Electronic tender portal for SMMEs

The announcement by National Treasury to launch an electronic tender portal in March 2015 is welcome news for small businesses. The portal will make it easier, more affordable and transparent for small firms to do work for the government.

National and provincial departments must from April 1 publish all tenders greater than R500 000 on the portal. Municipalities will join the system on July 1, and must place all tenders of over R200 000 online. Finance minister Nene said in his budget speech that suppliers will only be required to register once on the National Treasury’s database when they do business with the state. Tender documents will be available for free on the portal and tender advertisements in newspapers and the government gazette will be phased out.

The database will interface with the SA Revenue Service (Sars), the Companies and Intellectual Property Commission and the payroll system. The system would also be able to verify a supplier’s tax and Black Economic Empowerment (BEE) status, necessary for the allocation of preference points.

In addition, the e-procurement portal will also allow the National Treasury to identify public sector officials doing business with the state, a practice which the government is seeking to outlaw.

Two-year phase in

The government will start off slowly and develop the electronic tender portal to its full potential in two years, the National Treasury’s chief procurement officer Kenneth Brown told Fin24 last month. Brown said the new system was long overdue, following the disbandment of the national tender board in 2004, which saw procurement being devolved to a fragmented system of over 600 government entities

In the 2013/14 fiscal year the government spent R500bn on goods and services and on construction services, and the establishment of an e-procurement portal forms part of the National Treasury’s aim to make the government’s procurement process more fair and effective.

Along with the e-portal, a national price-referencing system developed by the National Treasury’s new Chief Procurement Officer will help government to improve the quality of spending by providing state institutions with data on the ranges within which the price of commonly used goods and services should fall. The new system will also be rolled out on April 1.

Likely challenges

Besides the odd glitch here and there, possibly the biggest challenges that the National Treasury is likely to face once the electronic tender portal is up and running is ensuring that sufficient small firms benefit. South Africa’s high internet costs, slow download speeds and more access to broadband outside main economic centres (such as in poorer parts of cities or in rural area) could hamper efforts to get small firms to benefit.

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