Finance and Economic Opportunities
With regard to Minister Maynier’s announcement in the 2021 budget speech, of “R2 million for the launch of an e-procurement solution, which will make it easier for businesses, especially small businesses, to become government suppliers”:
(1) (a) How much did the e-procurement solution cost and (b) what does it entail;
(2) whether the e-procurement solution was sourced from a private provider; if not, why not; if so, who holds the rights of the (a) solution and (b) information it documents, stores and shares;
(3) (a) how many small businesses, (b) from which areas and (c) what type of small businesses (according to the National Small Business Act, 1996 (Act 102 of 1996)) have been enabled by this e-procurement solution to become suppliers to the provincial government and local governments since its inception?
1
[a] The total expenditure to date in respect of the eProcurement Solution [ePS] is:
R 2 486 772, 84.
[b] This expenditure is in respect of:
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- the development of the system.
- hosting of the system.
- user-acceptance testing and fixes and
- maintenance, and support services.
The ePS was developed in-house via a Memorandum of Understanding undertaken between the Provincial Treasury and the Department of Transport and Public Works and the Centre for e-Innovation within the Department of the Premier. The current configuration has focused mainly on replacing the previous outsourced system for quotations that was used by our provincial departments in the Western Cape Government for bids below R500 000.00. The system went live for utilisation with effect from 01 December 2021.
2. No, the system has not been sourced from a private provider but has been built as an in-house system. A decision was taken to take the system in-house given that once one contracts for a financial system or similar systems like the ePS via a private provider, organs of state are locked into long term arrangements from a business continuity perspective. The cost driver that forms the bulk of the expenditure when a system is purchased from a private provider are licensing costs. This cost factor is totally eliminated for in-house development.
[a] The ePS is owned by the Western Cape Government including the intellectual property rights to the system.
[b] The information it documents, stores and shares is owned and managed by the Western Cape Government.
3. The ePS utilises the Western Cape Supplier Evidence Bank [WCSEB] as its supplier base for procurement opportunities received via the ePS.
[a] Diagram 1 hereunder presents the geographical visualisation of the 20 693 suppliers on the WCSEB:
DIAGRAM 1:
[b] There are 8808 suppliers which can be categorised as Small, Mediums and Micro Enterprises [SMMEs] that are based in the Western Cape. These suppliers are registered within the following municipal districts:
- 7076 in the City of Cape Town Metropole;
- 653 in Eden District;
- 533 in Cape Winelands District;
- 275 in West Coast District;
- 202 in Overberg District; and
- 69 in Central Karoo District.
[c] In terms of National Treasury Regulations [NTR] 16A3.2 [c] supply chain systems must be consistent with the Broad-Based Black Economic Empowerment [B-BBEE] Act, 2003 [Act No. 53 of 2003]. In this context:
- 7735 suppliers are Exempted Micro Enterprises [EMEs]. These are entities with an annual total revenue of R10 million or less deemed to have a Level 4 B-BBEE status and includes start-up enterprises.; and
- 1073 suppliers are Qualified Small Enterprises [QSEs]. These are enterprises with an annual total revenue of between R10 million and R50 million. The B-BBEE status of QSEs is measured by reference to all five B-BBEE elements in terms of the specific scorecard for QSEs in the B-BBEE codes of Good Practice
Please note: The ePS is a system used by provincial government and not by local government.
