Municipalities in South Africa are increasingly outsourcing municipal services, including basic municipal services such as water and sanitation services and refuse collection and disposal. The Constitution places onerous duties on municipalities to respect and promote human rights in the exercise of the powers and the performance of their functions. These duties are particularly prevalent when a municipality is deciding on the optimal service delivery mechanism for basic municipal services. It is thus crucial for the policy and legislative environment regarding municipal outsourcing to be firm and clear and for the municipality to ensure satisfactory implementation of outsourcing projects, including contract management. This thesis examined the policy and legislative framework governing municipal outsourcing and described the general features of a range of current South African outsourcing contracts. It also questioned whether the policy and legislative framework are consistent in their objectives and assessed how these objectives are carried through and translated into the contract drafting and implementation phases of outsourcing.

Thesis (MPA.) --University of Limpopo, 2005 / Refer to document

Municipalities in South Africa are increasingly outsourcing municipal services, including basic municipal services such as water and sanitation services and refuse collection and disposal. The Constitution places onerous duties on municipalities to respect and promote human rights in the exercise of the powers and the performance of their functions. These duties are particularly prevalent when a municipality is deciding on the optimal service delivery mechanism for basic municipal services. It is thus crucial for the policy and legislative environment regarding municipal outsourcing to be firm and clear and for the municipality to ensure satisfactory implementation of outsourcing projects, including contract management. This thesis examined the policy and legislative framework governing municipal outsourcing and described the general features of a range of current South African outsourcing contracts. It also questioned whether the policy and legislative framework are consistent in their objectives and assessed how these objectives are carried through and translated into the contract drafting and implementation phases of outsourcing.

The state of the Tendering Process in South African Government Institutions has become an area of concern in recent years with issues related to transparency, governance and rigid retrospective procedures being cited as impediments to efficiency. In tum, Knowledge Management (KM) and its ability to be applied to all types of organisations to increase efficiency has been popularised extensively. An analysis of KM literature suggested that the principles of KM may be used to increase efficiency and create competitive advantage. This study attempted to identify whether the benefits gained by other organisations through the application of Knowledge Management principles, could be applied to the Tendering Process in South African Government Institutions. The study sought to identify how Knowledge Value Chain by Wang and Ahmed (2005) may be leveraged to create an enhanced Tendering Process. The study then reviewed the Tendering Processes conducted in Australia, United States of America, Malaysia and South Africa and sought to identify the common steps in a tendering process in order to construct a standard tendering process. The Knowledge Value Chain was then applied to this process to create a standard tendering process enhanced by Knowledge Management Principles. The model was compared to the processes currently conducted in two Government institutions and two parastals. The findings indicated that the model is well suited for Government Organisations and would assist in the creation of greater transparency, however the practical implementation of the model is yet unlikely as the model suggest electronic access to information, and the process in South African Government Institutions is predominately paper-based.

Thesis (MBA (Business Management))--Stellenbosch University, 2008. / ENGLISH ABSTRACT: This study report concerns service delivery issues at municipal level which have emerged as areas of critical concern as far as they affect consumers of municipal services, interest groups and government as a whole. Background to investigation. The need to investigate the service delivery challenges at municipal level arose out of multiple newspaper reports reflecting on lack of satisfaction from end-users and authorities regarding quality of delivery. Organizations such as South African Local Government Association (SALGA) and South African National Civic Organization have both commissioned assessment of municipal service delivery performances, and the reports drafted thereof were both critical and unimpressive. Based on these reports, the author recognized the need to investigate the reasons for poor service delivery and to test the idea of adopting outsourcing as a complementary mechanism to the delivery of services that are currently being employed. Procedure used. The information gathering for this investigation was done by means of structured interviews with municipal managers and senior officials in the administration. Provinces which were covered in the study include Limpopo, Gauteng, and North West. Although it was desirable to include more provinces in the study, it was however not feasible owing to limited resources available. Related literature was examined to further enhance insight in the subject and also to search for added