~ TSHWANE :CONOMIC DEVELOPHENT ICY AGEN SUPPLY CHAIN MANAGEMENT POLICY AND PROCEDURE MANUAL Rome Develo SE en v7 APPROVED 2014 -04- 08ME 1. PURPOSE AND SCOPE OF THE POLICY... 4 2. DEFINITION OF TERMG...... 4 3. DEVELOPMENT OF A SUPPLY CHAIN MANAGEMENT POLICY (SCMP). 6 4. SUPPLY CHAIN MANAGEMENT POWERS AND DUTIES 6 5. DEMAND MANAGEMENT....... Seana esi si rene c 6. ACQUISITION MANAGEMENT........... sinaes cece eceeee 8 7. RANGE OF PROCUREMENT PROCESSES, 10 8. DEVIATION FROM PROCUREMENT PROCESSES sos: Etror! Bookmark not defined. 9. GENERAL PRECONDITIONS FOR CONSIDERATION OF WRITTEN QUOTATIONSG.......Error! Bookmark not defined. 10. LIST OF ACCREDITED PROSPECTIVE PROVIDERS. 15 11. PETTY CASH PURCHASES eesceee 7 12. COMPETITIVE BIDDING PROCESS... ee an ences WT 13. BID DOCUMENTATION FOR COMPETITIVE BIDS ............. sea 18 14. PROCESS FOR COMPETITIVE BIDDING sevseeeseees 19 15. PROCEDURE FOR HANDLING, OPENING AND RECORDING BIDS.... csr 16. SINGLE SOURCE OR SOLE SUPPLIER. 24 17. COMMITTEE SYSTEM FOR COMPETITIVE BIDS. sib 24 18. THE BID SPECIFICATION COMMITTEE (BSC) acre sees 21 419. BID EVALUATION COMMITTEE (BEC)... 22 20. BID ADJUDICATION COMMITTEE (BAC) 23 21, THE FOLLOWING SHOULD APPLY TO ACQUISITIONS OF GOODS AND SERVICES AND THE DISPOSAL AND LETTING OF ASSETS. es evoee 25: 22. SUB-DELEGATIONS ceceentinanseee seen 29 23. PROCUREMENT OF GOODS NECESSITATING SPECIAL SAFETY ARRANGEMENTS..... 29 24. PROUDLY SA CAMPAIGN 2925, 26. 27. 28. 29. 30. 31. 32. 33. 34, 35. 36. 37. 38. 39. 40. 4. 42, 43, . APPROVAL OF THE POLICY... APPOINTMENT OF CONSULTANT........0:.. 30 NEGOTIATIONS WITH PREFERRED BIDDERS: censeeneeeetenee AZ DEVIATION FROM, AND RATIFICATION OF MINOR BREACHES OF, PROCUREMENT PROCESSES. . AZ UNSOLICITED BIDS........ 43 IRREGULAR, FRUITLESS OR WASTEFUL EXPENSES. 44 TWO - STAGE BIDDING PROCESS ised PROCUREMENT OF BANKING SERVICES.......... 45 PROCUREMENT OF IT RELATED GOODS OR SERVICES. 45 PROCUREMENT OF GOODS AND SERVICES UNDER CONTRACTS SECURED BY OTHER ORGANS OF STATE. 46 COMBATING OF ABUSE OF SUPPLY CHAIN MANAGEMENT SYSTEM 46 LOGISTICS, DISPOSAL, RISK AND PERFORMANCE MANAGEMENT. 48 PART 4: OTHER MATTERS - PROHIBITION ON AWARDS TO PERSONS WHOSE TAX MATTERS ARE NOT IN ORDER. .. 4 52 INDUCEMENTS, REWARDS, GIFTS AND FAVOURS TO (MUNICIPALITIES ¢ OR MUNICIPAL, ENTITIES), OFFICIALS AND OTHER ROLE PLAYERS. = 52 SPONSORSHIP........... 52 OBJECTIONS AND COMPLAINTS 53 RESOLUTION OF DISPUTES, OBJECTIONS, COMPLAINTS AND QUERIES ....cssccssene0: 53 CONTRACTS PROVIDING FOR COMPENSATION BASED ON TURNOVER ssc OD ETHICAL STANDARDS AND DECLARATION OF INTEREST. 54 REVISION OF POLICY 654. PURPOSE AND SCOPE OF THE POLICY Purpose - In terms of Section 217 of the Constitution, procurement of goods, works and services must be done in accordance with a system that is fair, equitable, transparent, competitive and cost effective. This policy document sets out ethical and sound procurement practices to be followed by all staff involved in procuring goods, works and services, to ensure value for money and intended outcomes for Tshwane Economic Development Agency (TEDA). The practices in this document are based upon and supplement the General Procurement Guidelines issued by the Minister of Finance and are to apply to purchases of goods, works, services, Scope - The development and implementation of this policy document therefore, represent a significant milestone towards facilitating the TEDA’s contribution towards the development and promotion of emerging and previously marginalized service providers/suppliers as well as provide a framework that satisfies the constitutional requirement of transparency and accountability. This Policy document will be subjected to changes/amendments, as new Supply Chain Management presccipts are introduced or put in place. 2. DEFINITIONS 24 In this policy, unless the context otherwise Indicates, a word or expression to which a meaning has been assigned in the Act has the same meaning as in the act, and- “ad hoc contract” means a contract arranged by TEDA for a once-off demand for goods/ services, “bid” means a written offer in a prescribed or stipulated form in response to an invitation by TEDA for the provision of goods, works or and for sale and letting of assets through formal written price quotations, advertised competitive bidding process or proposals.; jidder” means any natural or juristic person submitting a bid; “bid rigging’ Bid rigging (or collusive bidding) occurs when businesses, that would otherwise be expected to compete, secretly conspire to raise or lower prices or lower the quality of goods, works or services. Bid rigging is therefore, an agreement between competitors not to compete; bid adjudication committee (BAC) means a committee that is established and appointed by the Accounting Officer, to adjudicate, submissions by BEC make award or recommendation to Accounting Office to approve and make a final award a contract above an estimated value of R200 000; “bid evaluation committee (BEC)" means a committee that is established and appointed by the Accounting Officer, to evaluate bids, and make recommendations to the BAC. “bid specification committee (BSC)” means a committee that is established and appointed by the Accounting Officer, to compile, specificationsiterms of references; “closing time" means the date and hour specified in the bid documents for the receipt of bids;“competitive bid” means a bid in terms of a competitive bidding process which provides for appropriate levels of competition to ensure cost-effective and best value outcomes; “contract” means the agreement which results from the acceptance of a bid. “contractor” means any natural or legal person whose offer has been accepted by the TEDA; “contract price” means the price payable to the supplier under the contract for the full and proper performance of the contractual obligations; “Col” means City of Tshwane; “emergency” means a situation where immediate action is necessary in order to avoid a dangerous or perilous condition or risky situation or misery or defect provided that the situation is unforeseen; “final award”, means the final decision on acceptance of bid or quote; “formal written price quotation” means quotations referred to this poli “TEDA” Tshwane Economic Development Agency, SoC Ltd “CEO” Chief Executive Officer of TEDA, “CFO” Chief Financial Officer of TEDA “State” means any national or provincial department, netional or provincial public entity or constitutional institution within the meaning of the Municipal Finance Management Act, 1999 (Act No. 56 of 2003), municipality or municipal entity; provincial legislature: national assembly or the national council of provinces; or Parliament; “In the service of the State” means to be- (a) Amember of — (An official of any municipality or any municipal council; (i) Any provincial Legislature: or (ii) The National Assemble or the National Council of Provinces. (iv) An employes of any national or provincial department, national or provincial public entity or constitutional institution within the meaning of the Public Finance Management Act No1 of 1999. (b) Amember of the board of directors of any municipal entity “long term contract” means a contract with a duration period exceeding one year; “list of accredited prospective providers” means the list of accredited prospective providers which a municipal entity(TEDA) must keep in terms of the policy; “order” means an official written order issued for the supply of goods or the rendering of a service; “other applicable legislation” means any legislation applicable to municipal supply chain management, including — * the Broad-Based Black economic Empowerment Act, 2003 (Act No. 53 of 2003 * the Contraction Industry Development Board Act, 2000 (Act No. 38 of 2000); and the Preferential Procurement Policy Framework Act 2000 (Act No. 5 of 2000); “regulation” means the Local Government: Municipal Finance Management Act, 2003, Municipal Supply Chain Management Regulation;“SMME”: means Small, Micro and Medium Enterprise; “the Act” means the Local Government: Municipal Finance Management Act, (Act no.56 of 2003; “treasury guidelines” means any guidelines on supply chain management prescripts issued by the Minister of Finance in terms of section 168 of the Act. 2.2 In addition to the definitions in clause 1 of CoT’s SCMP the following will be applicable: © Where referred to the “Municipality/City/City of Tshwane Metropolitan Municipalit include TEDA as well; ‘* The Council of the CoT will be referred to in TEDA as the Board ‘+ The Accounting Officer will be referred to in TEDA as the Chief Executive Officer; and it will 3. DEVELOPMENT OF A SUPPLY CHAIN MANAGEMENT POLICY (SCMP) 3.1. SCM POLICY STATEMENT 344 This policy is consistent with all applicable legislation and TEDA's contribution towards the development and promotion of emerging and previously marginalized service providers/suppliers as well as provide a framework that satisfies the constitutional requirement of transparency and accountability 3.1.2 The Accounting authority of TEDA shall be responsible for approving the Supply Chain Management Policy and subsequent amendments 3.1.3. Applicable SCM processes and the thresholds values shall be consistent with those prescribed nationally from time to time. 3.2 The system shall provide for at least the following elements of Supply Chain Management: (a) Demand management; (b) Acquisition management; (c) Committee system for competitive bids; (d) Logistics management; (2) Disposal management; () Risk management; and (9) Performance management 4. SUPPLY CHAIN MANAGEMENT POWERS AND DUTIES 4.1. Statutory Powers and /duties of the Accounting Officer 1. The MFMA confers Statutory Powers and duties of the Accounting Officer. 2. The Accounting Officer may not delegate or sub delegate any supply chain management powers or duties —() To person who is not an official of the municipal entity; or (ii) To a committee which is not exclusively composed of officials of the municipal entity 4.2 SCM Standard Operating Procedures and Reporting. (@) (b) (c) (d) (e) Thet a competitive bidding process will be followed for any specific procurement of a transaction value above R30, 000.00 (Vat included). That no requirements for goods or services above an estimated transaction value of R200, 000.00 (Vat included) may deliberately be split into parts or item of lesser value merely for the sake of procuring the goods or services otherwise than through a competitive bidding process ‘That the BAC approves or recommends to the Accounting Officer up to the thresh hold of its delegation. No decision-making in terms of any supply chain management powers and duties may be delegated to an advisor or consultant The BAC makes recommendations to the Accounting Officer for bids exceeding its delegated threshold. 5. DEMAND MANAGEMENT 5.1. SYSTEM OF DEMAND MANAGEMENT (@) () (©) (d) the Accounting Officer must establish and implement an appropriate demand management system in order to ensure that the resources required by the municipal entity support its operational commitments and its strategic and operational commitments are delivered at the correct time, at the right price and at the right location, and that the quantity and quality satisfy the needs, an effective. The system of demand management must include the following: () Planning for future requirements. Acquisition and disposals of all goods required to meet the strategic goals outlined in the integrated development plan must be quantified, budgeted and planned to ensure timely and effective delivered, appropriate quality at a fair cost to meet the needs of the municipality and community. Critical delivery dates must be determined and adhered to; If the requirement of a repetitive nature and there are benefits of economies of scale a contract for a specific should be arranged: (iii) In order to compile the correct specifications an industry analysis/research should be undertaken to ensure future needs and technology benefits are maximized. All user depariments/ divisions shall annually submit demand management plans to. the SCM Unit which will be reviewed when necessary as prescribed in the applicable procedure manual. Specifications should be based on relevant characteristics and/or performance requirements. References to brand names, catalogue numbers, or similar classifications should be avoided. If it is necessary to quote a brand name or catalogue number of a particular manufacturer to clarify an otherwise incomplete specification, the words “or equivalent”should be added afer such reference. The specification should permit the acceptance of offers for goods which have similar characteristics and which provide performance at least equivalent to those specified. —_—_—_—_—_————— 6. ACQUISITION MANAGEMENT 6.1 SYSTEM OF ACQUISITION MANAGEMENT 6.1.1 Through operational procedures, an effective system of acquisition management. is established by the Accounting Officer in this pclicy in order to ensure:- (a) () © @) (e) That goods and services are procured by TEDA in accordance with authorised processes only; That expenditure on goods and services is incurred in terms of an approved budget as indicated in section 15 of the Act, That the threshold values for the different procurement processes ere complied with: That bid documentation, evaluation and adjudication criteria, and general conditions of a contract, are in accordance with any applicable legislation: That any National Treasury guidelines on acquisition management are properly taken into account. The following details of procurement processes are introduced: Value ‘of | Procurement Delegated | Sub Time frames Purchase Vat | Method Authority —_| Delegate from Inclusive advertisement to the approval of an order (0 - R2000 ‘One quotation ‘Accounting | Chief Financial | 1-30 Days Officer Officer R2001 up to | 3 quotations ‘Kecounting | Chief Financial | 7-30 Days 10,000 Officer Officer Ri0,001 up to|3 formal written [Accounting | Chief Financial | 1-90 Days 30,000 quotations Officer Officer R30,001 up to|3 formal ‘written | Accounting Chief Financial | 1-30 Days 200,000 quotations, advertise | Officer | Officer for 7 days on notice boards, apply the 80/20 preferential point system. R200, 000 up to | Competitive bidding | Accounting | Chief Financial | 1-30 Days R1 999 999 process: Officer Officer Advertised for 14 days, on _ notice boards and local | newspapers but not| limited thereto Allocate in accordance with the preferential points system | Tenders from] Competitive bidding | Accounting | Accounting 7-120 Days 2000 000to | process: Officer Officer iBje-evaietc R10 Millon Advertised for 14 SCM days, on notice boards and local eal by newspapers but not * limited thereto Motivation by BEC Allocate in Adjudication by accordance with the BAC preferential points andere system fenders above | Competitive bidding | Accounting | Accounting 7-120 Days R10 Million process Officer Officer re-evaluation Advertised for 30 scM days, on notice boards and local eo by. newspapers but not : limited thereto Motivation by BEC Allocate in Adjudication by accordance with the BAC. preferential points aia w system. ‘Accounting Officer L 6.1.2 The supply chain management policy, does not apply in respect of the procurement of goods and services contemplated in section 110(2) of the Act includina:— (a) () (o) (d) (e) @ Water from the Department of Water Affairs or a public entity, another municipality or @ municipal entity; and Electricty from Esxom or another public entity, another municipality or @ municipal entity. Telephone System from TELKOM. Postal Services from SOUTH AFRICAN POSTAL SERVICE Uee af Senices of the CSIR and SABS for Quality Testing and Standard Publications, Where goods are acquired under contracts acquired by an organ of state 25 per paragraph 32 of the Municipal Supply Chain Management Regulations 8.1.3 The following information must be made public where goods or services contemplated in qeetion 110(2) of the Act are procured other than through the supply chain management system — (a) The kind of goods or sarvices: (b) The name of the supplier; and (©) Where practical the total bid prices6.1.5 When approving a request for goods, works and services, the Accounting Officer must satisfy him/herself that: (@) Acquisitions are limited to essential goods, works and services and must always be done as economical, cost-effective and efficient as possible; () The goods, works or /services to be procured/acquired have been budgeted for and funds are available to finance the intended expenditure; 6.4.6 When a need/demand arises for any good(s) or service(s), Accounting Officer must Yutormine whether the good(s) or service(s) is / are already available on a general contract(s) or any other contract(s); 6.4.7 When the good(s) or service(s) required, irrespective of the value, is/are available on ne Mentioned contracts, the good(s) or service(s) must be procured in accordance with the relevant contract(s) to avoid breach of contract, 6.1.8 When the good(s) or sorvice(s) required is/are not available on a general contract(s) or ary Gther contract(s), possible suppliers listed on the TEDA database of prospective suppliers Should be approached. where no sultable suppliers are available from tho list of prospective suppliers, wrillen price quotations may be obtained from other possible suppliers; 6.1.9 Prospective suppliers should be approached on a rotation basis. The continued use of one supplier must be avoided at all costs; and 64.10 IF not possible 10 obtain at least three (3) written price quotations, the reasons must Pe recorded for audit purposes. ————————————————————ooooo™oo 7. RANGE OF PROCUREMENT PROCESSES 7.4 Upto value of R 2000 (VAT included) (a) Goods may be procured without inviting competitive bids or price quotations by means of petty cash; (6) Assets cannot be procured by means of petty cash except on urgent and emergeney asses and such must be motivated and approved by the Accounting officer except for Urgent and emergency cases and such must be motivated and approved by the Accounting officer. 