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Traversing the government procurement process

A Smart Procurement World event held in South Africa last month proved that there is a hunger for knowledge sharing around astute government procurement practices.

The event provided an indication of how collaborative processes can enhance business opportunities for SMMEs and corporates alike. A number of thought-provoking seminar topics assisted the private sector as a whole, and SMMEs in particular, in uncovering the most effective ways of negotiating the procurement process when dealing with government departments and municipalities.

Fawzia Peer, eThekwini Deputy Mayor, stated: “Those who work in procurement departments within government must see themselves as enablers to achieve service delivery promises. Under the Preferential Procurement Regulations one of the new requirements is that at least 30% of the value of contracts above R30 million, must be sub-contracted to assist in the development of emerging suppliers. We would actually like to see all suppliers subcontracting to SMMEs, cooperatives, as well as township and rural enterprises, irrespective of project value.”

Fawzia Peer
Fawzia Peer, Deputy Mayor of eThekwini Muncipality, speaking at Smart Procurement World in KZN

She added that the municipality has updated its technology and invites SMMEs to use the free Wi-Fi in the municipal offices to register for contracts. “We are also rolling out wireless technology and connectivity to the rural areas to make doing business with government much easier.”

Government procurement cost-sharing grant

Takalani Tambani, Chief Director: Black Industrialist Programme, Department of Trade & Industry (the dti), discussed how this government procurement programme is aimed at reconfiguring the South African industrial landscape with the creation of new entrants that will shake up existing supply structures. This will open up opportunities for procurement in finding new sources of supply or being able to negotiate with companies that have monopolised the supply base.

Tambani highlighted the incentive offerings, which include a cost-sharing grant ranging from 30 to 50% to approved entities, up to a maximum of R50 million (up to R15 million per annum). The grant will be dependent on a number of factors that include the level of black ownership, management control and the project value. The grant may be utilised for capital investment costs; feasibility studies towards a bankable business plan (to a maximum of 3% of projected investment project cost); post-investment support (to a maximum of R500,000); and business development services (to a maximum of R2 million).

Event goes the extra mile

Hand in glove with the conference was the promotion of local SMMEs through the Enterprise & Supplier Development (ESD) Expo, which took place between 17 and 18 July. In addition, a number of ‘How to do business with corporates’ and various buyer-supplier matchup sessions on 18 July helped to facilitate relationship building between the various stakeholders.

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Over 150 delegates thronged the Durban ICC for the conference while over 270 SMMEs showcased their products and services to a captive audience of 962 visitors.

Sponsorship by corporates was provided for a number of SMMEs including Moksa Electrical Wholesalers, Durable Energy Solutions and Able-Energy. Moksa Electrical Wholesalers offers a diverse range of electrical products from cables, lighting, electrical distribution and switchgear through to switches and sockets.

Director Rishantha Chetty says that the ESD Expo allowed the company to meet potential new customers as well as interact with other SMMEs who could benefit from a relationship. “Of great value to us were the talks on how to conduct business with the larger companies. This allowed us to ask pertinent questions and network with the company representatives, in order to grow our own business.”

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Durable Energy Solutions, a cooperative company formed as part of an entrepreneurship programme by merSETA and the Umfolozi TVET College, manufactures lights, with a special emphasis on advanced LED lights for residential, commercial and industrial markets. In addition to a variety of household lighting solutions, the company also have a number of streetlight and bulkhead models available.

Smart Procurement World allowed us to learn more about entrepreneurship and how to do business with the private and public sectors. Furthermore, the networking opportunities provided a means of discussing possible ways to grow and business and to contribute to the growth of the overall South African economy,” says the company’s managing director Sithandile Zwane.

Nicolette Pombo-van Zyl
As the Editor of ESI Africa, my passion is on sustainability and placing African countries on the international stage. I take a keen interest in the trends shaping the power & water utility market along with the projects and local innovations making headline news. Watch my short weekly video on our YouTube channel ESIAfricaTV and speak with me on what has your attention.