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									               Group
     Supply Chain Management
                  &
      Preferential Procurement
               Policy




         …………………………………………………………………………………




                            JULY 2007 REVISION ZERO



                Procurement to enhance “Broadcasting for Total Citizen Empowerment”

SABC SCM &PP – 0001                                                              Page 1 of 46
TABLE OF CONTENTS
SECTION DESCRIPTION                                                                             PAGE
NO                                                                                              NO

1            POLICY STATEMENT                                                                   6

1.1          Policy Overview                                                                    6
1.2          Application of the Procurement Policy                                              6
1.3          Commencement and Review                                                            7
1.4          Distribution of the policy document                                                7
1.5          Document change log                                                                7

2            TERMINOLOGY                                                                        8

2.1          Abbreviations                                                                      8
2.2          Definitions                                                                        9

3            LEGISLATIVE AND GOVERNANCE FRAMEWORK                                               11

3.1          General                                                                            11
3.2          The Constitution                                                                   11
3.3          The Broadcasting Act No 4 of 1999                                                  12
3.4          The Public Finance Management Act (PFMA)                                           12
3.5          Treasury Regulations issued in terms of the PFMA                                   12
3.6          The Preferential Procurement Policy Framework Act (PPPFA) and its                  12
             regulations
3.7          Broad Based Black Economic Empowerment Act                                         12
3.8          The National Small Enterprise Act                                                  13
3.9          Information, Communication & Technology (ICT) Charter                              13
3.10         The Prevention and Combating of Corrupt Activities Act                             13
3.11         Other relevant pieces of legislation                                               13
3.12         Other governance guidelines                                                        13

4            SCOPE AND OBJECTIVES                                                               13

4.1          Scope                                                                              14
4.2          Overall objective and purpose                                                      14
4.3          Strategic objective                                                                14
4.4          Procurement principles                                                             13
4.5          Exclusions                                                                         16

5            AUTHORITY TO EXECUTE                                                               16

5.1          Delegation of authority framework                                                  16
5.2          Determination of thresholds                                                        16
5.3          Responsibilities of procurement practitioners                                      17
5.4          Participation of external advisors                                                 17

6            ROLES  AND            RESPONSIBILITIES             OF     GOVERNANCE 17
             STRUCTURES

6.1          Procurement focus                                                                  17
6.2          Board of Directors                                                                 17
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SABC SCM &PP – 0001                                                              Page 2 of 46
SECTION DESCRIPTION                                                                             PAGE
NO                                                                                              NO

6.3          Procurement Subcommittee                                                           17
6.4          Group Executive Committee                                                          17
6.5          The Group Chief Executive                                                          18
6.7          The Cluster                                                                        19
6.8          Bid Adjudication Committee                                                         19
6.9          The Regional Bid Adjudication Committee                                            20
6.10         Head of Procurement                                                                20
6.11         Supply Chain Management                                                            20
6.12         Business Units                                                                     20
6.13         Award Committees                                                                   21

7            ESTABLISHMENT                                                                      21

7.1          The SCM Unit                                                                       21
7.2          Training of procurement practitioners                                              21

8            BUSINESS CONDUCT AND ETHICS                                                        22

8.1          Guideline Principles                                                               22
8.2          Declaration of interest                                                            22

9            PREFERENTIAL PROCUREMENT ABUSE AND FRONTING                                        23

9.1          General                                                                            23

10           RISK MANAGEMENT                                                                    23

10.1         Responsibility for risk management                                                 23

11           MANAGEMENT OF SUPPLIERS                                                            24

11.1         Supplier selection                                                                 24
11.2         Database of prospective suppliers                                                  24
11.3         Supplier Relationship Management                                                   24
11.4         Supplier Performance Evaluation                                                    25
11.5         Supplier restriction                                                               25
11.6         The Bid communication process                                                      25
11.7         Supplier samples and facilities                                                    25
11.8         Supplier capacity management                                                       26
11.9         Purchases from SABC employees and Former employees                                 26

12           PREFERENTIAL PROCUREMENT                                                           26

12.1         General                                                                            26
12.2         Set-aside mechanism                                                                26
12.3         Access to requirements                                                             27
12.4         Transparency and access to information                                             27
12.5         Preferential scoring                                                               27
12.6         Payment terms                                                                      27
12.7         Supplier database development                                                      27
12.8         Enterprise development                                                             28

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SABC SCM &PP – 0001                                                              Page 3 of 46
SECTION DESCRIPTION                                                                             PAGE
NO                                                                                              NO

12.9         Monitoring and performance measurement                                             28

13           DEMAND MANAGEMENT                                                                  28

13.1         System of demand management                                                        28
13.2         Planning process                                                                   28
13.3         Assessments and analyses                                                           28
13.4         Procurement plan                                                                   29

14           SYSTEM OF PROCUREMENT MANAGEMENT                                                   29

14.1         Hierarchy for satisfying requirements                                              29
14.2         Pre-established sources                                                            29
14.3         Procurement of goods, services and works                                           29
14.4         Procurement from abroad                                                            39
14.5         Procurement from grants from donors                                                30
14.6         Request for information (RFI)                                                      30
14.7         Request for quotations (RFQ)                                                       30
14.8         Request for proposals (RFP)                                                        30
14.9         Negotiations                                                                       30
14.10        Public private partnerships                                                        30
14.11        Building, engineering or construction works                                        31
14.12        Appointment of consultants and professional services                               31
14.13        Unsolicited bids                                                                   31
14.14        Petty cash                                                                         31
14.15        Procurement process up to R100 000 (VAT included)                                  32
14.16        Procurement process from above R100 000 and up to R2 million (VAT                  32
             included)
14.17        Range of procurement processes above R2 million                                    32
14.18        Deviation from the bidding process                                                 32
14.19        Procurement of content                                                             33

15           QUOTATION/BID COMPILATION                                                          34

15.1         Language of quotation/bid documents                                                34
15.2         Calling for bids/quotations                                                        34
15.3         Determining the closing period                                                     34
15.4         Determining the validity period                                                    34
15.5         Elements for inclusion in bid documents                                            34
15.6         Specifications /terms of reference                                                 34
15.7         Planning for pre-bid briefing sessions                                             35

16           ISSUING OF QUOTATIONS/BIDS                                                         35

16.1         Advertising of bids                                                                35
16.2         Closing time of bids/quotations                                                    35
16.3         Availability of bid documents                                                      35
16.4         Sale of bid documents                                                              35
16.5         Responses received                                                                 35
16.6         Pre-bid briefing sessions                                                          35
16.7         Changing of information before closing time                                        35

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SABC SCM &PP – 0001                                                              Page 4 of 46
SECTION DESCRIPTION                                                                             PAGE
NO                                                                                              NO

16.8         Postponement of closing date                                                       36

17           RECEIVING AND OPENING OF RESPONSES                                                 36

17.1         General guidelines                                                                 36
17.2         Confidentiality                                                                    36
17.3         Bids received late                                                                 36

18           EVALUATION PROCESS                                                                 37

18.1         General                                                                            37
18.2         Reasons for rejection                                                              37
18.3         Compliance check procedures                                                        37
18.4         Consideration of additional information                                            38
18.5         The evaluators                                                                     38
18.6         Determination of compliance where no functionality is involved                     38
18.7         Determination of percentage for functionality (Technical)                          38
18.8         Elimination of proposals on grounds of functionality                               39
18.9         Determination of percentage for price                                              39
18.10        Calculation of combined score for functionality and price                          40
18.11        Calculation of points for B-BBEE preference and the final score                    40
18.12        Equal offers                                                                       41
18.13        New and unproven products                                                          41
18.14        Deviations from specifications                                                     41
18.15        Alternative offers and improvement on specification                                41
18.16        Subcontracting and joint ventures                                                  41
18.17        Clearance of bidders/persons prior to the award of a contract                      42
18.18        Negotiations                                                                       42

19           AWARD AND CONTRACTUAL COMMITMENTS                                                  42

19.1         General                                                                            42
19.2         Cancellation of quotations/bids                                                    42
19.3         Conclusion of contract                                                             43


20           ACCESS TO BIDDING INFORMATION                                                      43
20.1         General                                                                            43

21           MANAGEMENT OF CONTRACTS CONCLUDED                                                  44
21.1         General                                                                            44

22           PAYMENT                                                                            44
22.1         General                                                                            44

23           RECORDING AND REPORTING OF INFORMATION                                             45
23.1         General                                                                            45

24           PERFORMANCE MEASUREMENT OF PROCUREMENT                                             45
24.1         General                                                                            45

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SABC SCM &PP – 0001                                                              Page 5 of 46
SECTION DESCRIPTION                                                                             PAGE
NO                                                                                              NO

25           APPLICABLE DOCUMENTS                                                               46

24.1         Procurement Procedure Manual                                                       46
24.2         SABC procurement strategy                                                          46
24.3         Delegation of authority framework                                                  46
24.4         Disciplinary codes                                                                 46



1.        POLICY STATEMENT

1.1       POLICY OVERVIEW

1.1.1     The SABC is a key player in the broadcasting sector and therefore has a
          significant role to play in terms of stimulating growth in the sector. In addition,
          as a public broadcaster, the SABC has certain obligations towards its
          shareholder.

1.1.2     The SABC has developed this Group Supply Chain Management &
          Preferential Procurement Policy (hereinafter referred to as the „Procurement
          Policy‟) for the acquisition of all goods, services, works and content for
          television and radio that addresses its mandate as set out in the ICASA
          regulations, the Information, Communication and Technology, the SABC‟s
          business strategy and the Government‟s economic transformation agenda.

1.1.3     The goal of this Policy is to ensure sound, sustainable and accountable
          procurement within the SABC, whilst promoting broad–based black economic
          empowerment as a priority in terms of the goals and objectives of the SABC,
          which include general principles for achieving the following socio-
          economic objectives:

1.1.3.1   To stimulate and promote local economic development in a targeted and focus
          manner.
1.1.3.2   To facilitate the creation of employment and business opportunities in the
          Regions.
1.1.3.3   To promote the competitiveness of local enterprises.
1.1.3.4   To increase participation by EME‟s and QSE‟s.
1.1.3.5   To promote joint venture partnerships.

1.1.4     This Policy will also strive to ensure that the objectives for uniformity in supply
          chain management systems between organs of states in all spheres, are not
          undermined and that consistency with national economic policy on the
          promotion of investments and doing business with public sector are
          maintained.


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SABC SCM &PP – 0001                                                              Page 6 of 46
1.2       APPLICATION OF THE PROCUREMENT POLICY

1.2.1     This document sets forth the Procurement Policy of the SABC and all its
          business units (herein after referred to as the „SABC‟).

