An analysis of the tender process in national government in South Africa

Abstract

Tendering process is central to national government in South Africa. The goods and services bought by national government in South Africa represent a large amount of public money, and it is very important that national government put in place measure to manage how these goods and services are acquired. In the main government acquire goods and services through tender system and the focus of the study was tendering process in national government in South Africa. The amount of public resources that national government uses in the tendering process is huge and is approximately over 20% of GDP, which has direct implication for service delivery and job creation as well as redressing past discrimination by empowering designated groups of peoples to receive preference in tendering. South Africa is one of the countries with the highest level of corruption rate in the world, of which tender fraud and corruption play a major part. Considering that, the reform of tendering process in national government is therefore inevitable and has to take place. The primary objective of this study is to analyse national government tender system, and identify the tendering problems facing South African national departments. The study further made practical recommendations to National Government, National Treasury, and all the relevant stakeholders relating to the management of tendering process. Data from 355 questionnaires completed by participants, represented 45 national department was collected and analysed. This study found that national government is facing major challenges in managing of tendering process, and these challenges relates to implementation and adoption of the code of best practice. The most important conclusions drawn from the study are: * The department complies with all the above legislation and keep the rules as stipulated in the legislation; * There is a need to issue a single national legislative framework in terms of section 76(4)(c) of the PFMA to guide uniformity in tendering process; * The tendering legislations and its associated regulations are complex and may make it difficult to implement correctly; * The department follow all tendering process generic steps at all times; * The current evaluation system is not a good system and is biased towards the lowest price bidders; * The current tendering practices in government are outdated and inefficient; * Tender practitioners are not adequately trained in the application of the tender process and its associated regulations; * The departments did not keep a detailed and consistent documentation of all events of the whole tendering procedure at all times; * The current tendering practices do not conform to internationally accepted best practices; * The department’s tendering function is not carried out in a cost–effective way; and * The current tendering system is fair, encourages competition, and has integrity. Practical recommendations are suggested to ensure the effective management of tendering process in national government.