligations
4.5.1   CONDUCT OF BAC MEMBERS
4.5.1.1 A person as a member of the Committee obtains certain rights such as a share in the
        control of the matter for which the meeting is constituted and the member may
        exercise this right by making proposals, voting etc. A member’s conduct at the
        meeting must however not infringe on the rights of others. The rules of the conduct
        are based on mutual respect for the rights of each other and respect for the purpose
        of the meeting.


4.5.1.2 Members must accept that:
4.5.1.2.1      The chairperson must be respected;
4.5.1.2.2      The chairperson has the right to interrupt and ask a member to stop speaking
               if the address is repetitive or irrelevant to the matter under discussion;
4.5.1.2.3      A member must stop speaking if ruled out of order by the chairperson;
4.5.1.2.4      Decisions are taken by general consensus or be a show of hands when a
               matter is decided upon by voting;
4.5.1.2.5      Once a decision has been taken it is final and not open for discussion unless
               additional information which was not available at the time of decision making
               can be produced;
4.5.1.2.6      Information and documentation are confidential;
4.5.1.2.7      A member including the chairperson or vice chairperson shall beforehand
               declare his/her interest regarding any matter serving before the Committee
               and the member will then recuse her/himself during the discussion of that
               matter. No discussion by the member concerned will be allowed prior to the
               serving of that submission/report and such a member may not retain that
               specific submission/report. Any personal interests that may infringe, or might
               reasonably be deemed to infringe on a member’s impartiality in any matter
               relevant to their duties must be recorded;
4.5.1.2.8      Outvoted members must abide by the majority decision of the Committee;
               and
4.5.1.2.9      No communication should be made with a bidder/contractor by any member
               prior to or after any meeting


                                                                                 Page 104 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids



4.5.2    PERSONAL CONDUCT
4.5.2.1 Each member of SCM Committees shall undertake to:
4.5.2.1.1          Exercise the duty of utmost care to ensure reasonable protection of the
                   assets and records of the procurement bodies;
4.5.2.1.2          Act with fidelity, honesty, integrity and in the best interest of these
                   procurement bodies in overseeing all procurement activities within the
                   Department, as the case may be;
4.5.2.1.3          On request, to disclose to the Executing Authority or the Provincial
                   Legislature, all material facts, including those reasonably discoverable, which in
                   any way may influence the decisions or actions of the Executing Authority;
4.5.2.1.4          To seek, within the sphere of influence of each individual member and the
                   BEC collectively, to prevent any prejudice to the financial interest of the state;
4.5.2.1.5          Not to use the position or privileges of, or confidential information obtained
                   as, a Member for personal gain or to improperly benefit another person; and
4.5.2.1.6          To adhere to the letter and spirit of the Treasury Regulations to the extent
                   that these may apply to the committees.


4.5.3    ETHICAL BEHAVIOUR
4.5.3.1 Each member undertakes to:
4.5.3.1.1          Act within his/her powers and in the interest and for the benefit of the
                   committee;
4.5.3.1.2          Carry out his/her duties with the skills and care to be expected from a person
                   of his/her knowledge and experience and exercise their own judgement;
4.5.3.1.3          Not to permit wastage of state resources;
4.5.3.1.4          Report accurately to the Executing Authority on the performance and
                   prospects of the committees and justify the confidence reposed in him/her;
4.5.3.1.5          In case of an audit, furnish an auditor with all information and explanations,
                   which the auditor requires for the performance of his/her functions;
4.5.3.1.6          Not carry on the business of these committees recklessly or negligently;
4.5.3.1.7          Not to be a undeclared party/shareholder under or beneficiary of:
                   o         A contract for the provision of goods or services to the departments;
                   o         A contract for the performance of work, other, than as a Member of
                             these committees;


                                                                                      Page 105 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids



                   o         A financial interest in any business of the committees; and
                   o         A fee or other consideration to appear on behalf of any other person
                             before the committees.
4.5.3.1.8          In case of a declared interest, to be recused from that part of the committee
                   meetings and not to vote or in any other manner participate in any discussion
                   or hearing in relation to the said matter.


