Transcript Smart Procurement: Digital integration and accessibility driving

Smart Procurement: Digital integration
and accessibility driving change
Hon Mmamoloko Kubayi, Chairperson of Portfolio
Committee on Telecommunications and Postal Services
Presentation Outline
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Presentation Outline
Introduction
Constitution of the Republic of South Africa
Key Legislation
Context of ICT Impacts and Challenges
Using ICT to Fight Maladministration & Corruption
The need for Smart Procurement Reforms
World trade Organisation (WTO) Regulations on Procurement
National Economic Policy Framework
– National Development Plan
– National Growth Path and Point Plan
– International Expenditure on IT
– Critical Questions for Conference
– Conclusion
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Introduction: Legislation & Policy on
Smart Procurement
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The procurement reform processes are embedded in Section 112 of the Municipal Financial Management
Act No 56 of 2003 (MFMA);
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Section 76(4) (C) of the Public Finance Management Act No 1 of 1999 (PFMA) and the Preferential
Procurement Policy Framework Act No 5 of 2000 (PPPFA).
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In 2001, the National Treasury completed a Joint Country Assessment Review (CPAR) with the World Bank
to assess procurement practices throughout the public sector. It found deficiencies in the current
practices relating to governance, interpretation and implementation of the PPPFA and its associated
regulations (National Treasury, 2005
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National Economic Frameworks
The National Development Plan and National Growth Path identify the knowledge economy as one of the
major job creation drivers.
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A knowledge economy is an economy that is underpinned by universally available and accessible high
speed broadband services providing access to the creation and consumption of a wide range of converged
services required for effective economic and social participation.
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Context of ICT Impact & Challenges
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Citizens must have access to public information in order for democracy to function.
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ICT can support democracy and human rights by enabling and expanding citizens’ social mobilization.
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There are however, still significant challenges in realising the potential of new technologies due to issues
of access.
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Whilst the Internet provides 4 billion people with unprecedented access to information but the vast
majority of the world’s citizens, South Africa included have no or limited access to the Internet.
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Meaning whilst South Africa’s technological community is growing, lack of access to ICT due to costs and
other inhibiting factors is still a major obstacle to the use of technology by government
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Research by Åke Grönlund & various authors have found that ICT interventions need to be launched
together with real administrative reforms in order to be successful. ICT can decrease corruption by
increasing transparency, introduce systemic hurdles, as well as increase the risk of detection.
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Using Technology to Fight Corruption
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Corruption is a function of both the opportunity to request/receive bribes and the risk of detection.
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Corruption exists in all sectors of society, it damages a country’s development by undermining faith in
public institutions, falls disproportionately on the poorer members of society and hinders them from
accessing scarce services.
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Transparency International (TI), the most cited source in corruption discussions, defines corruption as the
abuse of entrusted power by political leaders or bureaucracy for personal gain or specific group interest.
The United Nations (UN) and the World Bank, use either that definition or very similar ones.
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ICT has been identified as a viable tool for diminishing corruption by enhancing transparency and
accountability of government administration. For example, the World Bank defines electronic government
(e-Government) as “the use of ICT to improve the efficiency, effectiveness, transparency and
accountability of government”
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World Bank argues that “E-Government helps to increase the transparency of decision-making processes
by making information accessible publishing government debates and minutes, budgets and expenditure
statements, outcomes and rationales for key decisions, and in some cases, allowing the on-line tracking of
applications on the web by the public and press” (World Bank, 2010a).
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Continue..2
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ICT is not a magic bullet when it comes to ensuring greater transparency and less corruption,
however, it has a significant role to play in important areas:
– ICT can improve transparency in the public sector by increasing the coordination;
– ICT facilitates the collection of digital footprints and complete audit trail which increase
the opportunity to hold individuals accountable and ultimately increase the possibility to
detect corrupt practices.
– ICT can facilitate information sharing and social mobilisation and ultimately provide
digital platforms where citizens can report incidents anonymously.
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Moreover, “anti-corruption” software tools can track various events in electronic systems
that signal not only illegitimate actions that have already taken place but also proactively
detect suspicious behaviour before any crime has been committed.
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This may serve as a real deterrent as well as a monitoring tool. Such systems can, to some
extent, assist in tracking anomalies in operations, in observing systematic features of
customers’ reporting about errors or misuse, and in social media analysis (Gilliatt, 2007).
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Constitution & Need for Smart
Procurement
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The Bill of Rights in the Constitution is the cornerstone of South Africa’s democracy.