potential solutions to the service delivery problem. Results of investigation. The findings reveal that primary barriers to quality service delivery are lack of sufficient municipal capacity; shortage of skilled workers; budgetary constraints; lack of effective management systems to ensure that, when a service is sourced from outside, competent service providers are appointed and their performance satisfy and exceed expectation and requirements. The root causes to these service delivery challenges are, among other things, a consequence of economic development which stimulates demand for skilled workers in the private sectors, and limited resources in the coffers of government. To compound the challenges, municipalities are unable to attract, develop and retain the quantities and qualities of skilled workers they need, owing to the uncompetitive pay packages they offer. Literature has revealed that legislature, in the form of Municipal Systems Act, make provision for municipalities to explore service delivery mechanisms in order to supplement internal means (Municipal Systems Act, 32 of 2000). Conclusion. From the results and findings the following conclusions can be drawn: Owing to the present demand for service delivery and the inability of municipalities to build sufficient internal capacity, alternative mechanisms such as outsourcing, must be explored and employed. In addition, there is, however, a great need for management systems and structures to be established or upgraded to ensure that mileage from external service providers is maximized. Recommendation. Following the results of the investigation and the conclusion made, the following actions can be recommended: • Assess service delivery capabilities and identify gaps. • Establish service needs and requirements that can be sourced externally. • Set up robust management systems and support structures to ensure that outsourcing initiatives are guaranteed to be successful. / AFRIKAANSE OPSOMMING: Hierdie studieverslag het betrekking op munisipale diensleweringskwessies - 'n gebied wat sorgwekkende afmetings aanneem in die opsig dat verbruikers van munisipale dienste, belangegroepe en die regering as 'n geheel daardeur geraak word. Agtergrond van die ondersoek. Die behoefte aan 'n ondersoek na die uitdagings ten opsigte van dienslewering op munisipale vlak spruit uit verskeie koerantberigte wat die gebrek aan tevredenheid van eindgebruikers en owerhede aangaande die gehalte van dienslewering reflekteer. Organisasies soos die Suid-Afrikaanse Vereniging vir Plaaslike Regerings (SALGA) en die South African National Civic Organisation het beide die assessering van munisipale diensleweringsprestasies gelas. Die verslae wat hierna opgestel is, was krities en onindrukwekkend. Die outeur het, gebaseer op hierdie verslae, twee behoeftes geeien: die behoefte aan 'n ondersoek na die redes vir die swak diensverskaffing geeien, en die behoefte aan die uitkontraktering, soos wat tans aangewend word, as 'n aanvullende meganisme tot dienslewering. Die prosedure wat gevolg is. Die insameling van inligting vir hierdie ondersoek is gedoen deur gestruktureerde onderhoude met munisipale bestuurders en senior amptenare in die administrasie. Provinsies wat by die ondersoek betrek is, is Limpopo, Gauteng en Noordwes. Alhoewel dit wenslik is om meer provinsies in te sluit, was dit weens beperkte beskikbaarheid van hulpbronne nie uitvoerbaar nie. Verwante literatuur is geraadpleeg om verdere insig in die onderwerp te verkry en ook om bykomende moontlike oplossings te vind vir die probleem van dienslewering. Resultaat van die ondersoek. Die bevindinge dui daarop dat die primere struikelblokke in die pad van gehalte dienslewering die volgende is: gebrek aan munisipale bekwaamheid, tekort aan geskoolde werkers, beperkte begrotings, en 'n gebrek aan effektiewe bestuursisteme wat kan verseker dat, indien 'n diens uitgekontrakteer word, bekwame diensverskaffers aangestel word en dat hulle werksverrigting bevredigend is en verwagtinge en vereistes oortref. Die grondoorsaak vir hierdie uitdagings in dienslewering is o.a. die gevolg van ekonomiese ontwikkeling wat die aanvraag na geskoolde werkers in die privaatsektor stimuleer en hulpbronne in die staatskas beperk. Wat die uitdaging verder vergroot, is dat munisipaliteite, as gevolg van die onkompelerende besoldigingspakkette wal hulle aanbied, nie in staat is om die kwantiteit of kwaliteit geskoolde werkers wat hulle benodig te trek, ontwikkel of te behou nie. Literatuur het aan die lig gebring dat wetgewing, in die vorm van die Wet op Munisipale Rade, voorsiening daarvoor maak dat munisipaliteite diensverskaffingsmeganismes ondersoek ten einde interne vermoens aan te vul. Gevolgtrekking. Die volgende gevolgtrekkings kan afgelei word uit die resultate en bevindinge van die ondersoek: Te wyte aan die huidige aanvraag vir dienslewering en die onvermoe van munisipaliteite om voldoende interne bekwaamheid op te bou moet alternatiewe meganismes soos uitkontraktering ondersoek en aangewend word. Daar is egter ook 'n dringende behoefte dat bestuursisteme gevestig of opgegradeer word ten einde te verseker dat maksimale insette verkry word van eksterne diensverskaffers. Aanbevelings. Die volgende optrede word aanbeveel na aanleiding van die uitkoms van die ondersoek en die gevolgtrekking waartoe gekom is: • Assesseer die geskiktheid van dienslewering en identifiseer die leemtes. • Stel vas watter diensbehoeftes en -vereistes suksesvol uitgekontrakteer kan word . • Vestig kragtige bestuur- en ondersteuningsisteme om te verseker dat uitkontrakteringsinisiatiewe gewaarborg is om suksesvol te wees.

