In this regulation, unless the context indicates otherwise, a word or expression to which a meaning has been assigned in the Act, has the same meaning, and—
"institution"
means a department, constitutional institution or public entity listed in Schedule 3A and 3C of the Act; and
"official"
means a person in the employ of a department, constitutional institution or public entity listed in Schedule 3A and 3C of the Act.
| 16A.2.1 | This framework applies to all— |
| (b) | constitutional institutions; and |
| (c) | public entities listed in Schedules 3A and 3C to the Act. |
| 16A.3 | Supply chain management system |
| 16A.3.1 | The accounting officer or accounting authority of an institution to which these regulations apply must develop and implement an effective and efficient supply chain management system in his or her institution for— |
| (a) | the acquisition of goods and services; and |
| (b) | the disposal and letting of state assets, including the disposal of goods no longer required. |
| 16A.3.2 | A supply chain management system referred to in paragraph 16A.3.1 must— |
| (a) | be fair, equitable, transparent, competitive and cost effective; |
| (b) | be consistent with the Preferential Procurement Policy Framework Act, 2000 (Act No. 5 of 2000); |
| (c) | be consistent with the Broad Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003); and |
| (d) | provide for at least the following: – |
| (ii) | acquisition management; |
| (iii) | logistics management; |
| (vi) | regular assessment of supply chain performance. |
| 16A.4 | Establishment of supply chain management units |
| 16A.4.1 | The accounting officer or accounting authority must establish a separate supply chain management unit within the office of that institution’s chief financial officer, to implement the institution’s supply chain management system. |
| 16A.5 | Training of supply chain management officials |
| 16A.5.1 | The accounting officer or accounting authority must ensure that officials implementing the institution’s supply chain management system are trained and deployed in accordance with the requirements of the Framework for Minimum Training and Deployment issued by the National Treasury. |
| 16A.6 | Procurement of goods and services |
| 16A.6.1 | Procurement of goods and services, either by way of quotations or through a bidding process, must be within the threshold values as determined by the National Treasury. |
| 16A.6.2 | A supply chain management system must, in the case of procurement through a bidding process, provide for— |
| (a) | the adjudication of bids through a bid adjudication committee; |
| (b) | the establishment, composition and functioning of bid specification, evaluation and adjudication committees; |
| (c) | the selection of bid adjudication committee members; |
| (d) | bidding procedures; and |
| (e) | the approval of bid evaluation and/or adjudication committee recommendations. |
| 16A.6.3 | The accounting officer or accounting authority must ensure that— |
| (a) | bid documentation and the general conditions of a contract are in accordance with— |
| (i) | the instructions of the National Treasury; or |
| (ii) | the prescripts of the Construction Industry Development Board, in the case of a bid relating to the construction industry; |
| (b) | bid documentation include evaluation and adjudication criteria, including the criteria prescribed in terms of the Preferential Procurement Policy Framework Act, 2000 (Act No. 5 of 2000) and the Broad Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003); |
| (c) | bids are advertised in at least the Government Tender Bulletin for a minimum period of 21 days before closure, except in urgent cases when bids may be advertised for such shorter period as the accounting officer or accounting authority may determine; |
| (d) | awards are published in the Government Tender Bulletin and other media by means of which the bids were advertised; |
| (e) | contracts relating to information technology are prepared in accordance with the State Information Technology Act, 1998 (Act No. 88 of 1998), and any regulations made in terms of that Act; |
| (f) | Treasury Regulation 16 is complied with when goods or services are procured through public private partnerships or as part of a public private partnership; and |
| (g) | instructions issued by the National Treasury in respect of the appointment of consultants are complied with. |
| 16A.6.4 | If in a specific case it is impractical to invite competitive bids, the accounting officer or accounting authority may procure the required goods or services by other means, provided that the reasons for deviating from inviting competitive bids must be recorded and approved by the accounting officer or accounting authority. |
| 16A.6.5 | The accounting officer or accounting authority may opt to participate in transversal term contracts facilitated by the relevant treasury. Should the accounting officer or accounting authority opt to participate in a transversal contract facilitated by the relevant treasury, the accounting officer or accounting authority may not solicit bids for the same or similar product or service during the tenure of the transversal term contract. |
| 16A.6.6 | The accounting officer or accounting authority may, on behalf the department, constitutional institution or public entity, participate in any contract arranged by means of a competitive bidding process by any other organ of state, subject to the written approval of such organ of state and the relevant contractors. |
| 16A.7 | Disposal and letting of state assets |
| 16A.7.1 | Disposal of movable assets must be at market-related value or by way of price quotations, competitive bids or auction, whichever is most advantageous to the state, unless determined otherwise by the relevant treasury. |
| 16A.7.2 | Notwithstanding the provisions of paragraph 16A7.1, accounting officers and accounting authorities may transfer movable assets free of charge to other departments, constitutional institutions or public entities by means of formal vouchers. |
| 16A.7.3 | Any sale of immovable state property must be at market-related value, unless the relevant treasury approves otherwise. |
| 16A.7.4 | The letting of immovable state property (excluding state housing for officials and political office bearers) must be at market-related tariffs, unless the relevant treasury approves otherwise. No state property may be let free of charge without the prior approval of the relevant treasury. |
| 16A.7.5 | The accounting officer or accounting authority must review, at least annually when finalising the budget, all fees, charges, rates, tariffs or scales of fees or other charges relating to the letting of state property to ensure sound financial planning and management. |