7.2. Above the value of R2000 but not exceeding the value of R10 000 (VAT included): (a) Quotations must be obiained at least from three (3) different suppliers preferably from, butnot limited to, providers whose names appear on the list of accredited prospective providers of the municipal entity, provided that if quotations are obtained from providers who are not listed, such providers must meet the listing criteria in the SCMP; (0) To the extent feasible, providers must be requested to submit their quotations, waiting, The order should, however, be placed against written confirmation from the selected supplier if the quotation was submitted verbally; 1073 74 18 (@) The lowest acceptable quotation must be considered for award. ‘Above the value of R10 000 but not exceeding the value of R30 000 (VAT included): (@) Quotations must be obtained in writing from at least three (3) suppliers whose names appear on the list of accredited prospective providers of the municipal entity; (6) Written quotations may be obtained from providers who are not listed, provided that such providers meet the listing criteria in the SCM; (©) The lowest acceptable quotation must be considered for award. Above the value of R30 000 (VAT included) but not exceeding the value of R200 000 (VAT included): (a) The procurement of goods and services above R30 000,00 but below R200 000,00 (vat included) must be procured through formal written price quotations or ‘competitive bidding: (b) These must be advertised on the notice board and website of TEDA for a period of at least seven (7) days; (©) The quotations must be awarded based cn the highest number of points as contemplated in the Preferential Procurement Policy Framework Act; (4) _ The Preferential Procurement Policy Framework Act (Act 5 of 2000) and regulations are applicable; (a) The municipal entity must be in possession of a valid tax clearance certificate of the recommended bidder prior to award. Rotation of Suppliers ‘The Processes for the rotation of suppliers by the SCM department will be as follows: 4. (@)_ Whenever requisitions are received to go out on ductations, Accounting Officer must solicit quotations from a minimum of three different Service Providers (in the relevant commodity) who were not given a chance to quote before (b) All requirements in excess of R30, 000.00 (Vat included) that are to be procured by means of formal written price quotations must be advertised for at least (7) seven consecutive days on the website and an official notice board of TEDA. Offers received must be evaluated on a comparative basis taking into account Unconditional discounts and the applicable 80/20 preference points. (0) _ Offer below R30, 000.00 (Vat Included) must be awarded based on compliance to specifications and conditions of tender, ability and capability to deliver the goods and services at the lowest acceptable price. "7.6 7.61 7.6.2 (a) The Accounting Officer must take all reasonable steps to ensure that the procurement of goods and services through formal written price quotations is not Sbused by detailing the full specification/ requirements and an evaluation criteria. (©). Notwithstanding the above requirements for consideration, quotations not complying with specification may not be accepted (. Only quotations complying with the specifications will be considered to be accepted, provided that there are sufficient funds within the appropriate budget. (@). Where no quotation complies with the specification, fresh quotations must be called for. (h). if 3 or more service providers were requested to quote through email or fax, and Oe the closing date only one of two service providers respond, the SCM will On thas with the process and regard the process as normal procurement provesees were followed, provided that the quotation complies with the Specification and report this to the Accounting Officer. Reasons shall be recorded for audit purposes. BROAD-BASED BLACK ECONOMIC EMPOWERMENT (BBBEE) OBJECTIVES OF BBBEEA () To specily the interpretative principles of Broad Based Black Economic Empowerment (B-BBEE) (iy) To specify the application of Codes and the basis for measurement under the codes. (i) To indicate the qualifying thresholds for Measured EW © qualify as exempted Mcto-enterprises (EME), Qualfying Small Enterprises (QSE) and (SMME) Small Micro Enterprises) (v) To specify the elements of BBBEE measurable under the generic score card and qualifying small enterprises. (To specify the basis for determining compliance by entties with the Codes TEDA fully endorses and supports the Government's Broad-Based Black Economic Empowerment (BBBEE) programme. TEDA would prefer to do business with local business enterprises who share ie values pnd who are prepared to contribute to the meaningful BBBEE initiatives (including, but ane tuited to. subcontracting and Joint Ventures) as part of thelr request for proposal (RFP) responses. 1276.3 7.6.4 76.5 766 767 7.6.8 7.69 1? TIA 7.72 7.73 TEDA'S policy isto alow a preference” in accordance wit the Preferential Procurement Policy Framework Act No.5 of 2000, to companies who provide a BBBEE Accreditation Cetttcate "All procurement and disposal transactions in excess of R30 000 rust be evaluated accordingly. Suppliers with an annual turn-over of below R10 milion per annum are considered as ‘SMME’s Suppliers with a tumover of between RS milion and above per annum should submit BREE accreditation certficates from the South African National Accreditation GYSI6M (SANAS) accredited rating agency or auditors approved by the Independent Regulatory Board of Auditors (IRBA) with their tenders. Suppliers with a turnover of less than R5 millin per annum (Exempted Micro Enterprises) should submit auditor certificate or similar certificate issued by an Secounting officer with their tenders. Failure to submit the BEE certiicate disqualified the bidder from claiming any BEE points. TEDA may, in the case of designated sectors, where in the award of tenders local production or specific goals are of critical importance, adverlise such tenders with a Specific tendering condition that only locally produced goods, services Of works or locally spufactured goods, with a stipulated minimum threshold for local production and content will be considered. Where respondents wish to enter into @ Joint Venture or subcontracting portions of the eentacl to BBBEE companies, their tender response must state the percentage of the cont contract value to be allocated to such BBBEE companies should they be awarded any business. A rating certificate in respect of such BBBEE Joint Venture pariners or sub-contractor(s), ae well-as a breakdown of the distribution of the aforementioned percentage must also be furnished with the tender response to enable TEDA to evaluate and adjudicate all tenders received on a fair basis. Notwithstanding paragraph (7.6.3), (7.6.4), (7.6.5) and (7.6.7), the Nafional Treasury may at any time direct implementation strategies otherwise. Pricing evaluation Bidders that mest the minimum threshold on functionality will be evaluated on the 80/20 §r 90/10 principle where 80 (eighty) and 90 (ninety) points must be used for price and 20 {iwenty) oF 10 (ten) points be used for Black Economie Empowerment (BEE) The prescribed formulae from National Treasury shall be used to calculate the points awarded for pricing TEDA is not obliged to accept the lowest price, as price is not the only consideration. 1378 BBBEE 7.8.1 When scoring BBBEE bidders, documents referred to in subsection (7.6.4) shall be considered. 7.82 20 (twenty) points will be calculated for procurement equal to or above Rae 000 upto R1000 000.00 (1 milion rand)(all applicable taxes included). 783 10 ten) points will be calculated for procurement above 1000 000.00 (1 milion rand) (all applicable taxes included). 784 National Treasury may from time to time amend the proportions and ine points: 79 TEDA supports any other municipal policies that may be issued at any given time. 740 TEDA’s target towards (SNME/ EME) Small Micro-enterprises/ Exempted Micro Enterprises empowerment is set at (75%) per quarter. 8 SMME(SMALL MEDIUM MICRO ENTERPRISES) 81 National Small Business Enterprise Act Amendment Section 4 of (Act 10 102 of 1996) as amended by Section 1 (Act no 26 of 2003) provides guidelines to be followed by organs of state to promote small enterprise in South Africa Categories of SMME as per the National Small Business Act (Category of | 7 Sal ‘Description | |survivaist [Manly undertaken by unemployed persons. Income generated below the poverty | nterprises line, providing minimum means to keep the unemployed and their families alive. Littie ‘capital invested, not much assets. Not much training Opportunities for) igrowing the business very small [Between (1-5) one to five employees, usually the owner and family. ~ Operates in the informal sector of the economy. | [eee vises Informal - no license, formal business premises, labour legislation Turnover below jenterp He VAT registration level of R300 000 per year. Basic business skills and training | [Potential to make the transitcn to a viable formal small business c Part of the formal economy, use technology | Very _small enterprise Less than 10 paid employees Include selfomployed artisans (electricians, | plumbers) and professionals. eee than 100 employees ‘small | lenterprise More established than very small enterprises, formal and registered, fxed| pocmess premises. Owner managed, but more complex management structure _ [Up to 200 employees | {medium \terpris fenterprise |i) mainly owner managed, but decentralised management structure with division | 14| {of labour Operates from fixed premises with all formal requirements. Micro = less than 10 employees ‘Small = less than 100 employes Medium = less than 200 employees 9 PROCUREMENT OF GOODS OUTSIDE SOUTH AFRICA 9.1 Preference must be given to Proudly South African products Whenever there is a need for goods and services to be acquired outside South Africa, it is most advisable to advertise using South African embassies. 70. ESTABLISHMENT OF A LIST OF ACCREDITED PROSPECTIVE PROVIDERS (PANEL OF CONSULTANTS 10.1 Compilation of a list of service providers must be used to procure requirements through Smitten, verbal, formal quotations or a panel of service providers. The list must be used effectively to promote the objectives of the Preferential Procurement Regulations as well as Broad Based Black Economic Empowerment Act, Act no 53 of 2008 40.2 Registration of service providers should allow for registration through-out and the criteria for accredited prospective providers may include: a) Promotion of SMME b) Promotion of BEE ¢) Promotion of business located in a particular municipality. 40.3 The Accounting Officer must- (@) Keep and maintain a list of accredited prospective providers of goods and services that ree be used for the procurement requirements of TEDA through formal written price or verbal quotations; (b) Atleast once a year through newspapers commonly circulating locally, the website and any other appropriate media, invite prospective providers of goods or services to apply for listing as accredited prospective provider: (0) Specify the listing criteria for accredited prospective providers; and (@) Disallow the listing of any prospective provider whose name appears on the National Treasury's database of restricted suppliers. (e) The list of accredited prospective providers must be updated at least quarterly to any newly established small businesses and any new commodities or types of services (9 The Accounting Officer must promote on-going competition amongst providers by Gasuring that all written or verbal or formal written price quotations are invited irom list eae ha prospective providers of goods and services on a rotation basis, to avoid Gny accusations of favouritism, fraud, corruption and unfair and irregular practices 15(g) The Accounting Officer must take all reasonable steps to ensure that the procurement of goods and services through written or verbel or formal written price quotations is not abused. (h) The Accounting Officer must on monthly besis be notified in writing of all written or verbal quotations and formal written price quotations accepted (i) The supplier list should be used to promote participation of black-owned, small, medium and micro enterprises (SMME’s) and community co-operatives, {j) The inclusion of any supplier in the database of suppliers does not exempt the supplier from the obligation to respond in the prescribed manner to notices of TEDAs SCM requirements. (k)_ Suppliers who wish to be included in the list of accredited suppliers without waiting for eet tation may approach the procurement section for inclusion, provided! Ney supply the necessary documentation and information for, evaluation ‘Once these Sguuiremenis have been satisfied, the Procurement Section will ensiTe that the fcspective supplier is evaluated and will provide @ response as to ‘approval in the earliest convenience. () Prospective suppliers will not be eligible to provide quotations until they have been approved as an accredited supplier, except where the prospective supplier provides @ type of commodity or service for which no supplier is available ‘from the list of accredited suppliers. (ir)Where consultancy services are required on a recuring basis, a panel of nere utente! lst of approved suppliers for the rendering of these services ray be Ceiublished. ‘These pane’s should be established through competitive bidding process. 