1.2.2     The Procurement Policy is intended to cover all SABC subsidiaries, affiliates or
          joint ventures where SABC owns more than 50% of the equity.

1.2.3     This Procurement Policy has been mandated by Group Chief Executive Officer
          as the Accounting Officer to cover the procurement activities related to all
          SABC‟s third party expenditure and has been duly approved by the SABC
          Board.

1.2.4     All SABC employees who have assigned procurement responsibilities have a
          duty to familiarise themselves with and carry out their duties in line with this
          Procurement Policy.

1.2.5     The Procurement Policy sets forth the guiding principles which will govern
          acquisition of all goods and services from third party suppliers on behalf of
          SABC.

1.2.6     The Procurement Policy will be supported by the Procurement Procedures
          Manual which sets forth the detailed procedures and working instructions that
          SABC employees must follow for the acquisition of goods and services and
          content.

1.3       COMMENCEMENT AND REVIEW

1.3.1     The Procurement Policy is effective from 1st October 2007.

1.3.2     The Head of Procurement shall be the custodian for this Policy.

1.3.3     This document will be reviewed at least once annually and if required, at
          shorter intervals.

1.3.4     Any changes to the Procurement Policy can only be granted by the Head of
          Procurement, following consultation with, and approval by, the Group Chief
          Executive Officer, who will report to the Procurement Subcommittee at
          regular intervals.

1.3.5     Any changes to the Procurement Policy without the approval of the
          Board of Directors shall be invalid.

1.4       DISTRIBUTION OF THE POLICY DOCUMENT

1.4.1     All SABC employees must be informed of the Procurement Policy and must
          have access to the Procurement Policy and its amendments.

1.4.2     All SABC employees must be informed of changes to the Procurement Policy.


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SABC SCM &PP – 0001                                                              Page 7 of 46
1.5       DOCUMENT CHANGE LOG

1.5.1     When the document is reviewed and no changes are necessary, the version
          number will not be changed.

1.5.2     If there is a change needed to the Policy, the version number will be amended
          and the Policy reissued to the designated distribution list.




         No        Version           Effective            Author               Change Description
                                     Date
         1
         2
         3



2         TERMINOLOGY
2.1       ABBREVIATIONS

             AO                          Accounting Officer
             B-BBEE                      Broad-Based Black Economic Empowerment
             BAC                         Bid Adjudication Committee
             BEC                         Bid Evaluation Committee
             BEE                         Black Economic Empowerment
             BSC                         Bid Specification Committee
             CIDB                        Construction Industry Development Board
             DTI                         Department of Trade and Industry
             HOP                         Head of Procurement
             EME                         Exempted Micro Enterprises
             GCEO                        Group Chief Executive Officer
             ICT                         Information, Communication & Technology Charter
             LCC                         Life cycle costing
             NIPP                        National Industrial Participation Programme
             PFMA                        Public Finance Management Act (Act 1 of 1999, as
                                         amended)
             PPP                         Public Private Partnership
             PPPFA                       Preferential Procurement Policy Framework Act (Act 5 of

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SABC SCM &PP – 0001                                                                 Page 8 of 46
                                       2000)
           QSE                         Qualifying Small Enterprises
           RBAC                        Regional Bid Adjudication Committee
           RFI                         Request for Information
           RFP                         Request for proposal
           RFQ                         Request for quotation
           SABC                        South African Broadcasting Corporation Limited
           SAPS                        South African Police Services
           SARS                        South African Revenue Services
           SCM                         Supply Chain Management
           SLA                         Service Level Agreement
           SMME                        Small, Medium and Micro Enterprise
           TCO                         Total Cost of Ownership
           TOR                         Terms of Reference

2.2       DEFINITIONS

           Defined Term                  Definition
           ACCOUNTING                    Body or person mentioned in section 36 of the PFMA.
           OFFICER
           ACCOUNTING                    Means the authority which is accountable in terms of
           AUTHORITY                     section 49 of the PFMA in particular, read with section
                                         49(2) (a) of the PFMA.
           ASSET                         It is movable and immovable resources controlled by an
                                         entity as a result of past events and from which future
                                         economic benefits or service potential are expected to
                                         flow to the entity.
           AUTHORITY                     Means the right or power attached to a rank or
                                         appointment permitting the holder thereof to make
                                         decisions, to take command or to demand action by
                                         others.
           BOTTLENECK                    Suppliers that provide high critical categories where
           SUPPLIERS                     SABC‟s buying power is weak. These suppliers have
                                         high potential to become the strategic suppliers.
           COLLABORATIVE                 An exchange of commercial or other privileges.
           BUSINESS
           RELATIONSHIPS
           CONSORTIUM OR                 Consortium or joint venture means an
           JOINT VENTURE                 association/collaboration of persons/enterprises to form a
                                         different legal entity for the purpose of combining their
                                         expertise, property, capital, efforts, skills and knowledge
                                         in an activity for the execution of a contract.
           CONSULTANT                    A person or entity providing services requiring

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SABC SCM &PP – 0001                                                               Page 9 of 46
                                         knowledge-based expertise.
           DEMAND                        Demand management is the planning process that
           MANAGEMENT                    ensures that the resources required to support the
                                         strategic objectives are delivered at the correct time, at
                                         the right price, location, quantity and quality that will
                                         satisfy the needs.
           END USER                      The end user is the person requiring the product.
           EXEMPT MICRO                  Defined by the Codes of Good Practice, as companies
           ENTERPRISE                    with an annual total turnover of R5 million or less.
           FRONTING                      Any entity mechanism, structure or action under false
                                         pretences in order to circumvent the B-BBEE
                                         requirements as required under various policy
                                         instruments and this policy.
           HIS                           Refers to and includes both genders.
           LEVERAGE                      Suppliers that deliver the low critical categories while
           SUPPLIERS                     SABC‟s buying power is strong. SABC should leverage
                                         its spending on these suppliers.
           LIFECYCLE COSTING             Lifecycle costing is a technique developed to identify and
                                         quantify all costs, initial and ongoing, associated with a
                                         project or installation over a given period. Thus, it is a
                                         tool that forecasts the total cost of a purchase throughout
                                         its predetermined lifecycle.
           LOGISTICS                     Logistics management ensures that goods and services
           MANAGEMENT                    are available at the right place, time and quantities
                                         required to execute the functions of the SABC.
           PFMA                          PFMA means the Public Finance Management Act, 1999
                                         (Act No 1 of 1999) as amended, as well as the relevant
                                         applicable National Treasury Regulations.
           PROCUREMENT                   Procurement management is the process of procurement
           MANAGEMENT                    of goods, works and services.
           PROCUREMENT                   A person who practices procurement as a profession or
           PRACTITIONER                  any other official practicing or involved with procurement.
           PUBLIC PRIVATE                A Public Private Partnership (PPP) means a commercial
           PARTNERSHIP                   transaction between an institution (public entity) and a
                                         private party as defined in Treasury Regulation 16.
           PURCHASE ORDER                The contractual document between SABC and the
                                         Suppliers that commits SABC to acquiring specified
                                         Goods and Services based on a set of Terms and
                                         Conditions for a monetary consideration once the
                                         Supplier has satisfactorily discharge contractual
                                         requirements.
           RESPONSIBILITY                The obligation imposed on an individual to properly
                                         exercise the authority vested in him.
           RISK APPETITE                 Risk appetite refers to the SABC‟s decision about those
                                         risks that it will take and those it will not take in the
                                         pursuit of its goals and objectives.
           RISK MANAGEMENT               Risk management may be defined as the identification,
                                         measurement and economic control of risks that threaten

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SABC SCM &PP – 0001                                                               Page 10 of 46
                                        the assets and earnings of a business or other
                                        enterprise.
           ROUTINE SUPPLIERS            Suppliers that provide low criticality categories, and
                                        SABC‟s buying power is also weak. SABC should focus
                                        on reducing price as well as transactional cost.
           QUALIFYING SMALL             Defined by the Codes as companies with annual total
           ENTERPRISES                  turnover of between R5 million and R35 million.
           SMALL MEDIUM AND             SMME is as defined in the National Small Enterprise Act,
           MICRO ENTERPRISE             102 of 1996, as amended.
           (SMME)
           STRATEGIC GOALS              Strategic goals are areas of institutional performance
                                        /outcomes that are critical to the achievement of the
                                        mission and describe the strategic direction of the SABC.
           STRATEGIC                    Strategic objectives are more concrete and specific than
           OBJECTIVES                   strategic goals and describe high-level outputs or
                                        “results” of actions that the institution intends taking..
           STRATEGIC                    A methodology for maximising SABC‟s leverage with its
           SOURCING                     supply base to obtain best value for money.
           STRATEGIC                    Suppliers that deliver the critical categories of goods or
           SUPPLIERS                    services. SABC‟s buying power on these categories is
                                        high as well.
           SUPPLIER                     A supplier is the private juristic person or legal entity that
                                        provides goods, services or works to the SABC.
           SUPPLY CHAIN                 This function is the collaborative strategy that integrates :
           MANAGEMENT                   Demand management.
                                        Acquisition management (including document
                                        management).
                                        Logistics management.
                                        Disposal management.
                                        Risk management.
                                        Performance management.
           VALUE FOR MONEY              Best value for money means the best available outcome
                                        when all relevant costs and benefits over the
                                        procurement cycle are considered.



3         LEGISLATIVE AND GOVERNANCE FRAMEWORK
3.1       GENERAL

3.1.1     The overall governance of the South African Broadcasting Corporation Ltd
          (“SABC” or the “Corporation”) as the national public broadcaster and a public
          entity wholly owned by Government is broadly determined, and the SABC is
          committed to applying the under-mentioned legislative and regulatory
          environment as it pertains to supply chain management and preferential
          procurement.


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SABC SCM &PP – 0001                                                              Page 11 of 46
3.2       THE CONSTITUTION

3.2.1     The SABC shall apply section 217 of the Constitution of the Republic of South
          Africa, (Act No 108 of 1996, as amended) by contracting for goods and
          services in accordance with a system which is fair, equitable, transparent,
          competitive and cost-effective.

3.2.2     The SABC shall also provide for a preferential procurement system in line with
          the Constitution.

3.3       THE BROADCASTING ACT NO. 4 OF 1999

3.3.1     The SABC shall apply the Broadcasting Act to encourage ownership and
          control of broadcasting services through participation in procurement by
          persons from historically disadvantaged groups.

