PROCUREMENT POLICY AND PROCEDURES 24 MAY 2013 PROCUREMENT

PROCUREMENT POLICY AND PROCEDURES 24 MAY 2013

PROCUREMENT POLICY

PRESENTATION CONTENT • Procurement Ethics; • Methods of Bids Solicitation; • Expression of Interest for Contractors; • Request for Proposals - Consultants; • OPEN Tender Process; • Adverts – newspapers, websites, i. Tenders, etc; • Issue of Tender Documents; • Compulsory Site Briefing Meetings; • SMME Participation and Involvement; • Lodging / Receiving of Tender documents;

PRESENTATION CONTENT (Cont. ) • Closing of Bids; • Evaluation of Bids and Scoring Process; • Appointment of Preferred Bidders; • Conclusion;

PROCUREMENT POLICY • CDC adheres to five Procurement Pillars: I. Fairness; II. Equitable; III. Transparency; IV. Competitiveness; and V. Value for Money • CDC Policy is aligned with: I. The Constitution Act No 106; II. PPPFA of 2011 III. BBBEE Act; IV. PFMA Act of 1999; V. CIDB Act 2000; and VI. National Treasury Regulations

PROCUREMENT ETHICS • Declaration of Interest and Management of Conflict of Interest; • Canvassing, Corrupt and Fraudulent Practices; • Confidentiality; • Staff Code of Conduct; • Code of Conduct – SP and Third Parties; • Always comply with PFMA, PPPFA, BBBEE, CIDB, National Treasury Regulations and Practice Notes etc; • In conducting CDC Procurement Process – Honesty, Integrity, and Opennes are integral and utmost important

METHODS OF BID SOLICITATION Procurement Approach 1. Closed Tender process 2. Open Tender Process 3. Expression of Interest 4. Request for Proposal Type of Assignment

CLOSED TENDER PROCESS • Services or Goods from R 500 k – R 1 m (Incl. VAT) • CDC Database must be utilised to source service providers • Procurement Plan Submissions must be prepared and approved by the Bid Specification Committee (BSC) • Supply Chain representative must always be involved in the process • Procurement Submissions must be prepared and the Procurement Committee (PC) shall approve the service provider;

OPEN TENDER PROCESS • Services or Goods in excess of R 1 m (90: 10); • Bids must be advertised in Public; • Full Procurement Process must be followed • Supply Chain representative must always be involved in the process • Procurement Plan Submissions must be submitted to Bid Specification Committee (BSC) prior advertising • Procurement Submissions must be submitted to Procurement Committee (PC) • See PROCUREMENT HANDBOOK

EXPRESSION OF INTEREST • Implemented for sourcing Contractors especially – repetitive projects such as Early Childhood Dev. Centres, ELSEN, etc; • The scope is not fully defined; • Creation of Pool of Preferred Contractors; • Mandatory Requirements are the guiding Principles; • Pre Qualified Contractors are given Tender Documents to Price; • Duration of a Service Provider in a pool is one to two years with option of one year extension (not more)

REQUESTS FOR PROPOSALS • Normally Implemented on Professional Consultants e. g Architects, Placement Agents, Auditors, etc; • The scope is defined and known; • Bidders may submit prices / fee – 90: 10; • Evaluation of bids is based on PRICE and BBBEE; • Minimum threshold may be defined on highly specialised contracts < 60%

OPEN TENDER PROCESS

TENDER OPPORTUNITIES (Adverts) • All tender opportunities are advertised – local and / national newspapers; • KNZ = ILANGA, ISOLEZWE and The Mercury (on Thursdays) • EC = The Herald and Daily Dispatch (on Monday or/and Friday); • National – Sunday Times; • CDC Website – www. coega. com/tenders; • CIDB - i. Tenders; • Government Tender Bulletin;

TENDER DOCUMENTS ISSUE • Tender documents must be collected BEFORE Briefing Meeting; • Ensure complete Document Issue Register; • NO CASH is accepted; • No documents are issued at Site Briefing Meetings

SITE BRIEFING MEETING • Procurement Manager will chair / lead the meeting; • Ensure Briefing Meetings are INFORMATIVE; • CDC will ensure there is Agenda, Attendance Register, Site Plans/ Presentations; • Consultants will present Scope of work / Technical requirement in detail • Contractors must send Technical Personnel; • Contractors must try locate the Site beforehand; • Once the meeting is closed – no signing of attendance registers.