4.5.4    DISCLOSURE OF INTEREST
4.5.4.1 A member shall immediately before the opening of the BSC, BEC and BAC meeting,
         fully disclose any interest in proceedings, which he/she may become aware of and
         must for the duration of the discussion on the matter in question, leave the meeting
         or hearing.


4.5.4.2 Any interest, which may preclude a member from performing his /her functions in a
         fair, unbiased and proper manner, must be declared. Such a declaration of interest
         must be made by indication of said perceived interest on the Attendance Register
         and Declaration of Interest of these committees.


4.5.5. GIFTS, REWARDS AND FAVOURS
4.5.5.1 A member may not request, solicit or accept any reward, gift or favour in return for:
4.5.5.1.1          Voting or not voting in a particular manner;
4.5.5.1.2          Persuading the BEC or any committee in regard to the exercising of any
                   power, function or duty;
4.5.5.1.3          Making a representation to the committees, thereby disclosing privileged or
                   confidential information;
4.5.5.1.4          The acceptance of “kickbacks” or any form of gratuity for service rendered is
                   not permitted under any circumstance;
4.5.5.1.5          All cases of attempted inducement or offers of business-related perks must
                   immediately be disclosed in writing to the chairperson as well as to the
                   Accounting Officer of the relevant Department to which the members report
                   to;
4.5.5.1.6          The acceptance of any monetary gifts is prohibited under any circumstances.




                                                                                      Page 106 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids



4.5.5.1.7          Invitations to meals, sporting events, the theatre, cocktail parties or other
                   forms of modest entertainment from customers and suppliers as a courtesy
                   extended during the normal course of building relationship between customer
                   and suppliers may be accepted, provided this is not being offered to influence
                   business decisions. A member who receives such invitations should therefore
                   apply discretion when deciding whether or not the acceptance of the
                   invitation is in the interest of the Department. During the process of
                   invitation and evaluation of bids no invitation from potential or participating
                   suppliers should be accepted;
4.5.5.1.8          Invitations for inland or overseas trips where expenses are paid partially or in
                   full by the host should be declared in writing to the Accounting Officer of the
                   relevant Department;
4.5.5.1.9          A member shall also immediately before the opening of the next BEC
                   meeting, fully disclose any such invitations or gifts, which he/she may have
                   been offered, by indicating the gift or invitation on the Register for Gifts and
                   Invitations of the committees;
4.5.5.1.10         Should it transpire from such records that invitations for trips are frequently
                   being received from the same quarters, appropriate action should be
                   considered; and
4.5.5.1.11         Any money, favour, inappropriate gift, or anything else of unusual value which
                   is or may be viewed as aimed at influencing or directing any BEC activities,
                   may never be accepted by a member, be it from the public, the government, a
                   political or social movement or any stakeholder in procurement activities.


4.5.6    DISCLOSURE OF INFORMATION
4.5.6.1 A member may not, during or subsequent to his/her term of office, without the
         permission of the Accounting Officer, disclose any confidential or privileged
         information of the Committee.


4.5.6.2 During and following his/her term of employment, a member is responsible for
         ensuring that confidential or privileged information is protected from theft,
         unauthorised disclosure or inappropriate use.                        In this regard, the following is
         important:


                                                                                                Page 107 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids



4.5.6.2.1          Compliance with security procedures for computer systems;
4.5.6.2.2          Exercise caution when dealing with outsiders to prevent inadvertent
                   disclosure of confidential or privileged information when answering questions
                   or using internal information systems or supplies;
4.5.6.2.3          Being sensitive not to be overheard when discussing confidential or privileged
                   information in public places such as restaurants, on public transport,
                   elevators, etc and when using portable telecommunication devices; and
4.5.6.2.4          Refraining from discussing confidential or privileged information with family or
                   friends.


4.5.7    FRAUDULENT AND CORRUPT PRACTICES
4.5.7.1All Committee members have an obligation to refrain from any fraudulent and or
         corrupt practice and must, if they detect any such activity, report it immediately to
         the accounting officer.


4.5.7.2 A fraudulent activity is defined as:
                   “a misrepresentation of facts in order to influence a selection process or the
                   execution of a contract to the detriment of the Accounting Officer/Authority and
                   includes collusive practises among bidders/contractors/staff (prior to or after
                   submission of proposals) designed to establish prices at artificial non competitive
                   levels and to deprive the Accounting Officer/Authority of the benefits of free and
                   open competition.”
         The misuse of clause 6 (6) of the PFMA regulations as so called emergency and or
         impractically is a typical example of this.