3.4       THE PUBLIC FINANCE MANAGEMENT ACT (PFMA)

3.4.1     The SABC shall apply the Public Finance Management Act, Act 1 of 1999 as
          amended by Act 29 of 1999 as it pertains to SCM and as applicable to a
          Schedule 2 public entity.

3.5       TREASURY REGULATIONS ISSUED IN TERMS OF THE PFMA

3.5.1     The SABC shall apply the Treasury Regulations to the extent required by a
          public entity listed in Schedule 2 of the PFMA.

3.5.2     In terms of Chapter 16A of the Treasury Regulations pertaining to SCM, only
          the principles contained therein will be applied and not the letter of the
          regulations.

3.6       THE PREFERENTIAL PROCUREMENT POLICY FRAMEWORK ACT
          (PPPFA) AND ITS REGULATIONS

3.6.1     The SABC shall apply the spirit of the Preferential Procurement Policy
          Framework Act, (Act No 5 of 2000) and its regulations.

3.7       BROAD-BASED BLACK ECONOMIC EMPOWERMENT ACT

3.7.1     The SABC shall adhere to the directives contained in the B-BBEE Act, Act No
          53 of 2003, as it affects the supply chain process. In keeping with the SABC‟s
          vision of „Broadcasting for Total Citizen Empowerment”, the Procurement
          Policy will enshrine the SABC‟s solid commitment towards ensuring that the
          SABC adopts the principles of B-BBEE as standard business practice.

3.7.2     The SABC shall also adhere to the directives as contained in the Broad-Based
          Black Economic Empowerment Strategy as well as the approved Codes of
          Good Practice issued in terms of the B-BBEE Act.



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SABC SCM &PP – 0001                                                              Page 12 of 46
3.7.3     The B-BBEE Strategy of the SABC will be implemented in line with the spirit of
          the PPPFA and its regulations and B-BBEE.

3.8       THE NATIONAL SMALL ENTERPRISE ACT

3.8.1     The SABC shall follow the guidelines in The National Small Enterprise Act, Act
          No 102 of 1996, as amended, in promoting small enterprises in the Republic.

3.9       INFORMATION,            COMMUNICATION                 &     TECHNOLOGY                 (ICT)
          CHARTER

3.9.1     The combination of manufacturing and services industries that capture,
          transmit and display data and information electronically. (OECD 2002:18)

3.10      THE PREVENTION AND COMBATING OF CORRUPT ACTIVITIES
          ACT

3.10.1    The SABC shall adhere to the directives in the Prevention and Combating of
          Corrupt Activities Act, Act 12 of 2004 as it affects the supply chain process.

3.11      OTHER RELEVANT PIECES OF LEGISLATION

3.11.1    Cognisance shall be taken of the following pieces of legislation that will have
          an impact on the supply chain environment:

3.11.1.1 Promotion of Access to Information Act (PROATIA), Act 2 of 2000.

3.11.1.2 Promotion of Administrative Justice Act (PAJA), Act No 3 of 2000.

3.11.1.3 The Competition Act, Act No 89 of 1998.

3.11.1.4 The Protected Disclosures Act, Act No 26 of 2000.

3.11.1.5 The National Archives of South Africa Act

3.11.1.6 Occupational Health and Safety Act

3.11.1.7 Hazardous Substances Act

3.11.1.8 Value Added Tax Act

3.11.1.9 All other common law provisions relating to supply chain management.


3.12      OTHER GOVERNANCE GUIDELINES

3.12.1    Cognisance shall be taken of The King Report II on Corporate Governance for
          South Africa 2002, as amended, as it impacts on the procurement
          environment.


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SABC SCM &PP – 0001                                                              Page 13 of 46
4         SCOPE AND OBJECTIVES

4.1       SCOPE

4.1.1     This Procurement Policy is applicable to all SABC divisions, business units,
          subsidiaries and all the SABC Regions.

4.1.2     It covers all acquisition of goods, services (tangible and intangible), content
          and works covering capital and operational expenditure, fixed assets and the
          appointment of consultants as well as selling of programmes.
4.1.3     Covers all procurement and other SCM by and on behalf of the SABC, unless
          covered by the exclusions mentioned hereunder.

4.2       OVERALL OBJECTIVE AND PURPOSE

4.2.1     To ensure the efficient, effective and uniform panning for and procurement of
          all services and goods as well as the sale and letting of assets whilst
          developing, supporting and promoting broad-based black economic
          empowerment, SMME‟s and other preferential goals.

4.2.2     To ensure the efficient, effective and uniform management and disposal of
          goods and assets.

4.2.3     The SABC shall ensure good governance through rigorous supply chain
          processes and to promote the consistent application of procurement best
          practices.

4.2.4     To create a common understanding and interpretation of preferential
          procurement.

4.2.5     To ensure that the SABC‟s strategic objectives are achieved.

4.3       STRATEGIC OBJECTIVE

4.3.1     The SABC shall promote and support the chosen supply chain strategic
          objectives.

4.3.2     The SABC will procure from businesses with a Level 1 to 6 BBBEE rating till
          31 March 2008 where after it will only procure from businesses with a Level 1
          to 5 B-BBEE rating.

4.3.3     A minimum of 60% of B-BBEE Procurement Spend from all suppliers based on
          the B-BBEE Procurement Recognition Levels (1 - 6) as a percentage of Total
          Measured Procurement Spend until 31 March 2008.

4.3.4     The implementation of the policy shall be effected through guidelines,
          strategies, directives, processes and procedures.
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SABC SCM &PP – 0001                                                              Page 14 of 46
4.4       PROCUREMENT PRINCIPLES

4.4.1     The SABC subscribes to the procurement principles as noted hereunder:

           Transparency                     The procurement process shall be open and
                                            predictable and shall afford each prospective
                                            bidder timely access to the same and accurate
                                            information..

           Equal treatment                  All bidders and suppliers shall be treated equally
                                            throughout the whole procurement process
                                            whilst    promoting     certain     empowerment
                                            objectives.

           Effectiveness                    The SABC shall strive for procurement system
                                            effectiveness and shall carry out its procurement
                                            processes as cost-effectively as possible while
                                            meeting its commercial, regulatory and socio-
                                            economic goals.

           Efficiency                       The SABC shall strive to standardise and
                                            simplify procedures where appropriate to
                                            enhance SCM system effectiveness.

           Competitiveness                  The SABC shall satisfy its requirements through
                                            competition unless there are justifiable reasons
                                            to the contrary.

           Fairness                         All bidders and contractors shall be dealt with
                                            fairly and without unfair discrimination, with no
                                            unnecessary      constraints     imposed      and
                                            commercial confidentiality protected.

           Ethics                           All suppliers shall be treated equally whilst
                                            promoting certain empowerment objectives, all
                                            SABC employees and suppliers shall subscribe
                                            to the highest ethical standards and shall
                                            conduct business and themselves ethically.

           Proportionality                  The requirement stipulated in the specification
                                            and the qualification requirements attached
                                            thereto must be appropriate, necessary and in
                                            reasonable proportion to the requirement.

           Uniform application              The SABC shall ensure that the application of a
                                            procurement policy; procurement processes and
                                            documentation are uniformly applied.

           Accountability                   Each practitioner shall be accountable for their

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SABC SCM &PP – 0001                                                              Page 15 of 46
                                            decisions and actions relative                 to    their
                                            procurement responsibilities.

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

           Value for money                  The SABC shall achieve value for money
                                            through the optimum combination of life cycle
                                            cost and quality.

           Commitment to safety,            The SABC is committed to the health and safety
           health and the                   of its personnel and its suppliers in the
           environment                      application of its procurement process.

4.5       EXCLUSIONS

4.5.1     The following products, services and processes are excluded from the
          Procurement Policy as they are regarded as compulsory sole sourcing:

4.5.1.1   Professional memberships.

4.5.1.2   Water and electricity.

4.5.1.3   Income generating transactions.

4.5.1.4   Rates and taxes and other levies raised by local authorities or provincial
          administrations.

4.5.1.5   Goods/services produced by the SABC Division/BU‟s/Region or to the other
          SABC department.

4.5.1.6   Letting and hiring, and acquisition and alienation of land and fixed property
          where the bidding process cannot be utilised.

4.5.1.7   Sponsorships and donations.

5         AUTHORITY TO EXECUTE

5.1       DELEGATION OF AUTHORITY FRAMEWORK

5.1.1     All procurement activities shall be executed in accordance with pre-established
          levels of authority through the Delegation of Authority Framework, as approved
          by the Board of Directors and delegated to the Group Executive Committee to
          ensure control and division of responsibility.

5.1.2     Delegations shall be in line with the instructions of the PFMA.


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SABC SCM &PP – 0001                                                              Page 16 of 46
5.1.3     The Board of Directors is entitled to confirm, vary or revoke any decision taken
          in consequence of a delegation, provided that no such variation or revocation
          of a decision should detract from any rights that may have accrued as a result
          of the decision.


5.2       DETERMINATION OF THRESHOLDS

5.2.1     The determination of procurement thresholds shall annually be considered by
          Group Executive Committee and approve by the Board of Directors as per
          Delegated of Authority Framework.

5.3       RESPONSIBILITIES OF PROCUREMENT PRACTITIONERS

5.3.1     Each official shall carry out his procurement activities within his line of
          responsibility and take appropriate steps to prevent any unauthorised,
          irregular, fruitless and wasteful expenditure as per Delegate of Authority
          Framework.

5.4       PARTICIPATION OF EXTERNAL ADVISORS

5.4.1     Group Chief Executive Officer shall approve the appointment of the specialist
          advisors/consultants to assist in the execution of the procurement function.

5.4.2     No advisor/consultant may form part of the final decision-making process
          regarding the award of a bid.


6         ROLES AND RESPONSIBILITIES OF GOVERNANCE
          STRUCTURES
6.1       PROCUREMENT FOCUS

6.1.1     The roles and responsibilities of all structures hereunder are defined only from
          the perspective of procurement and are also contained in detailed
          Procurement Procedure Manuals.

6.2       BOARD OF DIRECTORS

6.2.1     The Board as the Accounting Authority shall ensure that the SABC is fully
          aware of and complies with applicable laws, regulations, governance policies
          and codes of business practice as it pertains to procurement.

6.2.2     The Board shall delegate in writing any of its powers, functions or duties to the
          Group Executive Committee.

6.2.3     The Board shall ensure that effective and appropriate steps are taken to
          prevent irregular, fruitless and wasteful expenditure and losses resulting from


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SABC SCM &PP – 0001                                                              Page 17 of 46
          criminal conduct and expenditure not complying with the procurement policies
          of the SABC.