Thesis (MBA)--Stellenbosch University, 2015. / ENGLISH ABSTRACT: Expenditure on South African public sector projects is vital to infrastructure development and creating employment opportunities in the country. The submission of tenders by contractors is the traditional procurement method utilised in awarding contracts. The traditional tender procurement method is not only costly, but the lowest-bid method does not ensure that the eventual project at completion is the most cost effective. Although regulatory frameworks are in place to ensure that public sector projects are awarded to suitable contractors, there are numerous examples of public sector projects that have been awarded to incompetent contractors. The traditional tender procurement method is non-collaborative in its composition, as the contractors executing the work are not part of the design team. Furthermore, industry stakeholders’ perceptions influence procurement method preferences. This research project investigates whether the tender procurement method is best suited to meet the South African public sector’s requirements and achieve infrastructural development so desperately required, or whether it needs to be replaced in its entirety or adapted.

The purpose of this research was to determine whether or not the South African public procurement regime, within the framework set out in section 217(1) of the Constitution 1996, complies with the internationally accepted objectives or principles of public procurement, as contained in the UNCITRAL Model Law on the Procurement of Goods, Construction and Services (1994) and the World Trade Organisation‟s Plurilateral Government Procurement Agreement, and how these objectives are balanced with the need for the government‟s socio-economic policies. The main features of the public procurement reforms after South Africa became a constitutional state are the provision of constitutional principles applicable to public procurement; the creation of a single national legislative framework in terms of the Public Finance Management Act 1 of 1999 and the Local Government: Municipal Finance Management Act 56 of 2003, applicable to organs of state in the national, provincial and local spheres of government; and the creation of a supply chain management function that is fully integrated with the financial management processes in government, in which decisions on public procurement are decentralised to the procuring entities. The following broad principles applicable to public procurement, which are common to the Model Law and the GPA, were identified: (a) Economy; (b) Competitiveness; (c) Effectiveness; (d) Transparency; (e) The combating of abuse; (f) The avoidance of risk; (g) Accountability; (h) Fairness and equitability; and (i) Integrity. / Private Law / LL.D.

