| (1) | The supply chain management policy of a municipality or municipal entity must be fair, equitable, transparent, competitive and cost-effective and comply with a prescribed regulatory framework for municipal supply chain management, which must cover at least the following: |
| (a) | The range of supply chain management processes that municipalities and municipal entities may use, including tenders, quotations, auctions and other types of competitive bidding; |
| (b) | when a municipality or municipal entity may or must use a particular type of process; |
| (c) | procedures and mechanisms for each type of process; |
| (d) | procedures and mechanisms for more flexible processes where the value of a contract is below a prescribed amount; |
| (e) | open and transparent pre-qualification processes for tenders or other bids; |
| (f) | competitive bidding processes in which only pre-qualified persons may participate; |
| (g) | bid documentation, advertising of and invitations for contracts; |
| (h) | procedures and mechanisms for— |
| (i) | the opening, registering and recording of bids in the presence of interested persons; |
| (ii) | the evaluation of bids to ensure best value for money; |
| (iii) | negotiating the final terms of contracts; and |
| (iv) | the approval of bids; |
| (i) | screening processes and security clearances for prospective contractors on tenders or other bids above a prescribed value; |
| (j) | compulsory disclosure of any conflicts of interests prospective contractors may have in specific tenders and the exclusion of such prospective contractors from those tenders or bids; |
| (k) | participation in the supply chain management system of persons who are not officials of the municipality or municipal entity, subject to section 117; |
| (l) | the barring of persons from participating in tendering or other bidding processes, including persons— |
| (i) | who were convicted for fraud or corruption during the past five years; |
| (ii) | who wilfully neglected, reneged on or failed to comply with a government contract during the past five years; |
| (iii) | whose tax matters are not cleared by South African Revenue Service; |
| (i) | combating fraud, corruption, favouritism and unfair and irregular practices in municipal supply chain management: and |
| (ii) | promoting ethics of officials and other role players involved in municipal supply chain management; |
| (n) | the invalidation of recommendations or decisions that were unlawfully or improperly made, taken or influenced, including recommendations or decisions that were made, taken or in any way influenced by— |
| (i) | councillors in contravention of item 5 or 6 of the Code of Conduct for Councillors set out in Schedule 1 to the Municipal Systems Act; or |
| (ii) | municipal officials in contravention of item 4 or 5 of the Code of Conduct for Municipal Staff Members set out in Schedule 2 to that Act; |
| (o) | the procurement of goods and services by municipalities or municipal entities through contracts procured by other organs of state; |
| (p) | contract management and dispute settling procedures; and |
| (q) | the delegation of municipal supply chain management powers and duties, including to officials. |
(2) The regulatory framework for municipal supply chain management must be fair, equitable, transparent, competitive and cost-effective.