10.4 The following information, among others must be furnished or included in the invitation: (a) Composition of firm in terms of shareholding. (b) Personnel complement (6) _Representation of expertise in respect of the disciplines required, e: legal ‘educational, engineering, computer, etc. (¢) _Nalional or International acceptance of experts in the various professions (©) Experience as indicated in projects already dealt with and (f) Financial position (g) A predetermined method of awarding points should be measints reduirements such as qualifications, experience, acceptability, facies and resources, availability, track record, client base, ete. (h) () The Panel can therefore be utilised on a rotation basis by either obtaining quotations, selecting them on a rotation basis if rates are capped, with no need to advertise again 16410.5 Where there are no suitable providers in the supplier database, reasons for procuring outside must be recorded and approved by the accounting officer. ‘41. PETTY CASH PURCHASES 44.4 The conditions for the procurement of goods by means of petty cash purchases must state in each individual approval by the Chief Financial Officer — {e) The terms on which a manager may delegate responsibilty for petty cash to an official reporting to the manager, (b) The maximum number of petty cash purchases or the maximum amounts per month for each manager, (c) Any types of expenditure from petty cash purchases that are excluded, where this is considered necessary; and (a) A monthly reconeiliation report from each manager must be provided to the Chief Financial Officer, including- (The total amount of petty cash purcheses for that month: and i) Receipts and appropriate documents for each purchase (e) Any other additional information and condittons set by the Chief Financial Officer. (Petty cash facility may be utlised up the value not exceeding 2000.00 (g) _ Alltransactions must be done in accordance with Petty Cash policy. (h) Assets may not be acquired through Petty cash for proper recording purposed except ‘on exceptional cases (urgent and emergencies) 72, COMPETITIVE BIDDING PROCESS 12:1 Goods ot services above a transaction value of R200 000 (VAT included) and long term cottacts may only be procured through a compeiltive bidding process except In casee of paragraph 6.1 <. 412.2. No requirement for goods or services above the value of F200 000 (VAT included), may wigerately be spit into parts or items of lesser value meraly for the sake of procuring the {goods or sorvices otherwise than through a competitive bidding Process. 7ee eee 43, BID DOCUMENTATION FOR COMPETITIVE BIDS OOS" 43.1 The criteria to which bid documentation for a competitive bidding process must comply, must (a) (e) () (d) take into account — (i) The general conditions of contract and where applicable, special conditions of @ contract. (ji) Any National Treasury guidelines on bid documentation; and (ii) The requirements of the Construction Industry Dovelopment Board, in the case of bid relating to construction. upgrading or refurbishment or infrastructure, Include evaluat legislation; Compel bidders to declare any confict of interest they may have in the transaction for which the bid is submitted. If the value of the transaction is expected to exceed R10 milion (VAT included), require bidders to furnish- n and adjudication criteria, and criteria required by other applicable (i) If required by law to prepare annual financial statements for auditing, and audited annual financial statements — (a) forthe past three years; or (b) since their establishment if established during the past three years (ii) Cerificate signed by the bidder certifying that the bidder has no undisputed commitments for municipal services towards a municipality or other service provider in respect of which payment is overdue for more than 30 days. (iv) Particulars of eny contracts awarded to the bidder by an organ of state during the past five years, including particulars of any material non-compliance or dispute concerning the execution of such contract, (iv) A statement indicating whether any portion of the goods or services are expected to be sourced from outside the Republic of, and, if so, what portion and whether any portion of payment frm the municipality or municipal entity is expected to be transferred out of the Republic; and 41. Stipulate that dispute must be settled by means of mutual consultation, mediation (with or without legal representation), or, when unsuccessful, ina South African court of law. 18—————————— ooo 44, PROCESS FOR COMPETITIVE BIDDING eR _—_—_—_—_—_————_—_———_—_—_———___ 144 142 143 144 14.5 14.6 14.7 14.8 14.9 ‘The procedure for a competitive bidding process are established in this policy for each of the following stages: (2) The compilation of bid documentation; (b) The public invitation of bids, (c) Site meetings or briefing sessions, if applicable; (@) The handling of bids submitted in response to public invitation; (e) The evaluation of bids; () Adjudication and awards; (g) The administration of contracts; and (a) Proper record keeping The relevant department identifies the need for goods/and or services and in conjunction with SCM, draw up specfication/terms of reference together with an evaluation criteria; The relevant department will request the Accounting Officer to approve the following (a) Aneed to go out on tender: (6) A specifications/terms of reference with a criteria and specific goal; (c) The estimated budget amount; and Office of the Chief Financial Officer will allocate a bid number and establish the advert date, closing date, validity period and the date for any proposed site meeting or briefing session in consultation with the relevant manager. The Accounting Officer may determine or approve a closure date for the submission of bids which is less than the 30 or 14 days requirement, but only if such shorter period can be justfied on the grounds of urgency or emergency or any exceptional cases where it 's impractical or impossible to follow the official procurement process. The Chief Financiel Officer will advertise a bid with specification/terms of reference and the evaluation criteria in newspapers commonly circulating locally, website! notice board of the municipal entity and the Goverment tender bulletin. ‘The office of the Chief Financial Officer will prepare the bid documentation and conducts the administrative procedure in order to comply with the SCMP and the SCM Regulations. The correct bid documentation as prescribed by the National Treasury must form part of the of the bid document. The public invitation for competitive bids must be as follows: (a) Any invitation to submit bids must be by means of a public advertisement in newspapers commonly circulating locally, the website of the municipal entity or any other appropriate ways (which may include an advertisement in the Government Tender Bulletin); and (b) The information contained in a public advertisement, must include — 19() The closure date for the submission of bids, which may not be less than 30 days in the case of transactions over R10 million (Vat included), or which are a long term nature, or 14 days in any other case, from the date on which the advertisement is placed in the newspaper, subject to subparagraph (2) of this policy; (ii) A statement that bids may only be submitted on the bid documentation provided by the municipal entity;and (iii) Date, time and venue of any proposed site meetings or briefing sessions. (©) Bids submitted must be sealed (@) Where bids are requested in electronic format, such bids must be supplemented by sealed hard copies. a 45. PROCEDURE FOR HANDLING, OPENING AND RECORDING BIDS ——————— 15.1. Bids— (a) Must be placed in the dedicated box, by the vendor, before the closing time (0) Must be opened only in public; (©) Must be opened at the same time and as soon as possible after the period for the submission of bids has expired; (@) Bids placed in the incorrect box should not be considered; and (©) No information, relating to the bid should be disclosed to bidders or other person after the closing date until the successful bidder is notified of the award. 15.2 Any bidder or member of the public has the right to request that the names of the bidders who submitted bids in time be read out and, if practical, also each bidder's total kidding price. 45.3 The office of the Chief Financial Officer will - (a) Record in a register all bids received in time: (b) Make the register available for public inspection; and (c) Ensure that bids: (i) Include original valid Tax Clearance Certificates (and proof that bidders tax matters are declared to be in order by SARS); (i) Have been properly signed; (ji) Are substantially responsive to the bid; and are otherwise generally in order 45.4 If a bid is not substantially responsive, that is, it contains material deviations from or reservations to the terms, conditions and specifications in the bidding documents, it should not be considered further. 48.5 Bidder should not be permitted to correct or withdraw material deviations or reservations once bids have been opened15.6 Bids must be lodged not later than the closing time specified for receipt at the address and in accordance with directives mentioned in the bid documents, 5.7 Bids received after the closing time at the physical address indicated in the bid documents must be considered as having been received late and the following must apply: (a) The bid must not be admitted for consideration (b) The bid must be marked as proof that it was received after the closing time. c} The bid must be returned unopened to the bidder (except where the address does not reflect) d) If the electronic bid was in time, but the hard copy was late, it is considered that the bid was in time. 46. SINGLE SOURCE OR SOLE SUPPLIER 16.1 It is policy of the government that all bids must be advertised in at least the Government Tender Bulletin, Website, Newspaper(s) or relevant media with a view of affording potential bidders equal and fair opportunity to offer their goods and or services as well as to enhance the principle of competition and transparency. 16.2 For each request above R2000 for sole or single supplier prior approval must be obtained from the Accounting Officer and: (a) Confirmation letter from the manufacturer indicating that the bidder is the sole supplier and or agent. 17. COMMITTEE SYSTEM FOR COMPETITIVE BIDS 17.1. The following committees are hereby established- (a) Abid spectfication committee; (b) Abid evaluation committee; and (c) Abid adjudication committee; 17.2 The Accounting Officer is required to appoint the members of each committees, taking into account section 117 of the Act; 17.3 The committee system must be consistent with this policy; and any other applicable legisiation; and 17.4 The Accounting Officer may apply the committee system to formal written price quotations. 48. THE BID SPECIFICATION COMMITTEE (BSC)48.1 An accounting officer must, where necessary, in writing appoint the Bid Specification Committee. The BSC will consider all bid specification/terms of reference (including the appointment of consultant, make recommendation and seek the Accounting Officer's approval prior to advertisement of bid(s) as bids may only be evaluated according to the criteria stipulated in the bid documentation; the bid specification committee must ensure that the process of drafting the spectfication is not abused to favour any potential bidder. 18.2 The BSC must at least consist of three (3) members (including the Chairperson) who have the necessary knowledge in that specific field; 18.3 An official from the Finance Department specifically Supply Chain Management must be part of the BSC as an advisor; 18.4 No person, advisor or corporate entity involved with the BSC, or director of such a corporate entity, may bid for any resulting contract; 18.5 The meetings of the BSC shall be formal and the proceedings at meetings must be recorded appropriately and record must be kept regarding any decisions; 48.8 The Chairperson shall have both a deliberate vote as well as a casting vote; and 18.7 All members of the BSC should comply with all the ethical standards, codes of conduct, practice notes and any other legislative or prescriptive condition that may be imposed regarding the conduct of officials in the supply chain management process. if the appointed chairperson is not available, the members present shall elect a chairperson from amongst themselves. 18.8 Composition of the BSC can change to accommodate different scenarios. 49. BID EVALUATION COMMITTEE (BEC) 19.1 Abid evaluation committee must be cross-functional and must be composed of : 19.1.1 Officials from the end user requiring the good, works or services; and 19.4.2 at least ono supply chain management official 19.2 The BEC must- (a) Evaluate bids in accordance with- (i) The specifications and the criteria specified in the bid documentation for a specific procurement; and (b) Evaluate each bidder's ability to execute the contract, (©) Check in respect of the recommended bidder whether municipal rates and taxes and municipal service charges are notin arrears, and; (d) Submit to the Bid Adjudication Committee a report and recommendations regarding the award of the bid or any other related matter, 2219.2 19.3 19.4 19.5 19.7 (@) The BEC must ensure that no award is made to a person— (i) Whois inthe service of the state; or (i) If that person is not a natural person, of which any director, manager, principal shareholder or stakeholder is a person in the service of the state; or (ii) A person who is an advisor or consultant contracted with the municipal entity if ‘such an appointment relates to the bid under consideration All Members of the BEC should comply with all the ethical standards, codes of conduct, practice note and any other legislative or prescriptive condition that may be imposed by regarding the conduct of officials in the supply chain management process; Each member as well as all official rendering administrative support (SCM) must sign the declaration of interest form at each BEC meeting. Members are to declare that they will- (2) Accept the confidentiality of the meeting: (b) Notmake known anything regarding the meeting, unless officially authorized; and (©) _ Not favour or prejudice anybody. Bidding documents should provide for rejection of all bids if and when deemed necessary. This is justified when there is lack of competition, or bids are not substantially responsive. However lack of competition should not be determined solely on the basis of the number of bidders. If all bids were rejected, the municipality/ municipal entity should review the cause of the rejection and corsider making revisions to the specific conditions of contract, design and specifications, scope of the contract or a combination of these, before inviting new bids. If rejection is due to lack of competition, wider advertising should be considered. If the rejection is due to most or all the bids being non responsive, new bids may be invited from the initially pre-qualified firms, or with the agreement of the Accounting officer, from only those that submitted bids in the first instance. Alternatively, municipality! municipal entity may negotiate with the identified preffered bidder to try to obtain a satisfactory contract through @ reduction in the scope and/or reallocation of risk and responsibility that can be reflected in the reduction of the contract price. However substantial reduction in the scope or modification to the contract documents may require re- bidding The Accounting office's prior approval must be obtained before rejecting all bids, soliciting new bids or entering into negotiations with the identified preferred bidder. 