Thesis (LLM)--Stellenbosch University, 2013. / Bibliography / ENGLISH ABSTRACT: In order for the government to function, it needs goods and services. It may acquire these goods and services by using its own resources, or by contracting with outside bodies. The latter method is generally referred to as public or government procurement. Government procurement usually contributes a large deal to a country’s economy and is therefore of great importance. With South Africa’s political transformation in 1994, the construction industry was used as the model for public sector procurement reform. The industry regulates all infrastructure and constituted 3.8% of the country’s gross domestic product (GDP) in 2011 with the private sector as its biggest client. The legal regulation of construction procurement in South Africa is therefore significant. Section 217 of the Constitution¹ sets the standard for government procurement in South Africa. Section 217(1) provides that organs of state in the national, provincial or local sphere of government or any other institutions identified in national legislation when contracting for goods or services must do so in accordance with a system which is fair, equitable, transparent, competitive and cost-effective. Organs of state are not prevented from implementing procurement policies which provide for categories of preference in the allocation of contracts and the protection or advancement of persons, or categories of persons, disadvantaged by unfair discrimination in terms of section 217(2). Section 217(3) in turn provides that national legislation must prescribe a framework in terms of which section 217(2) must be implemented. The rules for construction procurement in South Africa are found in the Construction Industry Development Board (CIDB) Act² and the Regulations to the Act.³ The Construction Industry Development Board has been established by the Act and is empowered to regulate construction procurement in terms of the Act and to publish best practice guidelines for further regulation and development of construction procurement. This thesis aims to answer the question as to whether the legal regulation of construction procurement complies with section 217 of the Constitution. Chapter one sets out the research question to be answered, the hypothesis on which the thesis is based and the methodology employed. Chapter two establishes the constitutional standard for government procurement in South Africa and is the standard against which the rules discussed in subsequent chapters are tested. Following this, the procurement procedures in terms of which supplies, construction works and services are procured are described and analysed in chapter three. It appears that the Regulations to the CIDB Act exclude contracts for supplies and services in the construction industry. Therefore, the qualification criteria for construction works contracts are examined in chapter four. Thereafter, the evaluation and award of construction works, supplies and services contracts are explained and analysed in chapter five. Government procurement may further be used for objectives not directly connected to the main goal which is the procurement of goods and services at the best possible price. It may also be used for the promotion of socio-economic objectives, for example. Therefore, in the sixth chapter, the use of government procurement as a policy tool in the South African construction industry is discussed and analysed. The concluding chapter collectively refers to what was discussed in the preceding chapters including the conclusions and attempts to answer the research question as to whether the legal regulation of construction procurement in South Africa complies with section 217 of the Constitution. / AFRIKAANSE OPSOMMING: Die staat het goedere en dienste nodig om te funksioneer. Dit kan hierdie goedere en dienste verkry deur die staat se eie bronne te gebruik, of dit kan instansies van buite kontrakteer. Daar word oor die algemeen na laasgenoemde metode verwys as staatsverkryging. Gewoonlik lewer staatsverkryging ‘n groot bydrae tot ’n land se ekonomie en dit is dus van groot belang. Met Suid-Afrika se politieke transformasie in 1994 is die konstruksiebedryf as die model voorgehou vir die hervorming van die staatsverkrygingstelsel. Die konstruksiebedryf reguleer alle infrastruktuur in die land en het in 2011 3.8% tot Suid- Afrika se Bruto Binnelandse Produk (BBP) bygedra, met die private sektor as die grootste kliënt in die bedryf. Dit is dus noodsaaklik dat staatsverkryging in die Suid-Afrikaanse konstruksiebedryf wetlik gereguleer word. Artikel 217 van die Grondwet4 stel die standaard vir staatsverkryging in Suid-Afrika. Artikel 217(1) bepaal dat staatsorgane in die nasionale, provinsiale of plaaslike regeringsvertakkings, of enige ander instelling in nasionale wetgewing vermeld, wat vir goedere of dienste kontrakteer, sodanige goedere of dienste moet verkry ooreenkomstig ’n stelsel wat regverdig, billik, deursigtig, mededingend en koste-effektief is. Staatsorgane word