4.5.7.3 A corrupt practice is defined as:
                   “the offering, giving, receiving or soliciting of anything of value to influence the action
                   of a public official and or the acceptance of any of such by an official in the
                   selection process or in contract execution. “




                                                                                             Page 108 of 124
4.6    Functions & Powers of the Bid Adjudication Committee
            Activity                                       Functions                                                    Power
The Bid Adjudication Committee The Bid Adjudication Committee must ensure that:                 Bid Evaluation Committee and depending on the
must         consider        the         All necessary bid documents have been submitted delegated powers may make:
recommendations/reports of the            and assess whether the process followed by the              A final adjudication
Bid Evaluation Committee                  BEC complies with the necessary SCM policies,               A recommendation to the Accounting Officer/
                                          practice notes and legislation                               Authority to make a final award; or
                                         Disqualifications are justified and that valid and          Another recommendation to the Accounting
                                          accountable      reasons   and   motivations   were          Officer/Authority on how to
                                          furnished for passing over of bids                           proceed with the relevant procurement
                                         Scoring has been fair, consistent and correctly
                                          calculated and applied
                                         Bidders declarations of interest have been taken
                                          cognizance of


Referring        Back        Of The Bid Adjudication Committee must also consider and                 Where     the   Bid    Adjudication     Committee
Recommendations              By rule on all recommendations/reports regarding the                      disagrees with the recommendation of the
Accounting Officer                 amendment, variation, extension, cancellation or transfer           relevant Bid Evaluation Committee, the Bid
                                   of contracts awarded.                                               Adjudication Committee can refer the matter
                                                                                                       back to the Evaluation Committee to re-
                                                                                                       evaluate the bid again.


                                                                                                                                             Page 109 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




                                                                                       The Accounting Officer may obtain advice as
                                                                                        deemed necessary
                                                                                       Should the Bid Adjudication Committee, after
                                                                                        the recommendation has been referred back,
                                                                                        not obtain consensus with the Bid Evaluation
                                                                                        Committee on the final award of the bid, the
                                                                                        commentary      and    reasons     of   the    Bid
                                                                                        Adjudication Committee together with           the
                                                                                        final recommendations must be submitted to
                                                                                        the chairman for final decision
                                                                                       The Accounting Officer may: -
                                                                                    o   After due consideration of the reason for the
                                                                                        deviation, ratify or reject the decision of the Bid
                                                                                        Adjudication Committee;
                                                                                    o   If the decision of the Bid Adjudication
                                                                                        Committee is rejected, refer the decision of the
                                                                                        Bid Adjudication Committee back to that
                                                                                        Committee for reconsideration;
                                                                                    o   The Accounting Officer may at any stage of
                                                                                        bidding process, refer any recommendation
                                                                                        made by the Bid Evaluation Committee or the
                                                                                        adjudication committee back to the committee
                                                                                        for reconsideration of the recommendation;


                                                                                                                            Page 110 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




                                                                                                             o   If a bid other than the one recommended by
                                                                                                                 the Bid Evaluation Committee is approved by
                                                                                                                 the    Bid    Adjudication     Committee,      the
                                                                                                                 Accounting Officer/Authority or a senior official
                                                                                                                 delegated by the Accounting Officer/Authority,
                                                                                                                 must first be notified.         The Accounting
                                                                                                                 Officer/Authority or the delegated official may
                                                                                                                 after consideration of the reasons for the
                                                                                                                 deviation, ratify or reject the decision of the Bid
                                                                                                                 Adjudication Committee;
                                                                                                             o   If the decision of the Bid Adjudication
                                                                                                                 Committee to approve a bid other than
                                                                                                                 the one recommended by the Bid
                                                                                                                 Evaluation Committee is ratified, the
                                                                                                                 Auditor General, the Provincial Treasury and
                                                                                                                 the National Treasury must be notified within
                                                                                                                 10 days of the reasons for deviating from such
                                                                                                                 recommendation.
Approval Of Specifications                   Ensure that:                                                       The Bid Adjudication Committee may also, if
And Evaluation Criteria                                 Proper and unbiased specification is compiled           and when required to do so, consider for
                                                         for the specific requirement                            approval the recommendations of the Bid
                                                        Proper Terms of Reference are drawn up for              Specification Committee
                                                         the service required clearly indicating the scope