20. BID ADJUDICATION COMMITTEE (BAC) 20.1 20.2 The Bid Adjudication Committee must be cross-functional of which at least one member should be a supply chain management practitioner. A bid adjudication committee must consist of at least four TEDA senior officials, the Chairperson of the committee should be the Chief Financial Officer. Neither a member of a bid evaluation committee, nor an advisor or person assisting the bid evaluation committee may be a member of a bid adjudication committee. The BAC must- (@) Consider the report and recommendations of the BEC;20.3 20.4 20.5 20.6 207 20.8 20.9 (b) Make @ recommendation to the Accounting Officer to make the final award in excess of R10 million; The BAC must ensure that (2) Allnecessary bid documents have been submitted; (b) _Disqualifications are justified and that valid and accountable reasons/motivations were furnished for passing over of bids (©) Scoring has been fair, consistent and correctly calculated and applied; and () Declarations of interest have been taken cognisance of. The meetings of the BAC shall be formal and the proceedings must be recorded (e.g. tape) to enable the secretary to prepare reports when required by a court of law. Recording of the meeting must be kept for at least five years as prescribed by the National Archives of the South Africa Act, No. 43 of 1996; The Chairperson shall have both a deliberate vote as well as a casting vote; Members of a BAC shall in exercising and executing their powers and functions, in terms herecf, comply with all TEDA policies, by-laws, guidelines, directives and relevant legislation pertaining to procurement of goods/services, appointment of consultants and the disposal of property: Each Member of a BAC shall attend the formal meetings of the committee in person, unless another official is acting in his/her official position and in such a case the acting official shall attend in his/her place; All Members of a BAC should comply with all the ethical standards, codes of conduct, practice notes and any other prescripts for the SCM officials and stakeholders; The Chairperson and Members of the Bid Adjudication Committee are appointed in writing by the Accounting Officer, the appointment of BAC members must be facilitated by the office of the Chief Financial Officer 20.10Either a member of a BEC. nor an advisor or person assisting the BEC, may be a member of a BAC; 20.11Each member as well as all officials rendering administrative support must sign an Attendance Register and Undertaking of Confidentiality and Impartiality declaration form at each BAG meeting. Members are to deciare that they will- (@) Accept the confidentiality of the meeting; (») Not make known anything regarding the meeting, unless officially authorized; and (c) Not purposefully favour or prejudice anybody. 20.12Co-opted Members/Advisors (a) Co-opted members/advisors have the same powers and duties as members, excluding the right to vote on any matter under discussion; 2420.13Members of the BEC may present their reportsirecommendations to the BAC and clarify any issues but shall not have any voting powers: 20.14If a bid other than the one recommended by the BEC is considered by the BAC the Accounting Officer must first be notified. The Accounting Officer may after consideration of the reasons for deviation, ratify or reject the decision of the BAC. If the decision of the BAC to recommend a bid other than the one recommended by the BEC is ratified, the Auditor- General, the relevant provincial treasury and National Treasury and the parent municipality must be notified of the reasons for deviating from such recommendation; 20.15The Accounting Officer may at any stage refer any recommendation made by the BEC or the BAC back to the respective committee for reconsideration; 20.46The BAC may also, consider and rule on all reports/recommendations regarding the amendment, variations, extension, cancellation or transfer of contract awarded. 21. THE FOLLOWING SHOULD APPLY TO ACQUISITIONS OF GOODS AND SERVICES AND THE DISPOSAL AND LETTING OF ASSETS (1) All delegations must be in writing to individual officials, (2) No supply chain management duties or powers may be delegated or sub-delegated to a person who is net an official of the municipality / municipal entity or to a committee which is not exclusively composed of officials of the municipality / municipal entity (3) The Accounting Officer should decide whether he/she delegates decision-making powers regarding the final award of bids to the adjudication committee and what the threshold values in this regard should be; (4) Should the Accounting Officer decide that the adjudication committee only awards up to a specified threshold value, bids above that threshold value should be referred to the Accounting Officer for finality, (5) Ifa BAC decides to award a bid other than the recommended by the BEC, the BAC must prior to awarding the bid, check whether the bidders municipal rates and taxes and municipal Charges are not in arrears and request prior approval from the Accounting Officer. (6) The Accounting Officer may, after due consideration of the reasons for the deviation, approve or reject the decision of the BAC. (7) If the deviation is rejected, the Accounting Officer may refer the decision of the adjudication committee back to the adjudication committee for reconsideration or approve the recommendation as Accounting Officer. (8) The Accounting Officer may at any stage of the bidding process, refer any recommendation made by the specification, evaluation or adjudication committee with reason back to that committee for reconsideration of the recommendation. (9) _ If the bidder other than the one recommended in the normal course of implementing the SCM policy of a municipality or municipal entity is approved, the Accounting Officer of the(10) 214 (a) (2) @) 212 (1) municipality or municipal entity must, in writing, within 10 working days notify the Auditor General, the relevant provincial treasury and, in the case of a municipal entity, also the Parent municipality, of the reasons for deviating from such recommendations. This however does net apply if a different bid was approved in order to rectify an irregularity The Accounting Officer may ratify any minor breaches of the procurement processes by an official or committee acting in terms of the delegated powers or duties which are purely of a technical nature. DISPOSAL PROCESS The final phase of Supply Chain Management function is the disposal process. The focus is firstly, on the process required for the disposal of redundant and obsolete ‘stores/equipment and, secondly, on the process required for the disposal of unserviceable stores and equipment. The authority to submit recommendations with regard to the disposal of redundant, obsolete and unserviceable stores, equipment, rests with the disposal committee. The function of the committee is to ensure that office derives optimal use from its stores and equipment. isposal of movable and immovable assets must be at market-related value, or through competitive bidding. DISPOSAL PROCEDURE ‘As soon as it has been established, beyond reasonable doubt, that stores/ equipment is/are unserviceable, obsolete andlor redundant, and that they should be disposed of the following procedure shall be applicable: a) The relevant officer shall report such items to Supply Chain Management unit through the normal service channels, by means of a memorandum/ report. b) Unserviceable items are under no circumstances to be reported as redundant. ©) At the receipt of such a request from an end-user, Supply Chain Manager, or his‘her delegate, by means of a personal inspection, should determine the condition of the items. With regard to the term "condition", Supply Chain Management or his/her delegate certifies that he/she personally inspected the items and that they is/are in a working/usable condition. Should the contrary be proved at a later stage, the Supply Chain Management unit or hisfher delegate shall be held responsible. d) Supply Chain Management unit determines the various options of disposal available in respect of each of the items and decide whether the items need to be distributed or repaired before the disposal process takes effect. During this evaluation process the full financial implications of disposing of the items should be taken into consideration. Supply Chain Management unit shall therefore, endeavour to administer the items to the best advantage of the entity. 26©) Once the decision is made through the approval of the Disposal Committee to dispose of items, the disposal process shall dictate different approaches for obsolete or redundant items in comparison to those items classified as unserviceable items. 21.2 Procedure in respect of obsolete and redundant items (1) (2) When disposing computers, all (CPU's) Central Processing Units must be sanitized (cleared off all viruses and the entity's confidential information) before disposal is done. Certification should be obtained from Information Technology division that the CPU's that are to be disposed are sanitized Motor vehicles must only be written off from the Fixed Asset Register once the write off Certificate has been issued. (3) Adisposal certificate or a contract must be issued once the disposal process is finalised, 21.3 Donations (1) 3) (4) Donations by any other office shall be approved by Accounting officer. Recommendations to donate shall be thoroughly motivated and the following information must ke addressed in the motivation. The disposal of redundant, obsolete or unserviceable assets shall be undertaken at least once a financial year if deemed necessary. Assets identified for disposal may be moved to a central point for disposal if this is more cost effective. The Disposal Committee should consist of at least three (3) members. One member may be from the component whose assets are to be disposed and a member from Supply Chain unit If disposal of any asset(s) is approved, any of the methods indicated below may, amongst others, be followed: @) transfer of assei(s) to another institution. b) transfer of assei(s) to another institution at market related value. ©) transfer of asset(s) to another institution free of charge (bearing in mind that the assets cannot be transferred to a sub-office, school, etc. without the approval of the Head Office of the institution under which jurisdiction of such sub-office, school, etc. falls) a7(5) (6) ” (6) (9) (10) ) selling of asset(s) per price quotation, competitive bid or auction, whichever is most advantageous to the State or ©) destroying such assets. All assets shall be transferred to another institution and record must be maintained of the transferred assets, Where computer equipment is to be disposed of. the relevant Department of Education shall be approached to make arrangements for free transfer of such assets to educational institutions before any other option is employed. Firearms may not be sold or donated to any person or institution within or outside the RSA without the approval of the National Conventional Arms Control Committee. Disposal of movable or immovable assets (excluding state housing for officials and political office bearers) shall be disposed at market related value by bid or auction, whichever is most advantageous to the entity, unless determined otherwise by the relevant treasury. Disposal of livestock shall be done in consultation with the Department of Agriculture. In cases where stores (inventory) items or assets are traded in for other stores items or assets, the highest possible trade-in price should be negotiated. The order placed should be for the comparative price, as charged against the vote. The actual value of the new item should, however, be reflected on the relevant register. 28SSeS 22. SUB-DELEGATIONS. SSS ee The Accounting Officer may in terms of Section 79 or 106 of the MFMA sub delegate any SCM Powers and duties as follows: The power to make a final award- . Above R10 million (Vat Included) may not be sub delegated by the Accounting Officer. Above R2 million (Vat Included) but not exceeding R10 million (Vat included) may be sub delegated but only to- i. The Chief Financial Officer (CFO) ii, A sonior manager, or iii. A BAC of which the CFO or a senior manager is a member, * Not exceeding R2 million (Vat included) may be sub delegated: i. A senior manager, ii, To a manager directly accountable to the CFO or a senior manager, or a BAC. A written report must within fifteen (18) days of the end of each month be submitted- (a) to the Accounting Officer, in the case of an award by- () The CFO; Gi) A senior manager; (ii) A BAC of which the CFO or a senior manager is a member, or (b) to the CFO or a senior manager responsible for the relevant bid, in case of an award by- () A manager directly accountable to the CFO: or (i) A BAC of which the CFO or a senior manager is not a member. aS 23. PROCUREMENT OF GOODS NECESSITATING SPECIAL SAFETY ARRANGEMENTS —————_—_——— eee SS EEL 23.1 The acquisition and storage of goods in bulk (other than water), which necessitate special safety arrangements, including gasses end fuel, should be avoided wherever possible. 23.2 Where the storage of goods in bulk is justified, such justification must be based on sound reasons, including the total cost of ownership, cost advantages and environmental impact and must be approved by the Accounting Officer. 24, PROUDLY SA CAMPAIGN 24.1 The Municipality or municipal entity supports the proudly SA Campaign to the extent that, all things being equal, preference is given to procuring local goods and services from: () Firstly suppliers and businesses within the municipality or district; (i) Secondly — suppliers and businesses within the relevant province; (ii) Thirdly ~ suppliers and businesses within the Republic of South Africa. 29eee 25. APPOINTMENT OF CONSULTANT ————————— ————_ EEE 28.1 The purpose of this Chapter is to explain the procedures for selecting, contracting, and monitoring consultants required for projects. These procedures do not apply to general services such as construction works, manufacture of goods, operation and maintenance of facilities or plants, surveys, exploratory drilling, aerial photography, satelite imagery, catering, cleaning and security in which the physical aspects of the activity predominate. 25.2 Appointment of consultants for projects related to the construction industry must be in accordance with the prescripts of the Construction Industry Development Board. 29.3 It must be clearly pointed out that the appointment of Transaction Advisors in respect of public-private partnerships or part thereof should be done in terms of the provisions of Section 120 of the MFMA and the municipal PPP Regulations. 25.4 For the purpose of this policy, the term consultant includes, among others, consulting firms, Management firms, procurement agents, inspection agents, auditors, other multinational organisations, investment and merchant banks, universities, research agencies, government agencies, non-governmental organisations (NGOs) and individuals. 25.5 Accounting officers may use these organisations as consultants to assist in a wide range of activities such as policy advice, accounting officer's reform management, financial services, Procurement services, social and environmental studies and identification, preparation and implementation of projects to complement accounting officers’ capabilities in these areas. 25.6 Consultants should only be engaged when the necessary skills and/or resources to perform a project/duty/study are not available and the accounting officer cannot be reasonably expected either to train or to recruit people in the time available. 