| 16A.7.6 | The accounting officer or accounting authority must, when disposing of firearms, obtain the approval of the National Conventional Arms Control Committee for any sale or donation of firearms to any person or institution within or outside the Republic. |
| 16A.7.7 | The accounting officer or accounting authority must, when disposing of computer equipment, firstly approach any state institution involved in education and/or training to determine whether such an institution requires such equipment. In the event of the computer equipment being required by such a state institution, the accounting officer or accounting authority may transfer such equipment free of charge to the identified institution. |
| 16A.8 | Compliance with ethical standards |
| 16A.8.1 | All officials and other role players in a supply chain management system must comply with the highest ethical standards in order to promote— |
| (a) | mutual trust and respect; and |
| (b) | an environment where business can be conducted with integrity and in a fair and reasonable manner. |
| 16A.8.2 | The National Treasury’s Code of Conduct for Supply Chain Management Practitioners must be adhered to by all officials and other role players involved in supply chain management. |
| 16A.8.3 | A supply chain management official or other role player— |
| (a) | must recognise and disclose any conflict of interest that may arise; |
| (b) | must treat all suppliers and potential suppliers equitably; |
| (c) | may not use their position for private gain or to improperly benefit another person; |
| (d) | must ensure that they do not compromise the credibility or integrity of the supply chain management system through the acceptance of gifts or hospitality or any other act; |
| (e) | must be scrupulous in their use of public property; and |
| (f) | must assist accounting officers or accounting authorities in combating corruption and fraud in the supply chain management system. |
| 16A.8.4 | If a supply chain management official or other role player, or any close family member, partner or associate of such official or other role player, has any private or business interest in any contract to be awarded, that official or other role player must— |
| (a) | disclose that interest; and |
| (b) | withdraw from participating in any manner whatsoever in the process relating to that contract. |
| 16A.8.5 | An official in the supply chain management unit who becomes aware of a breach of or failure to comply with any aspect of the supply chain management system must immediately report the breach or failure to the accounting officer or accounting authority, in writing. |
16A.9 Avoiding abuse of supply chain management system
| 16A.9.1 | The accounting officer or accounting authority must— |
| (a) | take all reasonable steps to prevent abuse of the supply chain management system; |
| (b) | investigate any allegations against an official or other role player of corruption, improper conduct or failure to comply with the supply chain management system, and when justified— |
| (i) | take steps against such official or other role player and inform the relevant treasury of such steps; and |
| (ii) | report any conduct that may constitute an offence to the South African Police Service; |
| (c) | check the National Treasury’s database prior to awarding any contract to ensure that no recommended bidder, nor any of its directors, are listed as companies or persons prohibited from doing business with the public sector; |
| (d) | reject any bid from a supplier who fails to provide written proof from the South African Revenue Service that that supplier either has no outstanding tax obligations or has made arrangements to meet outstanding tax obligations; |
| (e) | reject a proposal for the award of a contract if the recommended bidder has committed a corrupt or fraudulent act in competing for the particular contract; or |
| (f) | cancel a contract awarded to a supplier of goods or services— |
| (i) | if the supplier committed any corrupt or fraudulent act during the bidding process or the execution of that contract; or |
| (ii) | if any official or other role player committed any corrupt or fraudulent act during the bidding process or the execution of that contract that benefited that supplier. |
| 16A.9.2 | The accounting officer or accounting authority— |
| (a) | may disregard the bid of any bidder if that bidder, or any of its directors— |
| (i) | have abused the institution’s supply chain management system |
| (ii) | have committed fraud or any other improper conduct in relation to such system; or |
| (iii) | have failed to perform on any previous contract; and |
| (b) | must inform the relevant treasury of any action taken in terms of paragraph (a). |
| 16A.9.3 | The National Treasury and each provincial treasury must establish a mechanism:- |
| (a) | to receive and consider complaints regarding alleged non-compliance with the prescribed minimum norms and standards; and |
| (b) | to make recommendations for remedial actions to be taken if non-compliance of any norms and standards is established, including recommendations of criminal steps to be taken in the case of corruption, fraud or other criminal offences. |
| 16A.10 | National Industrial Participation Program |
| 16A.10.1 | An accounting officer or accounting authority must obtain clearance for a recommended bidder from the Department of Trade and Industry, in respect of contracts which are subject to the National Industrial Participation Program of that Department. |
| 16A.11 | Reporting of supply chain management information |
| 16A.11.1 | The accounting officer or accounting authority must submit to the relevant treasury such supply chain management information as that treasury may require. |
| 16A.11.2 | A provincial treasury must submit to the National Treasury such supply chain management information as the National Treasury may require. |
| 16A.11.3 | Information referred to in paragraphs 16A11.1 and 16A11.2 must be submitted to the relevant treasury in such format and at such intervals as that treasury may require. |
| 16A.12 | Interim arrangements |
| 16A.12.1 | If a department lacks the capacity to fully comply with these regulations, that department may continue to make use of existing procurement processes through the relevant Tender Boards or other provincial procurement authorities (whichever applicable), subject to any instructions of the relevant treasury. |
| 16A.12.2 | If a constitutional institution or public entity lacks the capacity to fully comply with these regulations, that constitutional institution or public entity may, until 31 March 2005, continue to utilise their existing procurement procedures, provided that their existing procurement procedures are consistent with the contents of practice notes issued by the National Treasury. |