                                                                                                                                                     Page 111 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




                                                         of the requirement, the ratio between price and
                                                         functionality, the evaluation criteria as well as
                                                         their weights and values
                                                        Strategic sourcing principles were applied and
                                                         that the market was properly researched and
                                                         analyzed
                                                        The necessary funds are available
                                                        The     General Conditions of Contract,             and
                                                         appropriate        Special   Requirements           and
                                                         Conditions of Contract are specified
                                                        The preference point system prescribed and that
                                                         appropriate goals are identified and points
                                                         allocated for these goals are consistent with the
                                                         requirements of the Preferential Procurement
                                                         Regulations; and where appropriate, ranges have
                                                         been set (indicating breakdown of the points
                                                         /percentages as provided for in the relevant
                                                         sliding scales for the selected specified goals).




                                                                                                                   Page 112 of 124
4.7       Bid Adjudication Committee Procedure
4.7.1     Bid Adjudication and Evaluation committees are to meet regularly so that matters are
          dealt with timeously and timeframes are upheld. Legal requirements and validity of
          bids must be honoured.


4.7.2     The procedure to be followed at meetings is as follows:
4.7.2.1          Welcoming by the Chairperson;
4.7.2.2          Constituting the meeting;
4.7.2.3          The Chairperson and members determine and approve the agenda, which,
                 once decided upon, may not be amended or deviated from unless allowed
                 with the consent of the committee;
4.7.2.4          Submissions are dealt with in sequence, except if otherwise approved by the
                 committee;
4.7.2.5          No new matters/submissions should be considered;
4.7.2.6          Concerning the minutes:
                        The Chairperson enquires whether the minutes may be taken as read;
                        Amendments may be proposed and approved by the committee;
                        The Chairperson calls for minutes to be approved; and
                        Matters arising from minutes are dealt with.


4.7.3     Convening Bid Adjudication Committee Meetings
4.7.3.1 If a meeting is to be properly convened by the secretary with the assistance of the
          chairperson, it will have to satisfy the following conditions:
4.7.3.1.1        The agenda and notice of a meeting shall be given at least 3 days before the
                 actual meeting to everyone entitled to be present;
4.7.3.1.2        The items and sequence of an agenda may not be changed during a meeting;
4.7.3.1.3        All reports and submissions to the committee must be in writing,
                 substantiated and channeled through the Bid Specification and /Bid Evaluation
                 committee;
4.7.3.1.4        The person convening the meeting must have the authority to do so;
4.7.3.1.5        The proper, duly appointed or elected person must be ‘in the chair’;
4.7.3.1.6        The procedure(s) to be followed during the meeting must comply with a
                 written constitution (a document containing the rules and conditions

                                                                                 Page 113 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids



                   governing and regulating an association, society, company club or formally
                   organized group);
4.7.3.1.7          The necessary quorum must be present as required by the constitution,
                   statute(s), standing orders or regulations before the meeting can officially take
                   place and decisions be made; and
4.7.3.1.8          An accurate written record or set of minutes of the decisions taken at the
                   meeting will be circulated to members and a copy filed.


4.7.4    Practical Arrangements Before Meetings
4.7.4.1 The SCM official is usually responsible for selecting and booking a suitable venue,
         deciding on a convenient date, specific time and ensuring the availability of recording
         facilities to mechanically record the meeting proceedings.                 These details will be
         included in the notice of meeting and recorded in the minutes.


4.7.5    Conducting Meetings
4.7.5.1 The chairperson conducting a meeting must deal with the items in the order set out
         in the agenda. The members of the committee must bring their copies of the Agenda
         (as well the minutes of the previous meetings) to the meeting, so that the Secretary
         does not have to read it out at the beginning of the meeting.


4.7.5.2 The Chairman will confirm:
4.7.5.2.1          Whether the Secretary has received any apologies from those unable to
                   attend the meeting; and
4.7.5.2.2          Approval of the minutes of the meeting.