25.7 Consultancy services must be procured through competitive bids if- (2) The value of the contract exceeds R200 000 (Vat included); or (b) The duration period of the contract exceeds one year. 25.8 In addition to any requirements prescribed by this policy for competitive bids, bidders must furnish particulars of - (2) All consultancy services provided to an organ of state in the last five (5) years; and (b) Any similar consultancy services provided to an organ of state in the last five years. 25.9 No advisor will take any part in the final decision- meking process regarding the award of bids. 25.10The Accounting Officer must ensure that copyright in any document produced, and the Patent rights or ownership in any plant, machinery, thing. system or process designed or devised, by a consultant in the course of the consultancy services is vested in the municipal entity. 25.11 The relationship between the accounting officer and the consultant should be one of Purchaser/supplier and not employer/employee. The work undertaken by a consultant should be regulated by a contract. 3025.12 The accounting officer is, however, responsible for monitoring and evaluating contractor performance and outputs against project specifications and targets and should take remedial action if performance is below standard. 25.13 Applicability of Procedures 25.13.1 In procuring consulting services, the accounting officer should satisfy himself/herself that: @) the procedures to ve used will result in the selection of consultants who have the necessary professional qualifications; b) the selected consultant will carry out the assignment in accordance with the agreed schedule, and c) the scope of the services is consistent with the noeds of the project; and 25.14 General Approach 25.14.1 The accounting officer should be responsible for preparing and implementing the project. for selecting the consultant, awarding and subsequently administering the contract. 25.14.2 While the specific rules and procedures to be followed for selecting consultants depend on the circumstances of the particular case, at least the following four major considerations should guide the accounting officer's policy on the selection process: a) the need for high-quality services; b) the need for economy and efficiency: ¢) the need to give qualified consultants an opportunity to d) compete in providing the services; and €) the importance of transparency in the selection process. 2514.3. In the majority of cases, these considerations can best be addressed through competition among firms in which the selection is based both on the quality of the services to be rendered and on the cost of the services to be provided (Quality- and Cost-Based. However, there are cases when QCBS is not the most appropriate method of selection, For complex or highly specialized assignments or those that invite innovations, selection based on the quality of the proposal alone (Quality-Based Selection [QBS]), would be more appropriate. 25.14.4 When appropriate, the accounting officer may include under the special conditions of contract, the following or similar condition: “A service supplier may not recruit or shell not attempt to recruit an employee of the principal for purposes of preparation of the bid or for the duration of the execution of this contract or any part thereof” 26.18 Conflict of Interest 25.15.1 Consultants are required to provide professional, objective and impartial advice and at all times hold the client's interests paramount, without any consideration for future work and strictly avoid conflicts with other assignments or their own corporate interests. 312.15.2 25.153 25.15 Consultants should not be hired for any assignment that would be in conflict with their prior or current obligations to other clients, or that may place them in a position of not being able to carry out the assignment in the best interest of the State. Without limitation on the generality of this rule, consultants should not be hired under the following circumstances: @) A firm, which has been engaged by the accounting officer to provide goods or works for a project and any of its affliates, should be disqualified from providing consulting services for the same project. Similarly, a firm hired to provide consulting services for the preparation or implementation of a project and any of its affiliates, should be disqualified from subsequently providing goods or works or services related to the initial assignment (other than a continuation of the firm’s earlier consulting services as described below) for the same project, unless the various firms (consultants, contractors, or suppliers) b) are performing the contractor's obligations under a turkey or design-and-build contract; ©) Consultants or any of their affiliates should not be hired for any assignment that, by its nature, may be in conflict with another assignment of the consultants. As an example, consultants hired to prepare an engineering design for an infrastructure Project should not be engaged to prepare an independent environmental assessment for the same project, and 4) Consultants assisting a client in the privatization of public assets should not purchase, nor advise purchasers of such assets. Associations between Consultants 2.16.1 Consultants may associate with each other to complement their respective areas of 25.15.2 25.15.3 25.16 25.16.1 25.16.2 25.16.3 expertise, or for other reasons. Such an association may be for the long term (independent of any particular assignment) or for a specific assignment. The “association” may take the form of a joint venture or a sub consultancy. In case of a joint venture, all members of the joint venture should sign the contract and are jointly and severally liable for the entire assignment. Once the bids or Requests for Proposals (RFPs) from service suppliers are issued, any association in the form of joint venture or sub-consultancy among fims should be permissible only with the approval of the accounting officer or his/her delegate. Accounting officers should not compel consultants to form associations with any specific firm or group of firms, but may encourage associations with the aim to enhance transfer of skills. Promoting Government's Preferential Policies When consultants are appointed, the prescripts of the Preferential Procurement Regulations, 2001, must be adhered to. Training or Transfer of Knowledge and Skills If the assignment includes an important component for training or transfer of knowledge and skills, the Terms of Reference (TOR) should indicate the objectives, nature, scope 3225.16.4 25.17 25.17.41 25.17.2 25.17.3 and goals of the training programme, including details of trainers and trainees, skills to be transferred, time frames and monitoring and evaluation arrangements. The cost for the training programme should be included in the consultant's contract and in the budget for the assignment. Steps to follow when selecting consultants The four stages of solection a) Identify the approach; b) Invite bids/proposals; ©) Receive responses; and d) Evaluate responses. Other aspects of appointment (such as advertising, opening of proposals) are no different from those of supply and delivery of goods or other services. Each of the four stages above is described in the sections below. Identify the Approach Various approaches may be followed in selecting consultants. As stated earlier, in most instances, ‘Quality and cost based selection’ (QCBS) is recommended. However, other possibilities are: @) Quality based selection; b) Selection under a fixed budget: c) Least cost selection; and d) — Single source selection. In determining the most appropriate approach, it may be useful to ask: What sort of Consultancy do | require? Is it for: - An assignment that is not complex or Use ‘Quality and Cost specialised Based Selection’ (CBS) (a) Use ‘Quality-Based Selection’ (QBS) () A complex or highly specialized assignment, for which consultants are expected to demonstrate innovation in their proposals (for example, financial sector reforms) (i) An assignment that has a high downstream impact and requires the best available experts (for example, management studies of large government agencies) (i) An assignment that could be carried out in substantially different ways, hence proposals will not be comparable (for example, sector and policy studies in which the value of the services depends on the quality of the analysis) 33(b) @ (c) w (a) (8) @ Budget Based Selection This is for a simple assignment, which is precisely defined and the budget fixed. The RFQ should indicate the available budget and request consultants to provide their best technical and financial proposals in a separate envelope, within the budget. Functionality evaluation is carried out first and then the financial part. Proposals that exceed the indicated budget must be rejected. The consultant that provided the highest ranked technical Proposal must be selected and invited to negotiate the contract. Least Cost Selection This method is more appropriate to selection of consultants for assignments of a standard or routine nature (e.g. an audit, non-complex works) Potential suppliers may be obtained from the list of approved service suppliers. Technical evaluation is conducted and thereatter financial evaluation. Selection based on Consultants’ qualifications This is applicable for very small assignment, which does not justify for the preparation and evaluation of competitive proposals. Selection based on Potential suppliers may be obtained from the list of pre-qualified firms or from a list of panel. Single-source selection This selection does not provide the benefits of competition in regard to quality and cost and lacks transparency in selection and could encourage unacceptable practices. Therefore the above selection must be used in exceptional cases. Justification for single source selection must be examined in the context of the overall interests of the client and the project. Reasons for selecting this approach must be recorded and approved by accounting officer. On exceptional cases, the Guidelines on Hourly Fee Rates for Consultants must be used as issued by the DPSA. This approach may be used under the following circumstances: (i) Tasks that represents a natural continuation of previous work carried out by the firm. (i) Inan emergency operation (ili) For very small assignments. 3425.18 (iv) An assignment where only one firm is qualified or hes experience of exceptional worth for the assignment. (f) Selection of individual consultants This is applicable on assignments where: () Teams of personnel is not required (ii) Professional support is not required (iil) Experience and qualifications of the individual are the paramount requirement. Where co-ordination, administration or collective responsibility may become difficult because of the number of individuals, it will be advisable to employ a firm. (g) Selection of particular types of consultants () An Accounting officer may select a single source selection from an NGO, Banks, Auditors, etc subject to motivation. Invitation of bids/proposals, u ing QCBS 25.18.1The accounting officer should prepare the TOR. The scope of the services described 25.18.2 25.183 should be compatible with the available budget. The TOR should define clearly the task directive (methodology), objectives, goals and scope of the assignment and provide background information, including a list of existing relevant studies and basic data, to facilitate the consultants’ preparation of their bids. Time frames linked to various tasks should be specified, as well as the frequency of Monitoring actions. The respective responsibilities of the accounting officer and the consultant should be clearly defined. The evaluation criteria, their respective weights, the minimum qualifying score for funetionality and the values that will be applied for evaluation should be clearly indicated, The evaluation criteria should include at least the following: Consultant's experience relevent to assignment, (i) The quality of the methodology; (ii) The qualifications of key personnel; and (ii) The transfer of knowledge (where applicable). 25.18.4 25.18.5 25.18.6 In more complicated projects, provision may also be made for pre-bid briefing sessions or presentations by bidders as part of the evaluation process. A clear indication should be given of which preference point system in terms of the PPPFA and its associated Regulations will be applicable. Detailed information on the evaluation process should be provided by firstly incicating the ratio of percentage between functionality and price. The percentage for price should be determined taking into account the complexity of the assignment and the relative importance of functionality. The percentage for price should normally be determined and approved by the accounting officer or his/her delegate prior to finalising the TOR. 3525.18.7 25.18.8 25.18.9 25.19 If transfer of knowledge or training is an objective, it should be specifically outlined along with details of number of staff to be trained, etc.. to enable consultants to estimate the required resources, The TOR should list the services and surveys necessary to carry out the assignment and the expected outputs (for example reports, data, maps, surveys, etc), where applicable Evaluation criteria could be divided into sub-criteria. Preparation of a well-thought- through cost estimate is essential if realistic budgetary resources are to be earmarked The cost estimate should be based on the accounting officer's assessment of the resources needed to carry out the assignment such as staff time, logistical support and physical inputs (i.e. vehicles, laboratory equipment, etc). The cost of staff time should be estimated on a realistic basis for foreign and local personnel. The TOR should specify the validity period (normally 60 — 90 days).The TOR should form part of the standard bid documentation. At this stage the evaluation Panel, consisting of at least three members who where possible, are demographically fepresentative in terms of race, gender and expertise, should also be selected and finalised. Request for Proposals 26.19.1 This method should be followed where selection is based both on the quality of a proposal 25.20 25.20 and on the cost of the service through competition among firms. This method will be applicable on more complex projecis where consultants are requested and encouraged to propose their own methodology and to comment on the TOR in their proposals Preparation and issuance of ‘Request for Proposals’ (RFP) Receipt of Proposals The accounting officer should allow enough time for consultants to prepare their Proposals. The time allowed should depend on the assignment, but normally should not be less than four weeks or more than three months (for example, for assignments requiring establishment of a sophisticated methcdology, preparation of a multidisciplinary master plan). During this interval, the firms may request clarification about the information provided in the RFP. The accounting officer should provide clarification in writing and where necessary copy them to all firms who intend to submit proposals. If necessary, the accounting officer should extend the deadline for submission of Proposals. The technical and financial proposals should be submitted at the same time. No amendments to the technical or financial proposal should be accepted after the deadline. To safeguard the integrity of the process, the technical and financial proposals should be submitted in separate sealed envelopes. The technical envelopes should be opened immediately after the closing time for submission of proposals. The financial proposals should remain sealed until they are opened publicly in case of tenders. Any proposal received after the closing time for submission of proposals should be returned unopened. 