verder nie verhinder of belet om staatsbeleid te implementeer wat voorsiening maak vir die bevordering van sekere mense, of kategorieë mense, wat ingevolge artikel 217(2) deur onbillike diskriminasie benadeel is nie. Artikel 217(3) bepaal dat nasionale wetgewing ’n raamwerk moet voorskryf ingevolge waarvan artikel 217(2) geïmplementeer moet word. Die Wet op die Ontwikkelingsraad vir die Konstruksiebedryf (Construction Industry Development Board Act)5 en die Regulasies tot die Wet6 omskryf die regsreëls vir staatsverkryging in die Suid-Afrikaanse konstruksiebedryf. Die Ontwikkelingsraad vir die Konstruksiebedryf het ingevolge hierdie Wet tot stand gekom en is gemagtig om staatsverkryging in die konstruksiebedryf te reguleer. Dit mag ook goeie praktykriglyne publiseer vir verdere regulering en ontwikkeling van staatsverkryging in die konstruksiebedryf. Hierdie tesis het ten doel om die vraag te beantwoord of die wetlike regulering van staatsverkryging in die konstruksiebedryf aan artikel 217 van die Grondwet voldoen. Hoofstuk een gee ‘n uiteensetting van die navorsingsvraag wat beantwoord sal word, die hipotese waarop die tesis berus en die metodologie wat aangewend word. Hoofstuk twee omskryf die grontwetlike standaard vir staatsverkryging in Suid-Afrika en word as standaard gebruik waarteen die regsreëls vir staatsverkryging in die konstruksiebedryf in die daaropvolgende hoofstukke getoets word. Vervolgens word die verkrygingsprosedures ingevolge waarvan voorraad, konstruksiewerk en dienste verkry word, in hoofstuk drie bespreek en ontleed. Dit blyk dat die Regulasies tot die Wet op die Ontwikkelingsraad vir die Konstruksiebedryf (CIDB Act) kontrakte vir die verkryging van voorraad en dienste uitsluit. Gevolglik word die tendervereistes vir konstruksiewerk in hoofstuk vier bespreek. Vervolgens word die evaluering en toekenning van konstruksiewerk, voorraad- en dienskontrakte uiteengesit en ontleed in hoofstuk vyf. Dit blyk verder dat staatsverkryging gebruik mag word vir doelwitte wat nie direk verband hou met die primêre doel, naamlik die verkryging van goedere en dienste teen die beste prys, nie. Dit mag byvoorbeeld ook gebruik word vir die bevordering van sosio-ekonomiese doelwitte. Gevolglik word staatsverkryging as ’n beleidsinstrument in die Suid-Afrikaanse konstruksiebedryf in hoofstuk ses bespreek en ontleed. Die laaste hoofstuk gee ‘n opsomming van wat bespreek is in vorige hoofstukke, maak gevolgtrekkings en probeer die navorsingsvraag beantwoord of die regsreëls wat staatsverkryging in die konstruksiebedryf reguleer, voldoen aan artikel 217 van die Grondwet.

Thesis (MPA)--Stellenbosch University, 2014. / ENGLISH ABSTRACT: Supply chain management (SCM) in the public sector in general, as well as the municipal sphere in particular, has received increasing prominence over past few years. Although the focus is mainly due to the impact of fraud and corruption in public sector procurement, this author is of the opinion that SCM can also create value and aid in the attainment of strategic objectives. The study revealed that supply chain management is described as a process in literature, whilst it is described as a system by government. Of significance to this, is that both literature and government view SCM as a means to add value. The study also revealed that in order for SCM to add value and to contribute to the attainment of strategic objectives, it is important that SCM forms part of the performance management (PM) system of an organisation. Performance measurement tools, such as the balanced scorecard, benchmarking, improvement and other measurement tools, were introduced as tried and trusted methods for measuring SCM performance. The study was embarked upon because the author was of the opinion that municipalities in South Africa only implement SCM because it is required by legislation. Thus, this theory was tested at Hessequa Municipality and it was found that the current emphasis was on compliance at Hessequa Municipality. This was done by means of studying documentary evidence and through interviews conducted with various internal and external stakeholders either directly or indirectly affected by the SCM processes of Hessequa Municipality. The study tested Hessequa Municipality’s readiness to progress towards performance management and measurement by using the financial capability model for SCM as utilised by the Western Cape Government to ascertain the level of SCM implementation at municipalities. It was found that Hessequa Municipality meets almost all the compliance and control requirements, with only two areas that require slight attention before full compliance is achieved. Through the interviews conducted, the study also tested Hessequa Municipality’s willingness to progress to the next level and found that there was indeed a willingness to progress towards managing and measuring SCM activities. In conclusion, the study recommended that Hessequa Municipality uses a phased-in approach when it sets processes in place to progress towards performance managing SCM. That