4.7.5.3 Ensuring Proper Orderly Control of Meetings
4.7.5.3.1          To prevent a meeting from becoming disorderly and not achieving its
                   objective, i.e. of dealing with items on the agenda in a business like manner,
                   the Chairperson must at all times be in control of the proceedings.
4.7.5.3.2          One of the traditions in meeting procedures is for members to ‘address the
                   Chair’ when speaking or to direct their comments, questions or replies
                   ‘through the Chair to Miss/Mrs/Mr Johnson’ rather than to the individuals
                   directly.


                                                                                           Page 114 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids



4.7.5.3.3          If this important procedure is not followed, the level of discussion
                   deteriorates, tempers flare, people become subjective (emotional) and items
                   on the agenda are not dealt in an objective (factual) business or professional
                   manner.
4.7.5.3.4          The Chair must constantly ensure that all members who wish to exercise
                   their right to ‘speak to a motion’ or contribute to a debate are given equal
                   opportunity to do so, in that no one ‘takes over’ and dominates the
                   proceedings.
4.7.5.3.5          When a meeting becomes emotionally charged and disorderly, the
                   Chairperson must act decisively by calling the members ‘to order’ through the
                   Chair.
4.7.5.3.6          A member may interrupt a speaker at any point if he/she wishes to raise an
                   objection or question what is being said, by using the phrase ‘through you,
                   Chairperson, on a point of order…’.
4.7.5.3.7          If you wish to address the meeting, raise your hand slightly so that the
                   Chairperson knows that you want to speak. If others have also indicated that
                   they wish to speak, the Chairperson must indicate who must speak and in
                   which order.
4.7.5.3.8          The Chair often has to restrict discussion by asking the next member to
                   speak, stopping a person who has spoken for too long or has moved off the
                   point.     The Chair must prevent the discussion becoming protracted and
                   deviating from the topic on the Agenda.
4.7.5.3.9          If you feel that the discussion of a particular Agenda item is taking too long or
                   has moved off the point, move (propose) a motion that the debate be ended.
                   The Chairperson would ask if there is a seconder (another person who
                   supports your proposal). If your motion is seconded, a vote will be taken. If
                   your motion is carried (approved), the Chairman will then be obliged to
                   conclude the debate and move to the next item on the Agenda.
4.7.5.3.10         Any member may propose an amendment to your motion.                     Such an
                   amendment or amendments have to be proposed, seconded and carried
                   before your original motion is considered.
4.7.5.3.11         If a stalemate, deadlock or tie occurs with half of the committee voting in
                   favour and half against a particular motion, the Chairperson is constitutionally


                                                                                     Page 115 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids



                   empowered to register a casting voting in the best interests of the
                   organization.


4.7.6    Right to Vote
4.7.6.1 All full members of the committees have the right to vote. The Chairperson has a
         casting vote as well as a deliberate vote. Co-opted members have no right to vote.


4.7.7    Method of Voting
4.7.7.1 The raising of the hands will do, unless at least two-thirds of the members present
         decide on voting by secret ballot.



4.8      Documents Relating to Meetings
4.8.1    Notices
4.8.1.1 As mentioned earlier, it is the Secretary’s responsibility to notify all the members
         that a meeting will take place.


4.8.1.2 If called upon to perform this function, the following checklist may be used to draft
         the notice of the meeting:
4.8.1.2.1          Has a specific time and date of the meeting, and full details of the venue
                   (place) been included?
4.8.1.2.2          Has the constitutional requirements of the department, regarding the
                   minimum number of days’ notice necessary for the notice to be sent out ‘in
                   good time’ been complied with?
4.8.1.2.3          Have full details of all bids to be considered/adjudicated been provided?
4.8.1.2.4          Is the language of the notice clear, concise, correct and complete?
4.8.1.2.5          Are recording facilities available?


4.8.2    Agendas
4.8.2.1 An agenda is a document setting out in definite order the specific items of business to
         be discussed and decided upon at a meeting. The items on the agenda will, naturally,
         vary according to the nature and purpose of the meeting.