3625.21 Evaluation of bids/proposals 2521.1 Within the ambit of the Preferential Procurement Regulations, 2001. bids/ proposals for the appointment of consultants should be evaluated on the basis of functionality and Price as well es the achievement of specified BEE goals. The evaluation should be carried out in two phases ~ first the functionality and then the price. The percentages allocated fer functionality should total to 100%. The ratio to be used for the division between functionality and price should be determined and approved by the accounting officer and should be made known up-front in the bid decuments. Score sheets should be prepared and provided to panel members to evaluate the bids on functionality. In view of impartiality, members of bid committees should not also act as Panel members. 25.21.2 The score sheet should contain all the criteria and the weight for each criterion as indicated In the TOR as well as the values to be applied for evaluation. Each panel member should after thorough evaluation award his/her own value to every criterion without discussing any aspect of any bid with any of the other members. Under no circumstances may additional evaluation criteria be added to those originally indicated in the bid documentation nor may the evaluation criteria be amended or omitted after closing of the bid. Score sheets should be signed by panel members and if required, written motivation could be requested from panel members in the event of vast discrepancies in the values awarded for each criterion, 25.22 Calculation of Percentage for Price The percentage scored for price should be calculated as follows: The lowest acceptable bid/proposal will obtain the maximum percentage allocated for price. The other bids/proposals with higher prices will proportionately obtain lower percentages based on the following formula: PtX Ap Ps = Pmin where Ps = percentage scored for price by bid/proposal under consideration Pmin = lowest acceptable bid/proposal Pt = price of bid/proposal under consideration Ap = percentage allocated for price 25.23 Contract Negotiations 25.23.1 The Accounting Officer may negotiate the contract only with the preferred bidder identified by means of the competitive bidding process. Negotiations should include discussions of the TOR, the methodology, staffing, accounting officer's inputs, and special conditions of the contract. These discussions should not substantially alter the original TOR or the terms of the contract, compromise the quality of the final product, its Cost, and the relevance of the initial evaluation. Major reductions in work inputs should Rot be made solely to meet the budget. The final TOR and the agreed methodology should be incorporated in “Description of Services.” which should form part of the contract. The selected firm should not be allowed to substitute key staff, unless both 3725.24 25.241 25.24.2, 25.25 25.25.1 25.26 Parties agree that undue delay in the selection process makes such substitution unavoidable or that such changes are critical to meet the objectives of the assignment. If this is not the case and if it is established that key staff were offered in the proposal without confirming their availabilty, the firm may be disqualified and the process Continued with the next ranked firm. The key staff proposed for substitution should have qualifications equal to or better than the key staff initially proposed. Contract Award Contract award According to the prescripts of the PPPFA and its Regulations, a contract may only be awarded to the bidder who scored the highest number of points, unless objective criteria justify the award to another bidder. Should this be the case, the accounting officer should be able to defend the decision not to award the bid to the bidder who scored the highest number of points in any court of law. It should be emphasizes that not offering any contributions to prescribed goals as contemplated in the Preferential Procurement Regulations, 2001, does not disqualify a bidder. Under these circumstances a bidder will score no points ‘or the specified goals. The accounting officer should award the contract, within the period of the validity of bids, to the bidder who meets the appropriate standards of capability and resources and whose bid has been determined to be substantially responsive to the bidding documents: and to be the highest on points. A bidder should not be required, as a condition of award, to undertake responsibilities for work not stipulated in the bidding documents or otherwise to modify the bid as originally submitted. Rejection of all proposals and reinvitation The accounting officer will be justified in rejecting all proposals only if all proposals are non-responsive and unsuitable, either because they present major deficiencies in complying with the TOR, or because they involve costs substantially higher than the original estimate. In the latter case, the feasibilty of Increasing the budget, or scaling down the scope of services with the firm should be investigated. The new process may include revising the RFP and the budget Evaluation of the Performance of Consultants 25.26.1 Consultants should observe due diligence and prevailing standards in the performance of 25.26.2 the assignment. The accounting officer should evaluate the performance of consultants appointed in a feir and confidential process. In the case of repeated poor performance, the firm should be notified and provided an opportunity to exolain the reasons for it and the remedial action proposed Consultants should be responsible for the accuracy and suitability of their work. Although accounting officers supervise and review the consultants’ work, no modifications should be made in the final documents prepared by the consultants without mutual agreement. In the case of supervision of works, consultants may have more or less authority to supervise, from full responsibility as an independent engineer, to that of advisor to the client with little authority to make decisions, as determined by the accounting officer and captured in the contract agreement between the accounting officer and the consultant. 3825.27. 25.27.1 2527.2 25.27.3 25.27.4 25.27.5 Types of Contracts for Consultants Lump Sum (Firm Fixed Price) Contract: Lump sum contracts are used mainly for assignments in which the content and the duration of the services and the required Output of the consultants are clearly defined. They are widely used for simple planning and feasibility studies, environmental studies, detailed design of standard or common structures, preparation of data processing systems, and so forth. Payments are linked to outputs (deliverables), such as reports, drawings, bills of Quantities, bidding documents and software programs. Lump sum contracts are easy to administer because payments are due on clearly specified outputs. Time-Based Contract: This type of contract is appropriate when it is difficult to define the scope and the length of services, either because the services are related to activities by others for which the completion period may vary, or because the input of the consultants fequired to attain the objectives of the assignment is difficult to assess. This type of contract is widely used for complex studies, supervision of construction, advisory services, and most training assignments. Payments are based on agreed hourly, daily weekly, or monthly rates for staff (who are normally named in the contract) and on reimbursable items using actual expenses and/or agreed unit prices. The rates for staff include salary, social costs, overheads, fees (or profit), and, where appropriate, special allowances. This type of contract should include a maximum amount of total payments to be made to the consultants. This ceiling amount should include a contingency allowance for unforeseen work and duration and provision for price adjustments, where appropriate. Tims-based contracts need to be closely monitored and administered by the client to ensure that the assignment is proaressing satisfactorily and payments claimed by the consultants are appropriate. Again the Guidelines on fees for Consultants issued by the Department of Public Service and Administration should be used as a benchmark to establish the appropriate tariffs, or to determine the reasonableness of the tarifis. Retainer and/or Contingency (Success) Fee Contract: Retainer and contingency fee contracts are widely used when consultants (banks or financial firms) are preparing companies for sales or mergers of firms, notably in privatization operations. The remuneration of the consultant includes a retainer and a success fee, the latter being normally expressed as a percentage of the sale price of the assets. Percentage Contract: These contracts are commonly used for architectural services. ‘They may be also used for procurement and inspection agents. Percentage contracts directly relate the fees paid to the consultant to the estimated or actual project Construction cost, or the cost of the goods procured or inspected. The contracts are negotiated on the basis of market norms for the services and/or estimated staff-month costs for the services, or competitive bid. It should be borne in mind that in the case of architectural or engineering services, percentage contracts implicitly lack incentive for economic design and are hence discouraged. Therefore, the use of such a contract for architectural services is recommended only if it is based on a fixed target cost and covers precisely defined services (for example, not works supervision) Indefinite Delivery Contract (Price Agreement): These contracts are used when accounting officers need to have “on call’specialized services to provide advice on a 3926,28 25.281 Particular activity, the extent and timing of which cannot be defined in advance. These are commonly used to retain “advisers” for implementation of complex projects (for example, dam panel), expert adjudicators for dispute resolution Panels, accounting officers’ reforms, procurement advice, technical troubleshooting, and So forth, normally for a period of a year or more. The accounting officer and the firm agree on the unit rates to be paid for the experts and payments are made on the basis of the time actually used, Important Provisions for Contracts with Consultants Currency. RFPs should clearly state that firms must express the price for their services, in Rand. If the consultants wish to express the price as a sum of amounts in different foreign currencies, they may do so, provided that the accounting officer concurs with this practice and that the proposal includes no more than three foreign currencies outside the Dorders of South Africa. The accounting officer should require consultants to state the Portion of the price fepresenting local costs in Rand. Payment under the contract should be made in the currency or currencies expressed in the formal contract. 25.28.2 Price Adjustment. To adjust the remuneration for foreign and/or local inflation, a price 25.28.3 Payment Provisions. Payment pro 25.28.4 25.28.5 adjustment provision should be included in the contract if its duration is expected to exceed 12 months. Exceptionally, contracts of shorter duration may include a provision for price adjustment when local or foreign inflation is expected to be high and unpredictable. ions, including amounts to be paid, schedule of Payments, and payment procedures, should be agreed upon during negotiations. Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts). Payments for advances (for example, for mobilization costs) exceeding 10 percent of the contract amount should normally be backed by advance payment securities. Payments should be made promptly in accordance with the contract provisions. To that end, consultants can be paid directly by the accounting officer; only disputed amounts should be withheld, with the remainder of the invoice paid in accordance with the contract; and - the contract should provide for the payment of financing charges if payment is delayed due to the client's fault beyond the time allowed in the contract. The rate of charges should be specified in the contract. Bid and Performance Securities. Bid and performance securities are not recommended for consultants’ services. Their enforcement is often subject to judgement calls, they can be easily abused and they tend to increase the costs to the consulting industry without evident benefits, which are eventually passed on to the accounting officer. Accounting officer's contribution. The accounting officer normally assigns members of his/her professional staff to the assignment in different capacities. The contract between the accounting officer and the consultant should give the details governing such staff, known as counterpart staff, as well as facilities that should be provided by the accounting officer, such as housing, office space, secretarial support, utilities, materials and vehicles. The contract should indicate measures the consultant can take if some of the items cannot be provided or have to be 40withdrawn during the assignment and the compensation the consultant will receive in such a case. 25.286 Conflict of Interest. The consultant should not receive any remuneration in connection with the assignment except as provided in the contract. The consultant and its affiiates should not engage in consulting activities that conflict with the interests of the client under the contract, and should be excluded from downstream supply of goods or construction of works or purchase of any asset or provision of any other service related to the assignment other than a continuation of the “Services” under the ongoing contract 2528.7 Professional Liability. The consultant is expected to carry out its assignment with due diligence and in accordance with prevailing standards of the profession. As the Consultant's liability to the accounting officer will be governed by the applicable law, the contract need not deal with this matter unless the parties wish to limit this liability. If they do so, they should ensure that « there should be no such limitation in case of the consultant's gross negligence or wilful misconduct; the consultant's liability to the accounting officer in no case be limited to less than the total payments expected to be made under the consultant's contract, or the proceeds the consultant is entitled to receive under its insurance, whichever is higher; and any such limitation may deal only with the consultant's liability toward the client and not with the consultant's liability toward third parties 2528.8 Staff Substitution. During an assignment, if substitution is necessary (for example, because of ill health or because a staff member proves to be unsuitable), the consultant should propose other staff of at least the same level of qualifications for approval by the accounting officer. Applicable Law and Settlement of Disputes. The contract should include provisions dealing with the applicable law and the forum for the settlement of disputes. Should it not be possible to settle a dispute by means of mediation, the dispute may be settled in a South African court of law. 25.29 Modifications of Contract! Variation 25.29.1 Any granting of a substantial extension of the stipulated time for performance of a contract, agreeing to any substantial modification of the scope of the services. substituting key staff, waiving the conditions of a contract, or making any changes in the contract that would in aggregate increase the original amount of the contract by more than 15 percent, will be subject to the approval of the accounting officer or his / her delegate 26.30 Disbursements. Payment of Service Providers 25.30.1 The responsibility for the implementation of the project, and therefore for the payment of consulting services under the project, rests solely with the accounting officer. 