6.2.4     The Board shall ensure that all procurement is done in accordance with an
          approved budget.

6.2.5     The Board shall approve bids not delegated to any other official or structure.

6.3       PROCUREMENT SUBCOMMITTEE

6.3.1     The primary role of the committee is to advise the Board on how the goal to
          establish a procurement policy is to be achieved through the development and
          implementation of a transparent, fair and appropriate procurement and
          provisioning system and a preferential procurement policy in line with the
          relevant codes of good practice and the PFMA.

6.3.2     Maintain oversight over procurement implementation in the SABC.

6.3.3     To approve policies and ensure compliance with such policies that will assist
          the Board in making procurement decisions that are fair, equitable, sound and
          cost-effective for the SABC.

6.3.4     To adjudicate on bids and conclude contracts within its delegated authority.


6.3.4.1   To enforce and continuously monitor compliance and adherence to the B-
          BBEE scorecard by the SABC‟s suppliers.

6.3.4.2   To monitor and ensure that the SABC strikes a fair balance between
          advancing the transformation agenda when acquiring goods and services, and
          obtaining value for money.


6.3.4.3   To advise the Board, other Board committees and the Corporation generally
          on B-BBEE compliance and sound procurement decisions in the acquisition of
          programmes, goods and services, as well as capital equipment
.
6.3.4.4   The committee shall consist of not more than five (5) non-executive members
          appointed by the Board.
6.3.5

6.4       GROUP EXECUTIVE COMMITTEE

6.4.1     Maintain oversight over the implementation of the Procurement Policy.

6.4.2     Monitor and report on the implementation of the Procurement Policy and the
          SCM performance.

6.4.3     Make recommendations to the Board on matters over which the Board has
          decision-making powers.

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SABC SCM &PP – 0001                                                              Page 18 of 46
6.4.4     Recommend the reviewed Procurement Policy to the Board for approval.

6.4.5     Approve the procurement processes and procedures placed before it for
          consideration.

6.4.6     Award bids within its delegated powers.

6.5       THE GROUP CHIEF EXECUTIVE OFFICER

6.5.1     The Group Chief Executive Officer as the Accounting Officer shall take all
          reasonable steps to ensure that the SABC implements a procurement policy in
          line with its strategic objectives.

6.5.2     Take all reasonable steps to ensure that proper mechanisms, delegation
          (through sub-delegation) and separation of duties in the procurement
          environment are in place to minimise the likelihood of fraud, corruption,
          favoritism and unfair and irregular practices.

6.5.3     The Group Chief Executive Officer or delegate is responsible for the
          preparation and submission of the procurement policy as well as amendments
          thereof to the Board of Directors for approval.

6.6       BID EVALUATION COMMITTEE (BEC)

6.6.1     An ad hoc Bid Evaluation Committee shall be constituted for each project or
          procurement activity and shall comprise at least one representative from the
          business unit and at least one procurement practitioner of the SABC. In the
          case of functional evaluation, at least two representatives from the business
          unit with relevant technical expertise must be part of the BEC.
6.6.2     The BEC shall carry out a preliminary evaluation of all valid bids received and
          shall submit a draft bid evaluation report to the relevant award structure for
          consideration.

6.6.3     A representative of Internal Audit and/or Legal Services may form part of the
          BEC, which may also include an internal or external specialist/expert as
          necessary. In the event that is necessary the Head of Procurement shall
          appoint such expert/specialist.

6.6.4     In order to preserve the integrity of the competitive process, it is imperative
          that the evaluation of proposals is undertaken objectively, consistently and
          without bias towards particular suppliers.

6.7       THE CLUSTER

6.7.1     Award bids within its delegated powers.



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SABC SCM &PP – 0001                                                              Page 19 of 46
6.7.2     Recommends bids in excess of its delegation to the Group Executive
          Committee.

6.7.3     Consider all other matters as delegated from time to time.

6.7.4     The Cluster shall be composed of cross-functional senior managers from
          various Divisions.

6.8       BID ADJUDICATION COMMITTEE (BAC)

6.8.1     Consider the evaluation report and recommendations of the Bid Evaluation
          Committee and award bids within its delegated powers.

6.8.2     Recommends the award in excess of its delegation to the Clusters.

6.8.3     Approve the short listing of bidders.

6.8.4     Approve cancellation of bids.

6.8.5     Recommend deviations to bidding to the Clusters.

6.8.6     Consider all matters as delegated from time to time.

6.8.7     The BAC shall be comprised of at least four senior managers, who will be
          appointed by Group Chief Executive Officer in writing in consultation with the
          Group Executive Committee.

6.8.8     A representative of Internal Audit may form part of this committee, which may
          also include an internal or external specialist/expert as necessary.

6.8.9     The Bid Adjudication Committee shall be comprised of at least four senior
          managers, and shall include:
6.8.9.1   COO
6.8.9.2   CFO
6.8.9.3   Head of Legal
6.8.9.4   Head of Procurement

6.9       REGIONAL BID ADJUDICATION COMMITTEE (RBAC)

6.9.1     Award bids within its delegated powers.

6.9.2     Recommends the award in excess of its delegation to the BAC.

6.9.3     Recommend deviations to bidding to the Clusters.

6.9.4     Consider all matters as delegated from time to time


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SABC SCM &PP – 0001                                                              Page 20 of 46
6.9.5     The RBAC shall be comprised of at least three senior managers, who will be
          appointed by Group Chief Executive Officer in writing.
6.9.6     A representative of Internal Audit and/or Legal Services may form part of the
          RBAC, which may also include an internal or external specialist/expert as
          necessary.

6.10      HEAD OF PROCUREMENT

6.10.1    The Head of Procurement has the authority to procure on behalf of the
          business units.

6.10.2    The Head of Procurement or delegate may establish ad hoc governance
          structures to manage the procurement process and to assist him to make
          recommendations to the award committees.

6.10.3    Develop and implement the Procurement Policy and strategy.

6.10.4    Develop and implement the preferential procurement strategy.

6.11      SUPPLY CHAIN MANAGEMENT UNIT

6.11.1    The SCM Unit shall have the following procurement responsibilities:

             Manage the material/service master.
             The procurement plan.
             Quotation/bid management.
             Compliance checks of bids
             Facilitate evaluations and recommendations.
             Facilitate adjudication.
             Award contracts.
             Contract conclusion.
             Order management.
             Risk management.

6.12      BUSINESS UNITS

6.12.1    The line functionaries shall have the following procurement responsibilities:

           Take ultimate responsibility for the provision of specifications/terms of
            reference.
           Assist with evaluations and recommendations.
           Ensure availability of approved expenditure before procurement.
           Contract and SLA management.

6.13      AWARD COMMITTEES


6.13.1    The following are the Award Committees:


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SABC SCM &PP – 0001                                                              Page 21 of 46
         Procurement Official                      Award quotations up to and including
                                                    the    quotation     threshold within
                                                    delegated authorities.

         Regional  Bid          Adjudication  Award bids within its delegated
         Committee                             powers.
                                              Recommends bids in excess of its
                                               delegation, to the BAC.
         Bid Adjudication Committee                Award bids within its delegated
                                                    powers.
                                                   Recommends bids in excess of its
                                                    delegation, to Clusters.
         Clusters                                  Award bids within its delegated
                                                    powers.
                                                   Recommends bids in excess of its
                                                    delegation, to Group   Executive
                                                    Committee.
         Group Executive Committee                 Award bids within its delegated
                                                    powers.
                                                   Make recommendations to the Board
                                                    on bids over which the Board has
                                                    decision-making powers.
         Board of Directors                        Award all bids not delegated and
                                                    approves recommendations made by
                                                    the Group Executive Committee



7         ESTABLISHMENT

7.1       THE SCM UNIT

7.1.1     The Board of Directors or delegate shall establish a separate SCM Unit to
          implement its Procurement Policy.

7.2       TRAINING OF PROCUREMENT PRACTITIONERS

7.2.1     The SABC Training and Development Unit shall ensure that officials
          implementing the procurement system are trained and deployed in terms of
          the Treasury Regulations 16A and other relevant training guidelines.

8         BUSINESS CONDUCT AND ETHICS
8.1       GUIDELINE PRINCIPLES

8.1.1     The SABC commits itself to a policy of fair dealing, equal treatment and
          integrity in the conducting of its procurement activities.
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SABC SCM &PP – 0001                                                              Page 22 of 46
8.1.2     The SABC shall conduct business in a manner that encourages good supplier
          relations, with mutual trust and respect and within an environment that
          promotes competition, avoids combative practices and is in compliance with
          the law.

8.1.3     Breach of or failure to comply with any aspect of the procurement system must
          immediately be reported to the GCEO in writing.

8.1.4     In conducting procurement business all staff, (including procurement
          practitioners, members of committees and specialist advisers involved in the
          procurement process), should adhere to SABC code of ethical conduct.

8.1.5     The legislation dealing with fraud and corruption as it pertains to the
          procurement environment, shall be adhered to.

8.1.6     Acceptable courtesies or gifts must be recorded and must, in all cases, be
          lawful; unsolicited; infrequently provided in accordance with customary and
          acceptable business practices; and, must not influence or appear to influence
          your business decisions in line with a gift policy and PFMA. The approval
          process will be clearly outlined in the Procurement Procedure Manual.

8.1.7      The policy on SABC employees holding directorships in outside organisations
          shall be adhered to as it pertains to the procurement process.

8.1.8     No SABC employee or immediate family member of any employee shall,
          directly or indirectly, solicit, accept, or retain a personal benefit or a benefit for
          a third party from any supplier or any individual or organization doing business,
          or seeking to do business, with SABC.

8.2       DECLARATION OF INTEREST

8.2.1     If any role player in the procurement process has any private or business
          interest in any contract to be awarded, that interest must be disclosed and
          where a conflict is recognized, that role player must withdraw from
          participating in any manner whatsoever in the process relating to that process.

8.2.2     If a person fails to declare such business interest the decision to award may
          be rescinded.


9         PREFERENTIAL                   PROCUREMENT                       ABUSE                 AND
          FRONTING

9.1       GENERAL

9.1.1     The Group Chief Executive Officer or delegate shall vigorously pursue all legal
          remedies available in the event that the preferential procurement system is
          abused, particularly through, for example, but not limited to the following:

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SABC SCM &PP – 0001                                                              Page 23 of 46
9.1.2     If a bidder has promised, offered or given a bribe during the bidding process
          and/or after conclusion of the contract.