                                                                                    Page 116 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids



4.8.2.2 A fixed agenda prevents items being overlooked. If the procedure of the meeting is
         dealt with in order according to the set Agenda, there should be no need to ask
         “what is next on the list”. If the Agenda is circulated before the meeting as required,
         it will enable the members to think about the items which are scheduled for
         discussion and to decide what course of action they will take at the meeting.


4.8.2.3 An agenda should be clearly worded, specific, free from ambiguity, informative and
         concise.      A properly prepared and drafted agenda prevents unnecessary matters
         being put to the Chair.


4.8.2.4 A well drafted agenda shortens the meeting, helps in the formulation of reasons for
         holding the meeting and in setting the objectives and practical outcomes that might
         be attained as a result of the meeting.


4.8.3    Minutes Of Meetings
4.8.3.1 The minutes of the meeting are the official record of the most important discussion,
         tasks accomplished and decisions taken. Note that it is customary to write minutes
         of the meeting in the past tense. Minutes are not intended to be verbatim (word for
         word) record of the proceedings. Once the minutes are confirmed, they may be
         altered at a future meeting, formally.


4.8.3.2 Minutes should inter alia (among other things) contain a record of:
4.8.3.2.1          The date, time and place of the meeting;
4.8.3.2.2          The name of the Chairperson, Secretary and other office-bearers;
4.8.3.2.3          If possible, the names of all present, if this cannot be done, as many names
                   should be recorded as possible to indicate the presence of the quorum;
4.8.3.2.4          Dates or other ways of identifying correspondence of documents referred to
                   and discussed in the meeting;
4.8.3.2.5          A summary of the items dealt with and of motions and amendments
                   proposed, adopted or recorded;
4.8.3.2.5          A record of all dissenting votes requested by members; and
4.8.3.2.6          A mechanically recording for verbatim minutes if required by a court of law.




                                                                                    Page 117 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids



4.8.3.3 Each subject (corresponding with the items on the agenda for that meeting) should
          be introduced by using a title / heading that provides enough information to identify
          its origin and the most important issues involved. This may be followed by a brief
          summary of the most important points discussed, and the conclusion must contain
          the decisions reached. If a point is not finalized, the minutes should state this.


4.8.3.4 Minutes should keep an accurate record of the meeting. It could be used as a tool to
          monitor progress on action required by the meeting, as a reminder of process and
          decisions, as a record for those unable to be present, and as an historical and legal
          record.


4.8.4     Register
4.8.4.1 All members will sign a register at each meeting serving as attendance register, as
          well as the prescribed undertaking to confidentiality of that meeting.




4.9       INTERIM BID ADVISORY COMMITTEE (IBAC)
4.9.1     The Interim Bid Advisory Committee (IBAC) in the Provincial Treasury shall:
4.9.1.1             Review bids that exceed a Department’s delegated financial threshold value,
                    once that department’s BAC has made a decision;
4.9.1.2             Then assess whether proper evaluation and adjudication processes and
                    procedures were followed. The IBAC will make a final recommendation to
                    the Accounting Officer of that particular Department. It is important to note
                    that the accountability still remains with the latter Accounting Officer to take
                    the final decision;
4.9.1.3             Review bids where the requirement is technically complex, there are risks
                    involved, or any other bid referred by the Accounting Officer; and
4.9.1.4             Assess transversal period contracts.


4.9.2     Departments shall participate in the award of the transversal period contracts
          through the facilitation of the IBAC and the Provincial SCM Office.




                                                                                     Page 118 of 124
    Check /       Higher level       Responsibility                          Checks and Controls for adjudicating bids
Control Point        Context
Adjudicate and   Acquisition        Bid Adjudication      Check that a Bid Adjudication Committee is established in accordance with the
Award Bid        (Competitive       Committee              relevant Practice Note and is distinctly separate in composition and function from the
                 Bidding Process)                          other Bid Committees.
                                                          A bidder must be registered on the provincial supplier database prior to the closing of
                                                           bids for the goods or services.
                                                          The Bid Adjudication Committee will be responsible for final adjudication of the bid,
                                                           taking into account recommendations made by the Bid Evaluation Committee.
                                                          Minutes should be kept for all Committee Meetings. These should be filed
                                                           appropriately.
                                                          Check that suppliers/service providers chosen are not blacklisted. Refer to the
                                                           relevant Practice Note.
                                                          Verify true ownership of businesses (to avoid fronting).
                                                          Suppliers should be assessed by the Bid Adjudication Committee for possible risks
                                                           such as the availability of adequate facilities, financial standing, capacity and capability
                                                           to deliver, previous performance in terms of quality and service delivery, as well as
                                                           attainment of goals. Check whether issues raised in previous contracts have been
                                                           addressed.
                                                          Before a contract over R10 million is awarded, clearance should be obtained from the
                                                           DTI regarding the National Industrial Participation Programme.
                                                          Prior to the award of any contract, accounting officers/authorities should ensure that