25.31 Confidentiality 25.31.1 The process of proposal evaluation is confidential until the contract award is notified to the Successful firm. Confidentiality enables the accounting officer to avoid either the reality oF perception of Improper interference. If, during the evaluation process, consultants wish to bring additional information to the notice of the accounting officer, they should do so in writing. 425.31.2 If consultants wish to raise issues or questions about the selection process, they should communicate directly in writing with the accounting officer in this regard. All such communications should be addressed to the head of the department / division for the relevant sector for the accounting officer. 25.31.3 Communications that the accounting officer receives from consultants after the opening of the technical proposals should be handled as follows: 2531.4 In the case of contracts any communication should be sent fo the accounting officer for due consideration and appropriate action. If additional information or clarification is required from the consultant, the accounting officer should obtain it and comment on or incorporate it, as appropriate, in the evaluation report. 25.32 Debriefing 25.32.1 If after notification of award, a consultant wishes to ascertain the grounds on which its Proposal was not selected, it should address its request in writing to the accounting officer. if the consultant is not satisfied with the explanation given by the accounting officer, the consultant may refer this matter to the relevant treasury, Public Protector or court of law. SS 26. NEGOTIATIONS WITH PREFERRED BIDDERS. ———— i 26.1 The Accounting Officer may negotiate the final terms of a contract with bidders identified through a competitive bidding process as preferred bidders, provided that such negotiations- (2) Does not allow any preferred bidder a second or unfair opportunity; (b) Is not to the detriment of any other bidder. and (c) Does not lead to a higher price than the bid as submitted. 26.2 Minutes of such negotiations must be kept for record purposes. e==——————— 27. DEVIATION FROM, AND RATIFICATION OF MINOR BREACHES OF, PROCUREMENT PROCESSES a eee 27.1 The Accounting Officer may — (@) Dispense with the official procurement processes established by this policy and to procure any required goods or services through any convenient process, which may include direct negotiations, but only — (i) Inan emergency. (il) If such goods or services are produced or available from a single provider only: (ii) In any other exceptional case where it is impractical or impossible to follow the Official procurement processes; and 42(b) Ratify any minor breaches of the procurement processes by any official or committee acting in terms delegated powers or duties which are purely of a technical nature 27.2 The Accounting Officer may record the reasons for any deviations in terms of subparagraph (1) (@) and (b) of this policy and report them to the next meeting of the council and includes as a note to the financial statement. SSeS 28. UNSOLICITED BIDS —_— ee (1) (2) (3) (4) (7) 8) In accordance with section 113 of the Act there is no obligation to consider unsolicited bids received outside a normal bidding process. The Accounting Officer may decide in terms of section 113(2) of the Act to consider an unsolicited bid, only if- @. The product or service offered in terms of the bid is a demonstrably or proven unique innovative concept; b. The product or service will be exceptionally beneficial to, or have exceptional cost advantages; ¢. _ The person who made the bid is the sole provider of the product or services; and d. The reasons for not going through the normal bidding processes are found to be sound by the accounting officer. If the Accounting Officer decides to consider an unsolicited bid that complies with ‘subparagraph (2) of this policy, the decision must be made public in accordance with section 21A of the Municipality System Act, together with- (a) Reasons as to why the bid should not be open to other competitors; (t) An explanation of the potential benefits if the unsolicited bid were accepted: and (©) An invitation to the public or other potential suppliers to submit their comments within 30 days of the notice. All writlen comments received pursuant to subparagraph (3), including any responses from the unsolicited bidder, must be submitted to the National Treasury and the relevant provincial treasury for comment. The adjudication committee must consider the unsolicited bid and may award the bid or make recommendation to the Accounting Officer, depending on its delegations. A meeting of the adjudication committee to consider an unsolicited bid must be open to the public. ‘When considering the matter, the adjudication committee must take into account- (a) Any comments submitted by the public; and (b) Any written comments and recommendations of the National Treasury or the relevant Provincial Treasury. |f any recommendations of the National Treasury or Provincial Treasury are rejected or not followed, the Accounting Officer must submit to the Auditor General, the relevant provincial 43{reasury and the National Treasury the reasons for rejecting or not following those recommendations. (9) Such submission must be made within seven days after the decision on the award of the unsolicited bid is taken, but no contract committing the Municipality or municipal entity to the bid may be entered into or signed within 30 days of the submission SS 29. IRREGULAR, FRUITLESS OR WASTEFUL EXPENSES: SS S880 29.1 Irregular Expenditure (a) © (a) Expenditure incurred by a municipality or municipal entity in contravention of, or that is not in accordance with, a requirement of the Act, and has not been condoned in terms of section 170; Expenditure incurred by a municipality or municipal entity in contravention of, or that is not in accordance with, a requirement of the Municipal Systems Acts, and which has Not been condoned in terms of that Act; Expenditure incurred by 2 municipality or municipal entity in contravention of, or that is not in accordance with, a requirement of the Public Office-Bearers Act 1998 (Act No. 20 of 1998); or Expenditure incurred by a municipality or municipal entity in contravention of, or that is ot in accordance with, a requirement of the supply chain management policy, and which has not been condoned in terms of such policy or by-law, but excludes expenditure ky @ municipality which falls within the definition of “unauthorised expenditure"; 29.2 Fruitless and Wasteful Expenditure (@) () Expenditure that was made in vain and could have been avoided had reasonable care been exercised; ‘The Accounting Officer must promptly inform the mayor, the MEC for local government in the province and the Auditor General, in writing, of — (Any unauthorised, iregular or fruitless or wasteful expenditure incurred by the municipality; (ii) Whether any person is responsible or under investigation for such unauthorised, irregular or fruitless or wasteful expenditure; and {ill) The steps that have been taken to recover or rectify such expenditure; and to prevent a recurrence of such expenditure. 44eee 30. TWO ~ STAGE BIDDING PROCESS ——SSSS&»—_—_ (1) A twoo - stage bidding is allowed for- (a) Large complex projects; (b) Projects where it may be undesired to prepare complete detailed technical specifications: or (©) Long term projects with a duration period exceeding three years. (2) In the first stage technical proposals on conceptual design or performance specfications should be invited, subject to technical as well as commercial clarifications and adjustments. (3) _ Inthe second stage final technical proposals and priced bids should be invited eee 31. PROCUREMENT OF BANKING SERVICES. ———L—EEEEEE (1) Banking services- (a) Must be procured through compelitive bids; (b) Must be consistent with Sections 7 or 85 of the Act; and (©) May not be fora period of more than five years at a time (2) The process for procuring @ contract for banking services must commence at least nine (9) months before the end of an existing contract. (3) The closure date for the submission of bids may not be less than 60 days from the date on Which the advertisement is placed in a newspaper in terms of paragraph 22(1), Bids must be restricted to banks registered in terms of the Banks Act, 1990 (Act No. 94 of 1990), eS 32, PROCUREMENT OF IT RELATED GOODS OR SERVICES S——_—_—_—_—_————— SS (1) The Accounting Officer may request the State Information Technology Agency (SITA) to assist with tho acquisition of IT related goods or services through a competitive bidding process, (2) Both parties must enter into a written agreement to regulate the services rendered by, and the payments to be made to, SITA (3) The Accounting Officer must notify SITA together with a motivation of the need if- (a) The transaction value of IT related goods or services required in any financial year will exceed R50 million (VAT included); or (©) The transaction value of a contract to be procured whether for one or more years exceeds R50 million (VAT included). (4) If SITA comments on the submission and the municipal entity disagree with such comments, the comments and the reasons for rejecting or not following such comments must be submitted to the council, the National Treasury, the relevant provincial treasury and the Auditor General. 4538, PROCUREMENT OF GOODS AND SERVICES UNDER CONTRACTS SECURED BY OTHER ORGANS OF STATE ss ee (1) The Accounting Officer may procure goods or services under a contract secured by another organ of state, only if- (@) The contract has been properly arranged and secured by that other organ of that other state by means of a system that is fair, equitable, transparent, competitive and cost- effective; (b) The participating institution procures the required goods or services under the same or More beneficial terms and conditions as provided for in the original contract; (©) That TEDA and the participating institution and the provider have consented to such procurement in writing. (4) The participating institution concludes a separate service level agreement which clearly stipulates the duration of the contract with particular emphasis on the start and end date which shall not be later than the end date of the original contract (2) Subparagraph (1)(c) and (d) do not apply if- (2) A municipal entity procures goods or services through a contract secured by its parent municipality; or (b) A municipality procures goods or services through a contract secured by a municipal entity of which it is the parent municipality, 34. COMBATING OF ABUSE OF SUPPLY CHAIN MANAGEMENT SYSTEM Sees 54.1 The following measures are established to combat the abuse of the supply chain management system, which must stipulate the following; (1) The Accounting Officer must- (a) Take all reasonable steps to prevent abuse of the supply chain management system; (b) Investigate any allegations against an official or other role player of fraud, corruption, favoritism, unfair or irregular practices or failure to comply with this supply chain management policy, and when justified (i) Take appropriate steps against such official or other role player: or (ii) Report any alleged criminal conduct to the South African Police Services; 46(©) Check the National Treasury's data base prior to awarding any contract to ensure that no recommended bidder, or any of its directors, is listed as a person Prohibited from doing business with public sector, (4) Reject any bid from a bidder- (If any municipal rates and taxes or municipal services charges owed by that bidder or any of its directors to the municipal entity, or to any other municipal entity are in arrears for mere than three months; or (ii) Who during the last five years has failed to perform satisfactorily on a Previous contract with the municipality or municipal entity or any other organ of state after written notice was given to that bidder that performance was unsatisfactory; (©) _ Reject a recommendation for the award of a contract if the recommended bidder, or any of its directors, has committed a corrupt or fraudulent act in competing for the particular contract; (Cancel a contract awarded to a person if - () The person committed any corrupt or fraudulent act during the bidding Process or the execution of the contract; or (i) An official or other role player committed any corrupt or fraudulent act during the bidding process or the execution of the contract that benefited that person; and (@) _ Reject the bid of any bidder if that bidder or any of its directors — () Has abused the supply chain management system of the municipal entity or has committed any improper conduct in relation to such system. (i) Has been convicted for fraud or corruption during the past five years. (il) Has witfully neglected, reneged on or failed to comply with any government, municipal or other public sector contract during the past five years; or (iv) Has been listed in the Register for Tender Defautters in terms of section 29 of the Prevention and Combating of Corrupt Activities Act (No12 of 2004) (h) _ No official shall engage in contact with @ supplier in respect of quotation or tender which the supplier intended to submit except where clarification of requirements is required trom either party. Any such communication must be recorded and appropriately filed with the bid documentation 2. The Accounting Officer must inform National Treasury and relevant provincial treasury in writing of any actions taken in terms of subparagraphs (1) (b) (il), (e) oF (f) of this Policy. 47ee 35. LOGISTICS, DISPOSAL, RISK AND PERFORMANCE MANAGEMENT _——S]SSSKAE_E_——— 36.1 Logistics Management (a) (b) The Accounting Officer must establish and implement an effective system of logistics which an effective system of logistics management must include the following ~ @ (iy (i) w “) () (vii) (viii) The coding of items to ensure that each item has a unique number for the Purposes of monitoring spending patterns on types or classes of goods and services; The setting of inventory levels that include minimum and maximum levels and lead times where goods are placed in stock; Placing of manual or electronic orders for all acquisitions other than petty cash; Certify that goods and services are delivered or rendered on time: Before payment is approved, certify that the goods and services received are in accordance with the order, the general conditions of contract and specifications where applicable and that the price charged is as quotad/in terms of @ contract; Ensure appropriate standards of internal control and warehouse management are in place to ensure goods placed in stores are secure and only used for the Purpose they were purchased; Ensure thai all assets including official vehicles are properly managed, appropriately maintained and only used for official purposes; and Monitor and review vendors performance to ensure compliance with specifications and contract conditions for a particular goods or service. Annual Stock taking Procedures @ wo (iii) (w) The last month of the financial year all stores of logistics management close for year - end inventory counts. Stores are scheduled to be counted on specific dates during the last month. All stores counted in a specific period are blocked from any transaction (issues and receipts) during the counting period. After the computer system has been updated, a physical inventory document is Printed from the computer system for each store. This document contains stock ‘number, bin number, storage location and complete description and a column for the count. The person conducting the inventory counts all items and makes appropriate notations on the inventory sheet. At the conclusion of each storage location per store the person dates and signs the inventory sheet. The physical counted figures as per (ii) are captured on the computer system. The computer system generates a “different report” that indicates all the discrepancies between the physical count and the actual inventory as indicated ‘on the system. All discrepancies are double checked and investigated. The AC (Accounting Officer) will make appropriate adjustments to correct the inventory 48(o) records to the actual count. The CFO (Chief Financial Officer) will approve the report regarding all adjustments made. (¥) All printouts, original documents, work papers, adjustments and corrected inventory printouts are placed on file in the stock control section, (Vi) An emergency procedure oxists to issue inventory during the stock take period. Reporting on Stock Stores shoul provide a monthly report, which must include information relating to: (Total value of monthly issues; (ii) Usage by the business units; (ii) Average stock holding; (iv) Price structure; (v) Expenditure by commodity group: (vi) Expenditure by suppliers for stock replenishment: (vil) Outstanding deliveries. 