LISTEN: How state organs flout procurement regulations

The current acting chief procurement officer at National Treasury, William Mathebula, appeared before the commission as its first witness on Tuesday.

Mathebula’s testimony gave the commission an overview of how government departments issue and regulate tenders and the processes of procuring goods and services.

ALSO READ: SACP Gauteng to march to state capture inquiry

Deviation is a provision in the Public Finance Management Act, which allows state organs to move away from normal procurement processes in case of an emergency.

“When we made this regulation in the Treasury relations, immediately after we picked up pockets of this particular regulation. We issued an instruction that if you deviate from a normal procurement process other than in case of an emergency and the transaction is above a million, please report to the AG (auditor-general) within 10 days, and the reasons must be recorded by the account officers. But this thing went on and on, and you would find instances where a contract would start at R4 million and by the time you know it the contract value is sitting at R200 million and you ask yourself how this happened.”

“Instead of deviations becoming an exception from the norm, deviations became a norm. So organs of state, instead of complying with Section 217, saw a room to use deviations to circumvent the system, and this is where the challenge is. If you say to me I must deviate from a normal procurement process you are giving me a blank cheque and I decide who do I award the tender to. I can then give it to anybody,” he added.

Mathebula said while Treasury reviews tenders, the system has gaps that continuously have to be filled.

He said the department is busy improving its supply chain capacity.

“The one stream is to professionalise this profession and make sure that like in any other profession those who are found to have flouted the process the body responsible for that process must take action against that person. The more urgent process is training and development, because practitioners must be able to put together a tender document, that is what is lacking hence we always appear in court, as all these laws are misinterpreted landing us into problems, the immediate step we are taking is to train people practical.”