                                                                                                                                            Page 119 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




                                                                              neither the recommended bidder nor any of the directors are listed as
                                                                              companies/directors/persons restricted to do business with the public sector. This list
                                                                              of restricted suppliers is managed and maintained on the provincial supplier database
                                                                              and National Treasury database.
                                                                             A letter of award should be forwarded to the successful bidder. This letter must be
                                                                              signed by the HOD or his/her delegate to approve the bid award.
                                                                             Unsuccessful bidders should be notified in writing and debriefed. A record of these
                                                                              bidders should be filed.
                                                                             The result of the adjudication should be advertised in the Provincial Tender Bulletin.
Negotiation            Contract                 Cost Centre                  Check that once the contract has been awarded by the Bid Adjudication Committee,
                       Administration           Manager                       that the relevant cost centre has contacted the supplier and entered into negotiations
                                                                              with them in order to finalise both the scope of the contract and the conditions
                                                                              attached to it.
                                                                             Check that the negotiations cover the following aspects, where applicable: Terms of
                                                                              Reference (TOR), the methodology, staffing, pricing, Accounting Officer’s/Authority’s
                                                                              inputs, and special conditions of the contract.
                                                                             Check that these discussions do not substantially alter the original TOR or the terms
                                                                              of the contract, lest the quality of the final product, its cost, and the relevance of the
                                                                              initial evaluation be affected.
                                                                             Minutes of these meetings should be taken.
                                                                             Check that mutual agreement/consensus between the user and supplier is achieved
                                                                              through the negotiation process – this agreement will serve the basis for the
                                                                              conditions that must be adhered to by both parties.

                                                                                                                                                             Page 120 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




Contract               Contract                 Cost Centre                  The contract should be written in at least English and proper contract documents
formalization          Administration           Manager                       should be used.
                                                Supplier                     Contracts should be signed, after mutual consensus, by all parties to the contract.
                                                                             A Service Level Agreement should be formalised and signed in situations where
                                                                              services are to be performed.
                                                                             Original/legal copies of contracts should be kept in a secure place for judicial
                                                                              reference.
                                                                             The end user / cost centre should notify the contract management section of the
                                                                              award of contract. This will enable them to update the contract register.
Manage Contract        Contract                 Cost Centre                  Check that contracts are administered in terms of the specifications and conditions
                       Administration           Manager                       contained in the contract, as well as legal aspects.
                                                Contract                     The contract must be implemented according to proposed strategy (with reference to
                                                Administration                Budget, Strategic and Procurement Plan).
                                                section                      The contract register for the department should be checked on a regular basis to
                                                Stores section in             ensure that the contract register is up to date and accurate.
                                                conjunction with             Monitor the outcomes of contract with reference to the expectations documented.
                                                the end user                  Ensure that the benefit realised by department, compared with initial plan for realising
                                                                              benefits and quality service, is in line with the expected outcomes as documented
                                                                              within the contract itself.
                                                                             Monitor lifespan of project in line with the available budget approved.
                                                                             Ensure that delivery is on the basis of signed contracts.
                                                                             Ensure that monthly reports per contract of required information is provided to
                                                                              Provincial Treasury (incl. BEE).