9.1.3     If a bidder has acted in a fraudulent manner or in bad faith or in any other
          improper manner during the bidding process or after conclusion of the
          contract.

9.1.4     That an agreement was entered into with the contractor on the strength of
          information furnished by him, and it became apparent after conclusion of such
          agreement that the information provided was incorrect.

9.2       The Group Chief Executive Officer or delegate will endeavour, where possible,
          to identify fronting before a contract is awarded.

9.3       To protect both parties to an agreement, potential vendors and the SABC
          procurement officers, all must be made aware of the implications of any
          contraventions.

9.4       Where the Group Chief Executive Officer or delegate or any procurement
          practitioner becomes aware of a possible fronting case, the process in
          accordance with the Constitution, the rules of Administrative Law and the
          Promotion of Administrative Justice Act, shall be followed and where
          appropriate, criminal charges will be laid with the SAPS.

9.5       The Group Executive Committee shall ensure that conduct, dealings and
          actions in terms of the preferential procurement system are bona fide and not
          abused for any purpose, neither for the benefit of the SABC nor for the benefit
          of any potential supplier or individual.

9.6       Where, after award of a contract it becomes evident that the award made to
          the contractor based on incorrect information constituting fronting, the
          appropriate action is to be taken in accordance with all legal remedies
          available.


10        RISK MANAGEMENT
10.1      RESPONSIBILITY FOR RISK MANAGEMENT

10.1.1    The Head of Risk and Strategy shall ensure that the SABC has and maintains
          an effective system of risk management for the identification, consideration
          and avoidance of potential risks in the procurement system and to determine
          the SABC‟s risk appetite pertaining to procurement.

10.1.2    Relevant stakeholders shall identify risk on a case-by-case basis, allocate risk
          to the party best able to manage such risk and the bid and contract


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SABC SCM &PP – 0001                                                              Page 24 of 46
          documentation shall clearly state to whom the risk has been allocated and who
          should take responsibility for managing it.

10.1.3    The Head of Procurement or delegate shall ensure that procurement related
          duties are properly separated, and opportunities for fraudulent activities,
          irregular transactions, and collusion are mitigated by implementation of sound
          separation of duties.

11        MANAGEMENT OF SUPPLIERS
11.1      SUPPLIER SELECTION

11.1.1    Preference will be given to suppliers who meet the set minimum
          selection/qualification criteria in line with Codes of Good Practice (Level 1 to
          6till 31 March 2008 and levels 1 to 5 from 1 April 2008).

11.2      DATABASE OF PROSPECTIVE SUPPLIERS

11.2.1    The SABC shall establish and maintain a database of prospective suppliers
          per commodity for the purpose of obtaining quotations up to the quotation
          threshold.

11.2.2    The database of prospective suppliers shall be used effectively to promote B-
          BBEE and SMMEs.

11.2.3    Prospective suppliers will be assessed in terms of predetermined evaluation
          criteria. Suppliers‟ credentials shall comply with verification requirements of B-
          BBEE.

11.3      SUPPLIER RELATIONSHIP MANAGEMENT

11.3.1    The SABC shall maintain and practice the highest possible standards of
          business ethics, professional courtesy, and competence in all its dealings.

11.3.2    The SABC‟s suppliers shall be categorised into four groups, namely strategic
          suppliers, leverage suppliers, routine suppliers and bottleneck suppliers.

11.3.3    Appropriate supplier relationship management programmes will be
          implemented for each category of suppliers to improve all processes that affect
          supply of goods and services and to guarantee that such key goods and
          services are consistently delivered to SABC with the required levels of quality
          and as further outlined in the Procurement Procedures Manual.

11.3.4    The SABC Supplier Relationship Management Programme shall be a joint
          effort between SABC and its suppliers.




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SABC SCM &PP – 0001                                                              Page 25 of 46
11.3.5




11.4      SUPPLIER PERFORMANCE EVALUATION



11.4.1    Suppliers‟ performance shall be evaluated against agreed contractual SLAs
          and deliverables per project and at least once a year for all major or critical
          vendors.

11.5      SUPPLIER RESTRICTION

11.5.1    Suppliers may, under the under-mentioned circumstances, be restricted from
          only future or current and future business with the SABC for a term determined
          by the Group EXCO.

11.5.1.1 Non-compliance with legislation such as the Prevention and Combating of
         Corrupt Activities Act.

11.5.1.2 Proven non-performance/non-compliance with contractual obligations when
         stipulated as a condition of bid and contract.

11.5.1.3 Proven unethical actions and behavior and abuse of the supply chain system.

11.6      THE BID COMMUNICATION PROCESS

11.6.1    The channel for all de facto communication shall be through the Group Chief
          Executive Officer and Head of Procurement or delegate as the custodian of
          procurement process.

11.7      SUPPLIER SAMPLES AND FACILITIES

11.7.1    Samples of commercially available products may be received.

11.7.2    The SABC shall not pay for samples provided and damaged/destroyed
          samples as a result of destruction testing.

11.7.3    The SABC shall not endorse any products.

11.7.4    The SABC will provide feedback on the results of the tested samples.


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SABC SCM &PP – 0001                                                              Page 26 of 46
11.7.5    Visits to suppliers‟ facilities should only be to evaluate a supplier‟s capabilities.

11.7.6    Supplier representatives may, on request, have access to the SABC‟s
          properties to deal with their proposals, products and enquiries through the
          SCM Unit‟s relevant delegate.

11.8      SUPPLIER CAPACITY MANAGEMENT

11.8.1    Over and above the determination of the supplier capacity to execute on a
          specific project, the SABC shall monitor the amount of work awarded to a
          single supplier in line with the supplier capacity to ensure that a supplier does
          not exceed its confirmed capacity or become over-dependent on the SABC.

11.9      PURCHASES            FROM         SABC        EMPLOYEES             AND        FORMER
          EMPLOYEES

11.9.1    It shall be the SABC‟s policy not to purchase any goods or services from any
          employee or employee owned business, to ensure that suppliers competing for
          the SABC‟s business have confidence in the integrity of SABC‟s selection
          process.

12        PREFERENTIAL PROCUREMENT
12.1      GENERAL

12.1.1    The SABC shall promote, accelerate and support procurement of goods and
          services from B-BBEE suppliers in line with the appropriate legislation and its
          preferential procurement policy.

12.1.2    The SABC shall implement a robust verification system to minimise fronting
          until such time that each supplier has a B-BBEE rating certificate as required
          by the Codes of Good Practice.

12.2      SET-ASIDE MECHANISM

12.2.1    The SABC will only procure from businesses with a Level 1 to 6 B-BBEE rating
          till 31 March 2008 where after it will only procure from businesses with a Level
          1 to 5 B-BBEE rating.

12.2.2    A minimum of 60% of its B-BBEE Procurement Spend must come from
          suppliers based on the B-BBEE Procurement Recognition Levels 1 - 6 as a
          percentage of Total Measured Procurement Spend for the period ending
          31 March 2008.

12.2.3    Should all parties to a consortium/joint venture not be Level 1 to 6 contributors,
          then the non-complying parties may not, in total, contribute more than 30% to
          the assignment.

12.3      ACCESS TO REQUIREMENTS

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SABC SCM &PP – 0001                                                              Page 27 of 46
12.3.1    Where feasible, large requirements may be divided into smaller more
          manageable requirements to accommodate SMMEs.

12.3.2    Where feasible, the SABC shall, in bid documents, promote subcontracting
          and joint ventures with SMME‟s and with B-BBEE enterprises where the B-
          BBEE or SMME enterprises will be unable to fulfill all bid requirements due to
          the size or nature of the requirement.

12.4      TRANSPARENCY AND ACCESS TO INFORMATION

12.4.1    The SABC shall, in bid/quotation documents, stipulate the preference point
          system to be applied in adjudication.

12.5      PREFERENTIAL SCORING

12.5.1    Bids/quotations must include criteria for the evaluation thereof to identify the
          quotation/bid that represents the best value for money.

12.5.2    The price point formula as stipulated in the policy under the evaluation process
          must be used to calculate the points for price. The maximum score must be
          allocated to the lowest priced acceptable bid/quote. Any other acceptable
          quotations/bids, which are higher in price, must score fewer points on a pro
          rata basis, calculated on their prices in relation to the lowest acceptable
          quotation/bid in accordance with a prescribed formula.

12.5.3    The contract must be awarded to the bidder who scores the highest points
          unless objective criteria as per the bid document justify the award to another
          bidder. Where the award is made to a bidder who is not the highest points
          scorer, the reasons for deviating from the policy will be specifically minuted at
          the committee meeting.

12.6      PAYMENT TERMS

12.6.1    QSEs up to a turnover of R20 million and EMEs shall qualify for earlier
          payments (7 days or 15 days) after receipt of a valid original invoice together
          with all relevant documentation.

12.6.2    Contracts will be structured to have multiple deliverables against which to
          invoice to assist at least QSEs and EMEs with enhanced cash flow while
          minimizing the risk to the SABC.

12.7      SUPPLIER DATABASE DEVELOPMENT

12.7.1    The SABC shall develop and advertise its supplier database to ensure that it
          attracts B-BBEE and SMME enterprises in the relevant categories.

12.8      ENTERPRISE DEVELOPMENT



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SABC SCM &PP – 0001                                                              Page 28 of 46
12.8.1    The SABC shall ensure that its potential suppliers have access to the supplier
          development programmes of the dti and its agencies such as SEDA.

12.8.2    The SABC shall facilitate the access to financing options for its potential
          suppliers to deliver on contracts to ensure that they may enter the market to
          ensure that they may compete against established suppliers.

12.8.3    Where there are not sufficient BEE suppliers in the market for a specific
          commodity, the SABC shall facilitate the development of suppliers through its
          supplier development programmes.

12.9      MONITORING AND PERFORMANCE MEASUREMENT

12.9.1    The SABC shall monitor all contracts where joint ventures/consortia are
          involved to ensure that the B-BBEE and SMME enterprises have access to
          their relevant share in the decision-making, risk and profit commensurate with
          its shareholding of the joint venture/consortium.

12.9.2    The SABC shall record its procurement spend and shall report appropriately to
          the Board of Directors on the preferential procurement spend.


13        DEMAND MANAGEMENT
13.1      SYSTEM OF DEMAND MANAGEMENT

13.1.1    Demand management shall translate the annual performance plans of the
          SABC into current and future needs, to cost and budget for it.

13.1.2    The demand management system must ensure that the resources required
          supporting the strategic and operational commitments of the SABC are
          delivered at the correct time, at the right price and at the right location, and
          that the quantity and quality satisfies the needs of the SABC.