SMME TARGET • CDC has set a Corporate Target of 35%SMME involvement on all Projects, • Communication to all bidders at Briefing Meetings, • SMME Target must be documented on Tender Documents • Consultants will identify SMME Packages in each Project; • Project Managers will assist in monitoring achieved thereof; • Monthly SMME achievements must be reported; • Breaking down BIG/MEGA Projects into smaller Projects

LODGING OF BID DOCUMENTS • Receiving bids – Bids must be submitted in sealed envelopes, – Complete Lodging Register (audit requirement); – To be deposited into CDC Tender Box, – Bids received by Telegram, fax or email will not be considered (unless stipulated in quotes), – Late bid submissions will not be accepted; – Bids are open in public and prices posted in the CDC Website;

CLOSING OF TENDERS • CDC Tenders CLOSE at our offices – Tender Box; • Closing Date, Venue and Time – confirm with Advert and Tender Document; • LATE Bids will not be accepted;

EVALUATION OF BIDS

SCM COMMITTEES 1. Bid Specification Committee 2. Bid Evaluation Committee 3. Bid Adjudication Committee

PROCUREMENT STRUCTURES CDC Committees Function / Responsibilities Composition Bid Specification Committee Review and approve Procurement Plans Append Bid doc/RFP/Eo. I, TGP specification, Advert, Declaration of Interest, etc SCM or Procurement Manager Legal Manager and one PC Members Project Manager (invitee) Must report to PC Chair Adjudicate bids submitted by bidders 1 Representative from SCM unit The PM consolidates and submits to the PC a report and recommendations regarding the award of the bids 2 Project Managers (either all from the same BU or one from a different BU) 1 external member / consultants Approves bids of values between *R 200, 000 to *R 5 m and forward them to EXMA for noting PC Terms of Reference and with two year membership appointed by the CEO (BSC) Bid Evaluation Committee (BEC) Procurement Committee (PC) EXMA The BOARD Recommend bids above *R 5 m to the EXMA Approve bids of over *R 5 m up to *R 100 m and notify the Board As per the EXMA Terms of Reference Recommend to the Board all bids in excess of *R 100 m Note all bids above *R 5 m and approve bids above *R 100 m As per the Board Terms of Reference

THREE STAGE EVALUATION APPROACH Stage 1 Responsiveness Stage • Mandatory Requirements Stage 2 Quantitative Stage • Price - formula • BBBEE – Certificates (SANAS Accredited) Stage 3 Qualitative Stage • Repeat Appointment • Non Performance • Spread of work • Risk Issues

ADJUDICATION OF BID SUBMISSIONS Element WEIGHTING / SCORES Professional Service Providers (including Building Contractors) 90: 10 80: 20 Price 90 80 Empowerment 10 20 Sub-total 100 100

ADJUDICATION OF BID SUBMISSIONS CONTRIBUTION LEVEL BBBEE Empowerment Scoring » 90: 10 80: 20 Level One Contributor 10 20 Level Two Contributor 9 18 Level Three Contributor 8 16 Level Four Contributor 5 10 Level Five Contributor 4 8 Level Six Contributor 3 6 Level Seven Contributor 2 4 Level Eight Contributor 1 2 Non Compliant Contributor 0 0

APPOINTMENT OF PREFERRED SP • Letters of Regrets will be sent out to unsuccessful SP; • Letter of appointment will be sent to successful Bidder; • Form of Offer and Acceptance is signed off; • Maximum of two active projects per contractor • Tender Queries = KZNTenders@coega. co. za

CONCLUSION • Supply Chain Unit will ensure at all times that Procurement Process and Procedures are in FULL compliance with Legislations; • Procurement Manager will endeavour to maintain high integrity, procurement ethics and fairness when awarding bids; • CDC is fully committed in ensuring that Socio Economic Imperatives, such as Job Creation, SMME involvement, Health and Safety, are achieved; • Any queries relating to the Bids must be addressed with the Procurement Manager or Supply Chain Manager;

Thank You