News24 reported in July that out of over 100 cases of fraud that were being investigated in Mpumalanga, at premier Thabang Makwetla's office, the majority of them were a result of procurement irregularities.
This is according to Rivaj Parbhu, business development executive of contract management software company Realyst.
In addition, he states that Malcolm Simpson, deputy director-general at the Treasury's World Cup unit, says procurements risks resulting from poor tender preparation could also cause a delay in the construction of the stadiums for the 2010 Soccer World Cup, and that government could face litigation.
Parbhu says in 2004, the National Treasury released a supply chain framework document that directly addresses "deficiencies in current practice related to procurement, contract management, inventory and asset control, and obsolescence planning".
The Public Finance Management Act of 1999 directly allocates the responsibility and accountability for the contractual obligations of publicly funded organisations to accounting officers, and spells out their duties in basic terms in Section 38 (f) of the Act, she adds.
Despite these and other rigorous procurement and supply chain management polices put in place by government to encourage fairness, promote BEE, and ensure the competence and delivery capability of its suppliers, little seems to be done, claims Parbhu. This is due to the difficulty of putting these policies and systems into practice, thus allowing malpractices to occur, he says.
"Adoption of contract management initiatives has been significantly slower in the public sector than in the private sector. The private sector recognises that management of procurement contracts is just as critical as obtaining the contract in the first place," asserts Parbhu.
He continues: "The increasing use of contract management systems has resulted in private companies enjoying a variety of benefits specific to procurement. These include automated management of the different stages of the tender process; a central repository of all contracts and related documents; tools to timeously identify and manage supplier's service levels, checks and balances to ensure that valid contract prices are used; and a significant reduction in the administrative burden by moving away from paper-based systems."
South Africa is in the fortunate position of being able to access world-class contract management tools developed by local organisations, explains Parbhu, adding that the public sector can easily leverage off these.
The business case for contract management within the public sector is a compelling one and increased adoption would provide government with a powerful means to improve its service delivery, he concludes.
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