35.2 Disposal Management (a) (b) (© (a) The criteria for the disposal or letting of assets, including unserviceable, redundant or obsolete assets, subject to section 14 and 90 of the Act: The disposal of assets must be by one of the following methods - (Transferring the asset to another organ of state in terms of a provision of the Act enabling the transfer of assets; (i) Transferring the asset to another organ of state at market related value or, when appropriate, free of charge; (ii) Selling the asset; or (iv) Destroying the asset; provided that - ()) Movable assets may be sold either by way of written price quotations, a competitive bidding process, auction or at market related prices, whichever is the most advantageous to the municipality Gi) In the case of the free disposal of computer equipment, the provincial department of education must first be approached to indicate within 30 days whether any of the local schools are interested in the equipment: and (ii) In the case of the disposal of firearms, the National Conventional Arms Control Committes has approved any sale or donation of firearms to any person or institution within or outside the Republic; furthermore ensure that - () Immovable property is let at market related rates except when the public interest or the plight of the poor demands otherwise; 49(e) (i) All fees, charges, rates, tarifis, scales of fees or other charges relating to the letting of immovable property are annually reviewed; and Ensure that where assets are waded in for other assets, the highest possible trade-in price is negotiated 36.3 Risk Management (a) (o) © Responsibility of risk management — @ iii) (iv) The Accounting Officer shall ensure that TEDA has and maintains and effective system of risk management for the identification, consideration and avoidance of potential risk in the SCM system; Aspects of risk management shall be allocated to the Chief Financial Officer, the SCM practitioners, the Internal Audit Function and the Audit Committee, each of which shall ultimately be accountable to the Accounting Officer or the Board for the discharge of their responsibilities; Risk management in SCM is a key responsibility of the accounting officer who should receive advice thereon from the internal audit function and the Audit Commitee; Risk management in SCM is however, a continuous and proactive process that relates to all organisational activities at all levels. All Supoly Chain Management practitioners must have a thorough understanding of the risk involved in the activities under their control and actively and pro-actively work towards managing these risks. Each practitioner has a responsibility towards risk management. Elements of risk management: @ Assessing the nature and extent of the risk associated with the TEDA operations; (i) Deciding on an acceptable level of loss or degree of failure; (il) Deciding now to manage minimize imitigate the risk; (iv) Monitoring, reporting and from time to time re-assessing the level and implications of risk exposure. Guarantees: () Performance guarantees should be commensurate with the degree of contractual risk to which the TEDA is exposed: (i) In case of large and complex contracts, it is advisable to call for bid guarantees to prevent the submission of irresponsible bids; (iii) Performance guarantees should spread the cost of the risk of failure between the Contracting parties and should be set at such a level that all the TEDA costs relating to such failure aro likely to be recovered; (iv) It would be prudent to make adequate provisioning in all engineering and (vy) construction works contracts to ensure that monies are available to rectify defects; and Performance bonds in engineering and construction works contracts should be waived in low value, low risk contracts or where a third party carries the risk of failure in an acceptable manner. 35.4 Supply Chain Performance 5036-4.1TEDA must submit to the National Treasury, Provincial Treasury and the Auditor- General such Supply Chain Management information as they may require and in such format and at such intervals as specified, TEDA will implement an information gathering, recording reporting and performance measurement system to faclitate the above and to promote good governance; (2) Management Information () From the gathered information the prescribed external and internal ‘management reports must be compiled and distributed, (b) Performance Measurement {) The SCM department is responsible to measure TEDA progress regarding the achievement of the goals by using the predetermined criteria. The results of this measurement will then be included in extemal and internal reports as prescribed; (©) Record Keeping (In achieving of predetermined targets TEDA must gather as much information as possible on a continuous basis to adapt to the ‘changing environment and Government's reporting ‘requirements pertaining to SCM; () Keeping complete records pertaining to supply chain management will assist TEDA in their performance monitoring and reporting role: (i) Apart trom records, TEDA should also maintain a proper filing system per case; (d) Record keeping system () The necessary information, to satisfy the internal and external reporting requirements, has to be kept in an ordery manner. The gathering of information and recording system must provide for the type of information required, deadiines and the allocation of duties and responsibilities; (il) It should be noted that record keeping does not replace the normal filing system that contains the hard copy of each case; (ti) The necessary records can be maintained either manually or electronically and does not have to be a formal register. As such a list or spreadsheet wilt surface; information can be incorporated into a single record where Possible. The consolidation of the required returns and forwarding thereof has to be allocated to the responsible person or section. (e) Records to be kept () Record of verbal and written quotations and formal written quotations (ii) List of bid documents issued (i) Record of ad hoc bids (iv) Record of Specific Term Contracts (v) Record of deviation processes (vi) Record of complaints received from bicders or contractors (vil) Record of declaration of interest (vil) Record of gifts received 51(ix) Record of instances of fraud of corruption (x) _ Record of irregular, fruitless and wasteful expenditure (xi) Record of circulars distributed within TEDA. 36. OTHER MATTERS - PROHIBITION ON AWARDS TO PERSONS WHOSE TAX MATTERS ARE NOTIN ORDER 1. The Accounting Officer must ensure thal, irrespective of the procurement process followed, fg ward above R15 000 is given to a person whose tax matters have not been declared by the South African Revenue Services to be in order. 2. The Accounting Officer must ensure that the bidder's tax matter have been declared to be in order by SARS prior to award(s). 37. INDUCEMENTS, REWARDS, GIFTS AND FAVOURS TO (MUNICIPALITIES OR MUNICIPAL ENTITIES), OFFICIALS AND OTHER ROLE PLAYERS 1. No person who is a provider or prospective provider of goods or services. or a recipient or Prospective recipient of goods disposed or to be disposed of may either directly or through a representative or intermediary promise, offer or grant - (a) Any inducement or reward to the Municipality or municipal entity for or in connection with the award of a contract; or (6) Any reward, git, favour or hospitality to- (i) Any offical; or (ii) Any other role players involved in the implementation of the supply chain management policy. The Accounting Officer must promptly report any alleged contravention of sub paragraph (1) fo tho National Treasury for considering whether the offending person, and. any representative or intermediary through which such person is alleged to have acted, should be listed in the National Treasury's database of persons prohibited from doing business with the public sector. Subparagraph (1) does not apply to gifts less than R350 in value. SSeS 38. SPONSORSHIP SSS The Accounting Officer must promptly disclose to the National ‘Treasury and the relevant Provincial Treasury any sponsorshio promised, offered or granted, whether directly or through a representative or intermediary, by any person who is - () A provider or prospective provider of goods or services; or (®) A recipient or prospective recipient of goods disposed orto be disposed 52eee 39. OBJECTIONS AND COMPLAINTS =—a—————__————— Persons aggrieved by decisions or actions taken in the implementation of this supply chain management system, may lodge within 14 days of the decision or action, a written objection or complaint against the decision or action. SS 40. RESOLUTION OF DISPUTES, OBJECTIONS, COMPLAINTS AND QUERIES =—ooooojjjSEEEE=— 1. The Accounting Officer must appoint an independent and impartial person, not directly involved in the supply chain management processes- (@) To assist in the resolution of disputes between the municipality or municipal entity and other persons regarding- Any decisions or actions taken in the implementation of the supply chain management system; or Any matter arising from a contract awarded in a course of the supply chain management system; or (b) To deal with objections, complaints or queries regarding any such decisions or actions oF any matter arising from such contract decisions or actions or any matters arising from such contract. 2 The Accounting Officer, or another official designated by the Accounting Officer, is responsible for assisting the appointed person to perform his or her functions effectively. 3. The person appcinted must - (2) Strive to resolve promptly all disputes, objections, complaints or queries (©) Submit monthly reports to the Accounting Officer on all disputes, objections, complaints Or queries received, attended to or resolved. 4 Adispute, objection, complaint or query may be referred to the relevant provincial treasury if- (@) The dispute, objection. Complaint or query is not resolved within 60 days; or (b) No response is forthcoming within 60 days 5. If the provincial treasury does not or cannot resolve the matter, the dispute, objection, complaint or query may be referred to the National Treasury for resolution 6. This paragraph must not be read as affecting a person's rights to approach a court at any time. oe 41. CONTRACTS PROVIDING FOR COMPENSATION BASED ON TURNOVER It a Service provider acts on behalf of a municipality or municipal entity to provide any service or act as a collector of fees, service charges or taxes and the compensation payable to the service or the emount collected; the contract between the service provider and the municipality or municipal entity must stipulate - 53(2) A cap on the compensation payable to the service provider: and (0) That such compensation must be performance based, eee 42. ETHICAL STANDARDS AND DECLARATION OF INTEREST SESS 1. A code of ethical standards is hereby established, in accordance with subparagraph (2), for officials anc other role players in the supply chain management system in order to promote. (a) (b) Mutual trust and respect; and An environment where business can be conducted with integrity and in a fair and reasonable manner. 2, An official or other role player involved in the implementetion of the supply chain management policy - fa) (b) (c) (@) (e) @ (hy Must treat all providers and potential providers equitably; May not use his or her position for private gain or to improperly benefit another person: May not accept any reward, aif, favour, hospitality or other benefit directly or indirectly, including to any close family member, partner or associate of that person, of a value more than R350; Notwithstanding subparagraph (2)(c), must declare to the Accounting Officer details of any reward, git, favour, hospitality or other benefit promisea, offered or granted to that Person or to any close family member, partner or associate of that person: Must declare to the Accounting Officer details of any private or business interest which that person, or any close family member, partner or associate, may have any proposed Procurement or disposal process of, or in any award of a contract by, the ¢ municipal entity; Must immediately withdraw from participating in any manner whatsoever in a Procurement or disposal process or in the award of a contract in which that person, or any close family member, partner or associate, has any private or business interest Must be scrupulous in his or her use of property belonging to r municipal entity: Must assist the Accounting Officer in combating fraud, corruption, favoritism and unfair and irregular practices in the supply chain management system: and Must report to the Accounting Officer any alleged irregular conduct in the Supply chain mmanagement system which that person may become aware of, including. Any alleged fraud, corruption, favoritism or unfair conduct; Any alleged contravention of paragraph 47(1) of this policy; or Any alleged breach of this code of ethical standards. 3. Declarations in terms of subparagraphs (2) (d) and (e)- (@) Must be recorded in a register which the Accounting Officer must keep for this purpose: (b) By the Accounting Officer must made to the mayor of the municipality or the board of Girectors in the case of a municipal entity who must ensure that such declarations ere recorded in the register. 54(c) Must contain measures that will ensure that appropriate action is taken against any official or other role player wno commits a breach of the code of ethical standards 4 The National Treasury's code of conduct is adopted by supply chain management pracitioners and cther role payers involved in supply chain management for the City of Tshwane Metropolitan Municipality and entities. 5. A breach of the code of conduct adopted by the municipal entity must be dealt with in accordance with schedule 2 of the Local Government: Municipal System Act, 2000, eeeeeEeeE—— 43. REVISION OF POLICY ——SSS=—=—=—_————___—. This Policy will be reviewed on an on-going basis, and amended accordingly as and when necessary. ae 44. APPROVAL OF THE POLICY —=—=—=—=a——ee—e—e—e—e——————— This policy becomes effective on the date of approval by the TEDA Board of Directere. Approved / Not Approved SIGNED ON THIS ... - DAY OF .. LRG DET

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