when developing performance indicators for SCM, it be aligned to the performance management system and targets of the municipality. It also recommended that a combination of the tried and trusted methods be used to measure SCM performance. Finally, it recommended that the municipality eradicates the silo approach to doing business and adopts a more integrated approach by firstly integrating its internal processes before embarking upon integrating the actions of all the agents within the supply chain. / AFRIKAANSE OPSOMMING: Voorsieningskanaalbestuur (VKB) in die openbare sektor oor die algemeen sowel as in die munisipale omgewing in besonder, het gedurende die afgelope jare al hoe meer na die voorgrond getree. Alhoewel die fokus hoofsaaklik toegeskryf word aan die impak van bedrog en korrupsie op verkryging in die openbare sektor, is die skrywer van mening dat VKB ook waarde kan toevoeg en tot die die behaling van strategiese doelwitte kan bydra. Die studie het aan die lig gebring dat VKB in literatuur as ’n proses beskryf word, maar deur die regering as ’n stelsel beskryf word. Wat egter van belang is, is dat beide die literatuur en regering VKB as ’n middel beskou om waarde toe te voeg. Die studie het ook openbaar dat, ten einde vir VKB om waarde toe te voeg en tot die behaling van strategiese doelwitte by te dra, dit belangrik is dat VKB ’n deel vorm van die prestasiebestuurstelsel van ’n organisasie. Prestasiemetingsinstrumente soos die gebalanseerde telkaart, doelwitstelling, verbetering en ander metingsinstrumente is ingestel as bewese metodes om VKB-prestasie te meet. Die studie is onderneem omdat die skrywer van mening was dat munisipaliteite in Suid- Afrika slegs VKB implementeer omdat wetgewing dit vereis. Hierdie teorie is by Hessequa Munisipaliteit getoets en daar is gevind dat die huidige klem op voldoening aan wetsvereistes is. Die toets is gedoen deur dokumentêre bewyse te bestudeer, asook deur onderhoude te voer met verskeie interne en eksterne rolspelers wat óf direk óf indirek deur die VKB-prosesse van Hessequa Munisipaliteit geraak word. Die studie het Hessequa Munisipaliteit se gereedheid om na prestasiebestuur en -meting te vorder, getoets deur van die finansiële vermoë-model gebruik te maak wat deur die Wes-Kaapse Regering gebruik word. Hierdie model word gebruik om die vlak van VKB-implementering by munisipaliteite te bepaal. Daar is gevind dat Hessequa Munisipaliteit aan feitlik alle vereistes vir nakoming en beheer voldoen, buiten twee gebiede wat geringe aandag verg alvorens volle nakoming behaal word. Deur onderhoude te voer, het die studie ook Hessequa Munisipaliteit se bereidwilligheid getoets om na die volgende vlak te vorder. Daar is gevind dat daar inderdaad ’n begeerte was om na die bestuurs- en metingsaktiwiteite van VKB te beweeg. Laastens het die studie aanbeveel dat Hessequa Munisipaliteit ’n infaseringsbenadering gebruik wanneer prosesse in plek gestel word om na VKB-prestasiebestuur te vorder. Wanneer prestasie-aanwysers vir VKB ontwikkel word, moet dit met die prestasiebestuurstelsel en -doelwitte van die munisipaliteit belyn word. Dit word ook aanbeveel dat ’n kombinasie van die beproefde en getoetste metodes gebruik word om VKB-prestasie te meet. Die laaste aanbeveling is dat die munisipaliteit die silo-benadering van sake doen uitwis en ’n meer geïntegreerde benadering aanneem. Die interne prosesse moet eers geïntegreer word, waarna die handelinge van al die rolspelers in VKB geïntegreer word.

The purpose of this research was to determine whether or not the South African public procurement regime, within the framework set out in section 217(1) of the Constitution 1996, complies with the internationally accepted objectives or principles of public procurement, as contained in the UNCITRAL Model Law on the Procurement of Goods, Construction and Services (1994) and the World Trade Organisation‟s Plurilateral Government Procurement Agreement, and how these objectives are balanced with the need for the government‟s socio-economic policies. The main features of the public procurement reforms after South Africa became a constitutional state are the provision of constitutional principles applicable to public procurement; the creation of a single national legislative framework in terms of the Public Finance Management Act 1 of 1999 and the Local Government: Municipal Finance Management Act 56 of 2003, applicable to organs of state in the national, provincial and local spheres of government; and the creation of a supply chain management function that is fully integrated with the financial management processes in government, in which decisions on public procurement are decentralised to the procuring entities. The following broad principles applicable to public procurement, which are common to the Model Law and the GPA, were identified: (a) Economy; (b) Competitiveness; (c) Effectiveness; (d) Transparency; (e) The combating of abuse; (f) The avoidance of risk; (g) Accountability; (h) Fairness and equitability; and (i) Integrity. / Private Law / LL.D.