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Section 16(1)(a) and (b) of the Bill of Rights guarantees individual rights to access to information, the freedom to
receive or impart information or ideas (Constitution of Republic of South Africa, Act No.108 of 1996).
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The right to freedom of expression has been interpreted to mean not only the right to speak and the right to hear
speech but also the right to have access to the means by which to communicate (Thornton, L.2006).
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Procurement is central to the government service delivery system, and promotes aims which are, secondary to the
primary aim of procurement such as using procurement to promote social, industrial or environmental policies
(Cane, 2004).
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Prior to 1994, public procurement in South Africa was geared towards large and established contractors.
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Since 1994, South Africa has enjoyed unprecedented social and infrastructural programmes. Yet, some citizens are
feeling increasingly bitter towards over issues that include a lack of perceived quality of governance, service
delivery failure, fraud and corruption in some spheres of the economy
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However, public procurement in South Africa has been granted constitutional status and is recognised as a means
of addressing past discriminatory policies and practices (Bolton, 2006: 193).
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Constitution & Need for Smart
Procurement….
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Reforms in public procurement in RSA were initiated to promote the principles of good governance.
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The SCM system was adopted in 2003 and is used as a policy tool due to the discriminatory and
unfair practices during apartheid, however, there is a need for Smart Procurement
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The Smart Procurement as a strategic tool, will address the are predicaments in South African
public procurement practices, for example non-compliance with procurement and SCM-related
legislation and policies as well as tender irregularities (Smart Procurement, 2011).
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Taxpayers are fleeced of R millions in ways that contravened laws and regulations (Smart
Procurement, 2011).
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Parliament’s Public Service Commission Committee indicates that a total of 7 766 corruption cases
had been reported through the National Anti-Corruption Hotline since its inception in September
2004
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The Auditor General of South Africa specifically highlights weaknesses in SCM, controls over IT,
human resource management, and capital assets and performance reporting.
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Constitution & Need for Smart
Procurement….3
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There is an urgent need to rethink innovative ways of curbing corruption and some other administrative
malpractices within government.
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To fight the scourge of maladministration, mismanagement of finances, fraud and corruption, government
need Smart procurement which is underway.
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We note the following achievements by government toward full implementation of Smart Procurement:
– Tender e-portal has been established by SITA under the guidance of National Treasury;
– The Office of the Chief Procurement Officer is now fully functional; and
– The Central Database is now handled by the National Treasury, which reduces the burden for
entrepreneurs having to register their businesses in all the 3 spheres of government
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WTO/GPA REGULATION
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The WTO’s Agreement on Government Procurement (GPA) regulates the procurement policies and
practice of several WTO members. This international agreement is based on the principles of nondiscrimination and free trade.
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The United Kingdom’s strategy for innovative procurement
Innovative procurement is explicitly identified as an opportunity to promote innovation in that country
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International IT Expenditure
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Governments’ use of ICT is increasing as citizens are invited to interact with public administrations via ICTenabled structures
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The public procurement of using ICT is important for a number of reasons. Public administrations are a
large consumer of ICT, and via their procurement power can have significant influence on innovation and
competitiveness in the ICT market
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The procurement of ICT by public administrations also represents a significant source of the expenditure
of public funds. For example, it was estimated that total EU government expenditure reached €94 billion in
2007.
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Estimates of IT spending in the United Kingdom public sector in 2010, (estimated as the highest spender in
the EU with 23 per cent of EU IT expenditure) are approximately €18 billion per year.
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These factors all contribute to the importance of public bodies’ ability to procure ICT in an efficient and
responsible manner and makes it cost effective for citizens to interact with and benefit from eGovernment.
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ICASA has published the State of ICT Report indicating a millions that government pay in this regard
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Critical Questions to be Answered
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How can Smart Procurement Assist in rebuilding Confidence on Society: Clean
Tender process?
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How can we ensure that SMMEs access opportunities easily and can afford to bid?
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What does transparency, participatory & social accountable mean in our
procurement process
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Conclusion
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In the words of Andersen, (2009), ‘the more e-Government is better; the more
services online in a country, the less corruption
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ICT has a greater positive effect than the traditional anti-corruption factors
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On comparing e-government and traditional government: the overall balance
is positive, ICT investment in e-Government pays off in terms of reduced
corruption.
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THANK YOU
Hon Mmamoloko Kubayi, Chairperson of Portfolio
Committee on Telecommunications and Postal Services