Local Government: Municipal Finance Management Act, 2003 (Act No. 56 of 2003)Chapter 11 : Goods and ServicesPart 1 : Supply chain management116. Contracts and contract management |
| (1) | A contract or agreement procured through the supply chain management system of a municipality or municipal entity must— |
| (a) | be in writing; |
| (b) | stipulate the terms and conditions of the contract or agreement, which must include provisions providing for— |
| (i) | the termination of the contract or agreement in the case of non- or under-performance; |
| (ii) | dispute resolution mechanisms to settle disputes between the parties; |
| (iii) | a periodic review of the contract or agreement once every three years in the case of a contract or agreement for longer than three years; and |
| (iv) | any other matters that may be prescribed. |
| (2) | The accounting officer of a municipality or municipal entity must— |
| (a) | take all reasonable steps to ensure that a contract or agreement procured through the supply chain management policy of the municipality or municipal entity is properly enforced; |
| (b) | monitor on a monthly basis the performance of the contractor under the contract or agreement; |
| (c) | establish capacity in the administration of the municipality or municipal entity— |
| (i) | to assist the accounting officer in carrying out the duties set out in paragraphs (a) and (b); and |
| (ii) | to oversee the day-to-day management of the contract or agreement; and |
| (d) | regularly report to the council of the municipality or the board of directors of the entity, as may be appropriate, on the management of the contract or agreement and the performance of the contractor. |
| (3) | A contract or agreement procured through the supply chain management policy of the municipality or municipal entity may be amended by the parties, but only after— |
| (a) | the reasons for the proposed amendment have been tabled in the council of the municipality or, in the case of a municipal entity, in the council of its parent municipality; and |
| (b) | the local community— |
| (i) | has been given reasonable notice of the intention to amend the contract or agreement; and |
| (ii) | has been invited to submit representations to the municipality or municipal entity. |