13.2      PLANNING PROCESS

13.2.1    The SCM Unit shall participate in the annual performance and operational
          planning process to determine strategic sourcing that will ultimately provide
          best value for money.

13.3      ASSESSMENTS AND ANALYSES

13.3.1    The annual performance plan must be analysed in terms of goods and
          services required over the short and medium term with frequency of the needs
          and the critical delivery dates.

13.3.2    Take details of available stock, goods in transit, redundant and obsolete
          assets and assets to be renewed into account.

13.3.3    Analyse past expenditure and the supplying industry

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SABC SCM &PP – 0001                                                              Page 29 of 46
13.3.4    Determine sourcing strategies

13.4      PROCUREMENT PLAN

13.4.1    The SCM Unit shall compile a procurement plan for each quarter of the next
          financial year, where feasible.

14        SYSTEM OF PROCUREMENT MANAGEMENT

14.1      HIERARCHY FOR SATISFYING REQUIREMENTS

14.1.1    Before satisfying requirements by procuring from outside sources, the
          requirements must first be endeavoured to be satisfied through pre-
          established sources.

14.2      PRE-ESTABLISHED SOURCES

14.2.1    The pre-established sources to be considered first in order to satisfy
          requirements, are items in stock, items on pre-established contracts and
          sourcing from other government institutions where feasible.

14.3      PROCUREMENT OF GOODS, SERVICES AND WORKS

14.3.1    Goods, services and works shall only be procured in accordance with
          authorised procurement processes.

14.3.2    Procurement of goods, services and works, either through quotations or
          through a bidding process, shall be within the threshold values as determined
          through the Delegation of Authority Framework document.

14.3.3    The system shall be fair, equitable, transparent, competitive and cost-effective.

14.3.4    The system shall be in line with the spirit of the PPPFA and linked with the B-
          BBEE Act, the B-BBEE strategy and the Codes of Good Practice.

14.3.5    The system shall provide for all procurement functions and comply with
          applicable regulations.

14.4      PROCUREMENT FROM ABROAD

14.4.1    The SABC may procure from abroad if it can be certified in writing that the
          product/service cannot be sourced locally or through local representatives and
          that no other similar product will serve the purpose, that a local sourcing
          process has been run without any success, by obtaining approval from the
          Board of Directors or delegate or where the prices of the locally available
          supply/service are exorbitant.

14.5      PROCUREMENT FROM GRANTS FROM DONORS

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SABC SCM &PP – 0001                                                              Page 30 of 46
14.5.1    The SABC must utilise donor funds in accordance with donors‟ procurement
          procedures in cases where technical assistance agreement prescribes them to
          do procurement according to the donors‟ procedures.

14.5.2    The SABC must adhere to its own prescripts where donors do not require
          them to do procurement according to donors‟ procedures.

14.6      REQUEST FOR INFORMATION (RFI)

14.6.1    If sufficient information is not readily available with which to draft terms of
          reference/specifications, a RFI process may be followed in order to obtain
          more market information.

14.7      REQUEST FOR QUOTATIONS (RFQ)

14.7.1    The RFQ process should be followed for all requirements up to the quotation
          threshold.

14.8      REQUEST FOR PROPOSALS (RFP)

14.8.1    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
          suppliers.

14.9      NEGOTIATIONS

14.9.1    Direct negotiations for non-content procurement shall only be permitted after
          approval by the Group Chief Executive Officer or delegate and shall be
          conducted in such a manner that none of the stakeholders is advantaged or
          prejudiced.

14.9.2    The Group Chief Executive Officer or delegate may negotiate the contract only
          with the preferred bidder identified by means of the competitive bidding
          process.

14.9.3    Direct negotiations for Content, shall be permitted after approval by the Head
          of the Content Enterprise business unit, involving the office of the Head of
          Procurement and in line with the Content Acquisition Procedures.

14.9.4    The Head of the Content Enterprise business unit or delegate may negotiate
          the contract only with the preferred bidder identified though a RFP process or
          after an unsolicited bid.

14.10     PUBLIC PRIVATE PARTNERSHIPS

14.10.1   The SABC shall ensure that Treasury Regulation 16 is complied with when
          goods or services are procured through public private partnerships or as part
          of a public private partnership.

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SABC SCM &PP – 0001                                                              Page 31 of 46
14.11       BUILDING, ENGINEERING OR CONSTRUCTION WORKS

14.11.1     In case of construction works, it shall be done according to the policy of the
            Construction Industry Development Board (CIDB).

14.12       APPOINTMENT OF CONSULTANTS / PROFESSIONAL SERVICES

14.12.1     The SABC shall prescribe specific rules and procedures for the appointment of
            consultants and professional services.

14.12.2     Consultants should only be engaged when the necessary skills and/or
            resources to perform a project/duty/study are not available and the Group
            Chief Executive Officer cannot be reasonably expected either to train or to
            recruit people in time available.

14.12.3     The work undertaken by consultant shall be regulated by a contract.

14.12.4     Consultants are required to provide professional, objective and impartial
            advice and at all times hold the client‟s interests paramount, without any
            consideration for future work.

14.13       UNSOLICITED BIDS

14.13.1     The SABC is not obliged to consider unsolicited bids received outside a
            normal bidding process, whether it pertains to the procurement of content or
            otherwise.

14.13.2     The SABC may only consider an unsolicited bid if the following have been
            complied with:

14.13.2.1       The product or service offered in terms of the bid is a demonstrably or
                proven unique innovative concept

14.13.2.2       The product or service offered will be exceptionally beneficial to, or have
                exceptional cost advantages for, the SABC

14.13.2.3       The person or entity that made the bid is the sole provider of the product
                or services; and

14.13.2.4       The reasons for not going through the normal bidding processes are
                found to be sound by the Group Chief Executive Officer.

14.14       PETTY CASH

14.14.1     Petty cash is the least preferred of all procurement commitment channels and
            is limited to R2000.00 per transaction, without inviting quotations or
            competitive bids.


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SABC SCM &PP – 0001                                                                Page 32 of 46
14.14.2   The petty cash policy which is the responsibility of the Finance Department,
          shall stipulate for which items and under which circumstances petty cash may
          not be utilised such as for items available on contract.

14.15     PROCUREMENT PROCESS UP TO R100 000 (VAT INCL.)

14.15.1   Requirements may be procured without inviting competitive bids or written
          quotations. Obtain a minimum of 2 (two) verbal quotations from the database
          of prospective suppliers and have them confirmed in writing by the supplier.

14.16     PROCUREMENT PROCESS FROM ABOVE R100 000 AND UP TO
          R2 MILLION (VAT INCL.)

14.16.1   Requirements may be procured by inviting minimum of 3 (three) written
          quotations from the prospective supplier database.

14.16.2   Where no suitable suppliers are available from the database, quotations may
          be obtained from other possible suppliers not on the database.

14.16.3   If it is not possible to receive at least 3 (three) quotations, the reasons should
          be recorded and approved by the Head of Procurement or the delegate.

14.17     RANGE OF PROCUREMENT PROCESSES ABOVE R2 MILLION

14.17.1   Competitive open bidding shall be used for procurement above R2 million.

14.17.2   The SABC may apply the two-stage bidding process in cases of turnkey
          contracts or works of special nature, when it is impractical to prepare technical
          specifications in advance.

14.17.3   The SABC may apply the process of pre-qualification of bidders. Pre-
          qualifications should be based entirely upon the capacity and resources of
          prospective bidders to perform the particular contract.

14.17.4   Where goods or services of a specialised nature are required on a recurring
          basis, a list of approved suppliers for the supply of goods or services may be
          established through the competitive bidding process.

14.18     DEVIATION FROM THE BIDDING PROCESS

14.18.1   The SABC shall use limited bidding only in the following exceptional
          circumstances, in case of urgency where unforeseen early delivery and urgent
          business continuity is of critical importance and the standard procurement
          process is impossible or impractical.

14.18.2   Urgent cases are cases where early delivery is of critical importance and the
          invitation of competitive bids is either impossible or impractical.



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SABC SCM &PP – 0001                                                              Page 33 of 46
14.18.3   In cases of emergency which are defined as serious, unexpected and
          potentially dangerous circumstances requiring immediate rectification such as
          a threat or interruption in the SABC‟s ability to execute its mandate or an
          immediate threat to the environment or human safety.

14.18.4   Multiple sources bidding where there is proven limited competition in the
          market and there is good reason to restrict it to only those few bidders such as
          in the case of standardisation on a certain brand product.

14.18.5   Single source bidding where, after a thorough analysis, there is good and
          justifiable reason to restrict the process to only one bidder such as where you
          enter into a maintenance contract with only the bidder who supplied the
          product otherwise the product loses its guarantee.

14.18.6   Sole source bidding where no competition exists and it is proven that only one
          bidder exists.

14.18.7   The deviations may only be approved by the appropriate authority as per the
          Delegation of Authority Framework.

14.18.8   The Group Executive Committee must sign off deviations from normal
          procurement processes.

14.19     PROCUREMENT OF CONTENT

14.19.1   The SABC acquires content for the purpose of broadcasting across various
          platforms and through various mediums. The Content Enterprise business unit
          is responsible for acquiring content for the platforms and the News business
          unit is responsible for providing News content in the form of News bulletins
          and News Current Affairs programmes to the channels and Radio stations for
          broadcast.

14.19.2   This Policy shall therefore be read in conjunction with Content Acquisition
          Procedures and where a conflict arises, this policy shall prevail and the Head
          of Procurement shall ensure that the appropriate amendments to the content
          acquisition shall be made.

14.19.3   The SABC shall procure locally produced programmes through either RFP‟s or
          unsolicited proposals for it to meet its mandate, license conditions and
          competitive advantage.

14.19.4   Content for SABC will be purchased using the SAP system, in accordance with
          the process established and involving the office of the Head of Procurement
          where possible to negotiate both one-off and repeated programmes.

14.19.5   The Head of Procurement or delegate shall be part of the pitching sessions as
          envisaged in both International and the Local programmes acquisition process.


15        QUOTATION/BID COMPILATION
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SABC SCM &PP – 0001                                                              Page 34 of 46
15.1      LANGUAGE OF QUOTATION/BID DOCUMENTS

15.1.1    The SABC shall compile all documentation in at least English.

15.2      CALLING FOR BIDS/QUOTATIONS

15.2.1    Bids and quotations shall be invited by the SCM Unit as the SABC has a
          centre-led (centralised) procurement strategy.