                                                                                                                                                           Page 121 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




                                                                             Orders are to be monitored continuously to ensure proper supply and delivery in
                                                                              accordance with the conditions of contract.
                                                                             Check that all parties to the contract observe acceptable ethical standards.
                                                                             The institution must report on the contract in line with the performance
                                                                              measurement standards and minimum reporting standards as indicated by the
                                                                              Provincial Treasury.
                                                                             Necessary approval, from the Accounting Officer and Bid Adjudication Committee,
                                                                              for non-contractual price adjustments must be obtained.
                                                                             Contractual price adjustments may be considered provided that these are in line with
                                                                              the contract conditions and the supplier provides documentary proof or an audited
                                                                              certificate of price adjustments claimed to warrant such an adjustment.
                                                                             Where relevant, the supplier / successful bidder must, within 30 days of receipt of
                                                                             notification of contract, supply the purchaser security of the amount specified in the
                                                                             Special Conditions of Contract (SCC). With reference to the General Conditions of
                                                                             Contract (GCC) and SCC, suppliers must provide warranty of supply and insurance in
                                                                             terms of goods supplied.
                                                                             If there is a bid condition allowing for inspections, tests and analyses, the bidder or
                                                                              contractor should be open, at all reasonable hours, for inspection by the institution.
                                                                              Further, the inspection, testing and analyses of any contract for supplies is
                                                                              recommended and may be rejected for non-compliance.
                                                                             Check that payment to suppliers is made, in accordance with contract conditions,
                                                                              only after delivery of the goods or services with receipt of an invoice in accordance
                                                                              with Treasury Regulations.

                                                                                                                                                             Page 122 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




                                                                             Goods and services should be provided by supplier in accordance with the time
                                                                              schedule and quality specifications stipulated in the contract. A delay should be
                                                                              motivated by the supplier in writing and may result in the imposition of penalties by
                                                                              the institution. The implementation of penalties for non-delivery must be adhered to.
                                                                             Once a contract has been concluded, check that the close-out report, compiled by
                                                                              the supplier / contractor has been approved by the end user. Check that the contract
                                                                              has been cancelled with the approval of the Bid Adjudication Committee and
                                                                              Accounting Officer, after obtaining legal opinion.
                                                                             Check that the supplier does not assign or subcontract a portion or the whole
                                                                              contract to another party without the approval of the department.
                                                                             Validate reasons for termination. The Accounting Officer and Bid Adjudication
                                                                              Committee may terminate the contract on the basis of default in terms of non-
                                                                              timeous delivery, failure by the supplier to perform obligations and the engagement by
                                                                              the supplier in corrupt or fraudulent practices with respect to the contract. The
                                                                              exception to this is if a force majeure situation arises which is beyond the supplier’s
                                                                              control. The institution may terminate the contract on the basis of supplier
                                                                              insolvency.
                                                                             Any breach of contract must be clearly documented and relevant remedial actions
                                                                              approved by the Accounting Officer.
                                                                             Any disputes that arise should be resolved in the following order of escalation: 1)
                                                                              Mutual consultation by both parties, 2) After 30 days, via mediation, and 3) by South
                                                                              African court of law.
Contract               Contract                 Contract                     The contract register should be referenced on a regular basis to ascertain which

                                                                                                                                                          Page 123 of 124
Procedure Manual: Compilation, Evaluation and Adjudication of Quotations and Bids




Renewal                Administration           management                    contracts are approaching expiry date and may require renewal.
                                                section (SCM                 Review the contracts that have expired and are nearing expiry to assess whether
                                                Unit) End user /              there is still a need for the goods or services that was catered for on contract.
                                                cost centre                  Input from the end users / cost centres and reference to the Procurement Plan(s) will
                                                                              be required.
                                                                             If there is no longer a need for particular goods or services, an expired contract
                                                                              should not be renewed. The cancellation / non-renewal of contracts should be
                                                                              recorded in the contract register and communicated both to Logistics and the end
                                                                              user / cost centres.
                                                                             For each contract that requires renewal, the contract management section should
                                                                              review supplier performance with the end user / cost centres to determine supplier
                                                                              performance. A contract should not be renewed with a supplier that has been
                                                                              blacklisted or has defaulted in terms of services provided. Refer to the relevant
                                                                              Practice Note.
                                                                             Reference should also be made to the Preferential Procurement Objectives since the
                                                                              current supplier may not be aligned with the required socio-economic targets of the
                                                                              department and, as such, the contract should not be renewed.
                                                                             Suppliers should be notified in writing if their contracts are not going to be renewed.




                                                                                                                                                            Page 124 of 124

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:70
posted:6/11/2012
language:Latin
pages:124