15.3      DETERMINING THE CLOSING PERIOD

15.3.1    Bids shall be advertised for a minimum of 14 days before closing date and
          time, except in urgent cases when bids may be advertised for such shorter
          period as the Group Chief Executive Officer or the delegate may
          determine/approve.

15.3.2    Quotations shall be held open for a minimum of 7 days before closing date and
          time, except in urgent cases when quotations may be requested to be
          submitted within such shorter period as the Group Chief Executive Officer or
          the delegate may determine/approve.

15.3.3    The principle of allowing bidders enough time to prepare comprehensive bids
          must be observed.

15.4      DETERMINING THE VALIDITY PERIOD

15.4.1    The validity period should allow the SABC sufficient time to finalise the
          evaluation and award process of the quotation/bid.

15.4.2    Bids must be valid for at least 60 to 90 days from the closing date of the bid or
          for such longer period as the Group Chief Executive Officer or the delegate
          may approve.

15.4.3    An extension of validity must be requested in writing from all bidders before
          the expiry date.

15.5      ELEMENTS FOR INCLUSION IN BID DOCUMENTS

15.5.1    Bid documentation shall at least include a terms of reference/specification,
          evaluation and adjudication criteria as well as relevant conditions and forms.

15.5.2    Bidders shall all receive the same information in documentation and should be
          assured of an equal opportunity to obtain additional information on a timely
          basis to ensure fairness.

15.6      SPECIFICATIONS/TERMS OF REFERENCE

15.6.1    Specifications and terms of reference shall be compiled with the use of
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SABC SCM &PP – 0001                                                              Page 35 of 46
          technical expertise in the relevant requirement field. It shall be comprehensive
          and clear to allow bidders the opportunity to address the requirement in detail.

15.7      PLANNING FOR PRE-BID BRIEFING SESSIONS

15.7.1    Details of bid briefing sessions shall be indicated in the bid documents as well
          as in the advertisements and it shall be indicated whether they are compulsory
          or not.

16        ISSUING OF QUOTATIONS/BIDS
16.1      ADVERTISING OF BIDS

16.1.1    All bids shall at least be advertised on the SABC website and media with
          national coverage where required in order to reach the target market, taking
          cost-effectiveness into account and shall remain open for the period
          determined in the bid document.

16.2      CLOSING TIME OF BIDS/QUOTATIONS

16.2.1    Bids/quotations of the SABC shall close at a time and on the day and at the
          place indicated in the bid/quotation documents.

16.3      AVAILABILITY OF BID DOCUMENTS
16.3.1    Bid documents shall be ready and available before the requirement is
          advertised.

16.3.2    Bid documents may be collected by or may be e-mailed or posted to
          prospective bidders.

16.4      SALE OF BID DOCUMENTS

16.4.1    The SABC shall, where so decided, make its bid documents available at a
          predetermined cost.

16.4.2    The fee shall not be used as a barrier to prevent certain bidders from bidding.

16.5      RESPONSES RECEIVED

16.5.1    The SABC shall maintain a register/list of all responses to the advertisement or
          the individuals/organisations targeted in the case of quotations.

16.6      PRE-BID BRIEFING SESSIONS

16.6.1    Minutes of the meeting should be provided to all prospective bidders in the
          case of non-compulsory sessions and only to those who attended in the cast
          of compulsory sessions.


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SABC SCM &PP – 0001                                                              Page 36 of 46
16.7      CHANGING OF INFORMATION BEFORE CLOSING TIME

16.7.1    Any additional information, clarification, correction of errors, or modifications of
          bid documents should be sent to each recipient of the original bid documents
          in sufficient time before the closing date and time for receipt of bids to enable
          bidders to take appropriate actions.

16.7.2    A bidding invitation shall be cancelled and fresh bids invited where conditions
          or the specification or any other information have to be materially changed
          before the closing time

16.8      POSTPONEMENT OF CLOSING DATE

16.8.1    The closing date may be postponed only if all prospective bidders can be
          advised of the postponed date in writing before the original closing date.

17        RECEIVING AND OPENING OF RESPONSES
17.1      GENERAL GUIDELINES

17.1.1    A fair and transparent process shall be followed for the closing, receiving,
          opening and processing of quotations/bids.

17.1.2    All bids/quotations received before the closing time and date must be kept
          unopened in safe custody until the closing date and time of the
          bids/quotations.

17.1.3    Verbal quotations may be received in any manner as long as the successful
          quotation is confirmed in writing before the final award is made.

17.1.4    Written quotations received by facsimile transmitter, e-mail or similar media
          may be accepted as valid if received before the closing time.

17.1.5    Bidders shall be allowed to submit bids by mail or by courier or by hand
          provided bids are deposited in the bid box or received over the counter at the
          physical address of the SABC before the closing time.

17.1.6    A bid box, appropriately locked to prevent unauthorised removal of bids, shall
          be visible on the premises of the SABC and shall be accessible to all bidders.

17.1.7    Details of bids received shall be recorded in a register.

17.2      CONFIDENTIALITY

17.2.1    After opening of bids, information relating to the examination, clarification and
          evaluation of bids and recommendations concerning awards should not be
          disclosed to bidders or other persons not officially concerned with the process,
          until the successful bidder is notified of the award.


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SABC SCM &PP – 0001                                                              Page 37 of 46
17.3      BIDS RECEIVED LATE

17.3.1    Bids are late if they are received at the address indicated in the bid documents
          after the closing date and time. Bids received late and not admitted, shall be
          returned unopened to the bidder.

17.3.2    Where no bid or no acceptable bid has been received on time, the SABC
          reserves the right to admit late bids for consideration.

18        EVALUATION PROCESS

18.1      GENERAL

18.1.1    The SABC shall evaluate a bid or quote based on the content of the
          documentation and the statutory and evaluation criteria stipulated covering the
          areas of finance, functionality (technical) and preferential procurement.

18.2      REASONS FOR REJECTION

18.2.1    The SABC shall reject a proposal for the award of a contract if the
          recommended bidder has committed a proven corrupt or fraudulent act in
          competing for the particular contract.

18.3      COMPLIANCE CHECK PROCEDURES

18.3.1    The SCM Unit shall do a compliance check to ensure that the quotation/bid
          documentation complies with the predetermined conditions and that all
          required forms and information are submitted, completed in full and legible and
          does not warrant the bid/quote to be rejected.

18.3.2    Tax clearance certificates and TV license

18.3.2.1 The SABC shall reject any bid from a supplier who, at the time of bid
         submission or as allowed by the SABC within a reasonable time:

           Fails to provide written proof from SARS that the supplier either has no
              outstanding tax obligations or has made arrangements to meet outstanding
              tax obligations.

           Fails to provide proof of a valid TV license or has made arrangement to
            meet outstanding obligations.

18.3.3    The SABC must ensure that the following forms/elements are submitted,
          completed and/or considered before a final award is made:

18.3.3.1 Samples

18.3.3.2 Declaration of interest


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SABC SCM &PP – 0001                                                              Page 38 of 46
18.3.3.3 Declaration of bidder‟s past SCM practices

18.3.3.4 Proof of B-BBEE status

18.3.3.5 Supplier‟s own conditions, if submitted and acceptability thereof.

18.3.3.6 A document containing a signature confirming the validity of the submission.

18.4      CONSIDERATION OF ADDITIONAL INFORMATION

18.4.1    Information received after the closing date, may only be taken into
          consideration if it would not influence the original recommendation made
          based on the original information received.

18.5      THE EVALUATORS

18.5.1    All evaluators who are involved in the evaluation and recommendation
          process, or who is in any way involved with the procurement process, shall
          declare all interests and shall certify that he complies with The Prevention and
          Combating of Corrupt Activities Act.

18.5.2    Relevant technical, financial and preferential expertise must be applied in the
          evaluation.

18.5.3    Where no value-based judgment has to be made such as in the case of the
          purchase of goods, technical evaluation may be done by one or more
          evaluator and must include a procurement officer.

18.5.4    Where value-based judgments has to be made such as in the case of
          professional services, functional evaluation must be done by more than one
          evaluator and include a procurement officer at all times to facilitate the
          process.

18.6      DETERMINATION OF COMPLIANCE WHERE NO FUNCTIONALITY
          IS INVOLVED

18.6.1    Determine whether the product service offered, complies with the specification.

18.7      DETERMINATION             OF      PERCENTAGE              FOR       FUNCTIONALITY
          (TECHNICAL)

18.7.1    The percentage importance for functionality must be determined by the time
          the bid/quotation document is published.

18.7.2    The percentage scored for functionality should be calculated as follows:

18.7.2.1 Each evaluator shall award values for each individual criterion on a score
         sheet. The value scored for each criterion shall be multiplied with the specified
         weighting for the relevant criterion to obtain the marks scored for the various
         criteria. These marks should be added to obtain the total score.
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SABC SCM &PP – 0001                                                              Page 39 of 46
18.7.3    The following formula should then be used to convert the total score to a
          percentage for functionality:
                      So
              Ps        X Ap
                      Ms

              where

              Ps = percentage scored for functionality by bid/proposal under
              consideration

              So = total score of bid/proposal under consideration

              Ms = maximum possible score

              Ap = percentage allocated for functionality

18.7.4    The percentages of each evaluator shall be added together and divided by the
          number of evaluators to establish the average percentage obtained by each
          individual bidder for functionality.

18.7.5    After calculation of the percentage for functionality, the prices of all bids that
          obtained the minimum score for functionality should be taken into
          consideration.

18.8      ELIMINATION OF PROPOSALS ON GROUNDS OF FUNCTIONALITY

18.8.1    Bids that score less than a predetermined percentage for functionality may be
          eliminated from further consideration if this was stipulated as a condition in the
          bid/quotation document.

18.9      DETERMINATION OF PERCENTAGE FOR PRICE

18.9.1    The percentage scored for price shall be calculated as follows:

18.9.2    The lowest acceptable bid/proposal (adjusted with implied price adjustments or
          not), will obtain the maximum percentage allocated for price. The other
          bids/proposals with higher prices (adjusted or not), will proportionately obtain
          lower percentages based on the following formula:

              Ps  P min X Ap
                     Pt

              where


              Ps = percentage scored for price by bid/proposal under consideration

              Pmin = lowest acceptable bid/proposal


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SABC SCM &PP – 0001                                                              Page 40 of 46
              Pt = price of bid/proposal under consideration

              Ap = percentage allocated for price

18.10     CALCULATION OF COMBINED SCORE FOR FUNCTIONALITY AND
          PRICE

18.10.1   The percentages obtained for functionality shall be added to the percentage
          obtained for price to obtain a score out of 100

18.11     CALCULATION OF POINTS FOR B-BBEE PREFERENCE AND THE
          FINAL SCORE

18.11.1   The SABC shall be prepared to pay a premium to promote B-BBEE suppliers.
          The combined score for each level contributor shall be multiplied by the under-
          mentioned conversion factors to determine the ultimate score:

18.11.2   For contracts up to the value of R2 million the following conversion factors will
          apply till 31 March 2008:

             Level 6 contributor – Conversion factor of 1
             Level 5 contributor – Conversion factor of 1.03
             Level 4 contributor – Conversion factor of 1.06
             Level 3 contributor – Conversion factor of 1.09
             Level 2 contributor – Conversion factor of 1.12
             Level 1 contributor – Conversion factor of 1.15

18.11.3   For contracts above the value of R2 million the following conversion factors will
          apply till 31 March 2008:

             Level 6 contributor – Conversion factor of 1
             Level 5 contributor – Conversion factor of 1.02
             Level 4 contributor – Conversion factor of 1.04
             Level 3 contributor – Conversion factor of 1.06
             Level 2 contributor – Conversion factor of 1.08
             Level 1 contributor – Conversion factor of 1.1

18.11.4   For contracts to the value of R2 million the following conversion factors will
          apply as from 1 April 2008:

             Level 5 contributor – Conversion factor of 1.03
             Level 4 contributor – Conversion factor of 1.06
             Level 3 contributor – Conversion factor of 1.09
             Level 2 contributor – Conversion factor of 1.12
             Level 1 contributor – Conversion factor of 1.15

18.11.5   For contracts above the value of R2 million the following conversion factors will
          apply as from 1 April 2008:

           Level 5 contributor – Conversion factor of 1.02

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SABC SCM &PP – 0001                                                              Page 41 of 46
             Level 4 contributor – Conversion factor of 1.04
             Level 3 contributor – Conversion factor of 1.06
             Level 2 contributor – Conversion factor of 1.08
             Level 1 contributor – Conversion factor of 1.1

18.11.6   The final scores will be ranked in order of the highest to the lowest and unless
          justifiable grounds exist, the contract should be awarded to the highest scorer.

18.12     EQUAL OFFERS

18.12.1   When offers are equal in all respects on a comparative basis, thus scoring
          equal total points after the price, functionality and B-BBEE scores have been
          totalled, the successful supplier must be the one qualifying for the highest B-
          BBEE conversion factor.

18.12.2   Should two or more offers still be equal in all respects, the award shall be
          decided by the supplier with the lowest price.

18.13     NEW AND UNPROVEN PRODUCTS

18.13.1   A bid may not be rejected summarily simply because the bidder or the product
          which he offers is unknown.

18.14     DEVIATIONS FROM SPECIFICATIONS

18.14.1   Quotations/bids with acceptable deviations from specification may be
          recommended for acceptance, provided that the competitiveness of another
          supplier is not adversely affected.

18.15     ALTERNATIVE OFFERS AND IMPROVEMENT ON SPECIFICATION

18.15.1   Regardless of whether the bidder also submits offers conforming strictly to
          specification, alternative offers may be considered and accepted provided that
          the other bidders are not prejudiced.

18.15.2   A quotation/bid received which offers an improvement on the specification may
          be accepted provided that the other bidders are not prejudiced.

18.16     SUBCONTRACTING AND JOINT VENTURES

18.16.1   It is incumbent upon the SABC to take care that subcontractors and partners in
          consortia/joint ventures are engaged in fair and reasonable conditions of
          contract.

18.16.2   Should all parties to the consortium/joint venture not be Level 1 to 6
          contributors, then the non-complying parties may not, in total, contribute more
          than 30% to the assignment.

18.16.3   Care must be taken to ensure that the Level 1 to 6 contributors are not being
          used to front for non-compliant contributors, and that the consortium/joint
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SABC SCM &PP – 0001                                                              Page 42 of 46
          venture benefits the B-BBEE enterprises from a skills and technology
          perspective while sharing in the decision-making, risk and profit sharing
          commensurate with its shareholding of the consortium/joint venture.

18.17     CLEARANCE OF BIDDERS/PERSONS PRIOR TO THE AWARD OF
          A CONTRACT

18.17.1   RESTRICTED PERSONS

18.17.1.1 The procurement function should ensure that the supplier‟s name (including
          the name of the company, name of any director or partner) does not appear on
          the List of Restricted bidders/persons or on the Register for Tender Defaulters
          in terms of the Prevention and Combating of Corrupt Activities Act or that the
          person/company has not been restricted in terms of the SABC‟s restriction
          policy.

18.17.2   NATIONAL INDUSTRIAL PARTICIPATION PROGRAMME

18.17.2.1 The SABC shall obtain clearance for a recommended bidder from the
          Department of Trade and Industry in respect to contracts which are subject to
          the National Industrial Participation Programme.

18.18     NEGOTIATIONS

18.18.1   This is when the SABC, under certain limited circumstances, negotiates with
          one or more organizations of its choice following a process of pre- qualification

18.18.2   The GCEO or Head of Procurement shall approve direct negotiations with
          suppliers.

18.18.3   Without prior approval, no negotiations may be conducted with suppliers
          regarding any aspect which might in any way affect the prices i.e. that may
          change the order in which quotes/bids will be ranked.


19        AWARD AND CONTRACTUAL COMMITMENTS
19.1      GENERAL

19.1.1    The Evaluation Committee and the Adjudication Committee for a specific
          requirement shall be composed of different members to ensure that an
          independent and transparent review of the evaluation is undertaken.

19.1.2    Once the contract has been awarded, both the successful bidders will be
          notified. Unsuccessful bidders may obtain through written application to the
          SABC.

19.2      CANCELLATION OF QUOTATIONS/BIDS


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SABC SCM &PP – 0001                                                              Page 43 of 46
19.2.1    Should no acceptable quotations/bids be received; approval to cancel the
          quotation/bid must be obtained, providing reasons there of.

19.2.2    Where quotations/bids are to be cancelled all bidders must be informed in
          writing of the cancellation.

19.3      CONCLUSION OF CONTRACT

19.3.1    The acceptance of a successful bid or quote must be in writing; and there must
          be a mechanism of proof of delivery, at which time the contractual relationship
          is established.

19.3.2    The notification must be followed up with a written agreement in the required
          format and signed by both parties to the contract.

19.3.3    Legal copies shall be kept in a safe place for judicial reference.


20        ACCESS TO BIDDING INFORMATION

20.1      GENERAL

20.1.1    All bidding information remains strictly confidential and shall not be disclosed
          to any other bidder. The release of information shall be done in line with the
          relevant legislation.

20.1.2    The successful bidder shall be notified in writing of the acceptance of their bid
          within the original validity period or timely extended validity period of the bid.

20.1.3    On written request, any bidder shall be provided with the reasons why his own
          bid was unsuccessful.

20.1.4    Bids are not available for perusal by the public. When divulging information, a
          balance shall be stricken between one party‟s right to access of information
          and the right to confidentiality of the other party.

20.1.5    Where no bid has been accepted, particulars of the bids received shall not be
          made public.

20.1.6    The SABC can withhold information if the release or publication of the
          information:

20.1.7    Will impede law enforcement; or

20.1.8    Will be contrary to the public interest; or

20.1.9    Will harm the legitimate interests of the SABC.

20.1.10   Will hinder fair competition between providers by revealing any proprietary
          information of any bidder.
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20.1.11   A complaint/appeal received before an award is made, must be dealt with to
          the satisfaction of the GCEO. The process followed is to be beyond reproach
          and responded to in writing before a final award is made to minimise the risk
          for the SABC.

20.1.12   A complaint/appeal received after an award has been made, must be received
          within 10 days of the decision made known and must be responded to swiftly
          in writing and dealt with to the satisfaction of the GCEO.


21        MANAGEMENT OF CONTRACTS CONCLUDED
21.1      GENERAL

21.1.1    The management of contracts as it pertains to the procurement function shall
          be a shared responsibility in the SABC.

21.1.2    The SABC Legal will be responsible to assist in drafting of non-standard
          contracts and the initial standard contract template, give legal advice on
          contracts and vetting of all contracts before awarding the contract and
          safekeeping of the original contract document.

21.1.3    The SCM Unit is responsible for contract negotiations, renewals, extensions,
          termination and holding of a copy of the contract as well as dealing with
          unsatisfactory performance in conjunction with SABC Legal and the business
          unit.

21.1.4    The business unit must ensure that the contractor performs according to the
          stipulations of the contract in delivering the goods or services on time, in the
          correct quantity and to the required standard..

22        PAYMENT

22.1      GENERAL

22.1.1    Under normal circumstances payment is made for supplies in accordance with
          the contract conditions only after they have been delivered and, where
          applicable, installed, in good working conditions.

22.1.2    Where a supplier requires an advance payment or a progress payment and
          this is not a contract conditions, payment may be made only with prior
          approval of Group Chief Executive Officer or the delegate.
22.1.3    All invoices received by the SABC should have an associated purchase order
          number or Framework Procurement Agreement / Blanket Purchase Order
          number on it.

22.1.4    QSEs and EMEs shall qualify for earlier payments (7 days or 15 days after
          submission of all relevant documentation).

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22.1.5    Transfer of payments may be considered in cases where a contractor
          authorised that monies due to the contractor, be paid to another person or
          organisation.


23        RECORDING AND REPORTING OF INFORMATION

23.1      GENERAL
23.1.1    The SABC shall implement an information gathering, recording and reporting
          mechanism to facilitate the recording and reporting of supply chain activities
          and to promote good governance.

23.1.2    The Head of Procurement or delegate shall submit to the Group EXCO such
          procurement information as they may require and in such format and at such
          intervals as specified. Such information shall at least include:

23.1.3    Total procurement spends.

23.1.4    Percentage of total spends directed towards BBBEE.

23.1.5    Information regarding deviation processes and the reason therefore.

23.1.6    Process disputes.

23.1.7    Instances of alleged and proven fraud or corruption or fronting.

23.1.8    The SABC shall keep records for the prescribed period as required in relevant
          legislation.

24        PERFORMANCE MEASUREMENT OF PROCUREMENT

24.1      GENERAL

24.1.1    The Group Chief Executive Officer shall measure and monitor the procurement
          policy and processes through a performance measurement system to
          ascertain whether objectives and targets set have been achieved.

25        APPLICABLE DOCUMENTS
25.1      Procurement Procedure Manual
25.2      SABC Procurement Strategy
25.3      Delegation of Authority Framework
25.4      Disciplinary Codes




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