During November 2015, in support of the separation of the supply chain for infrastructure procurement and delivery management from that for general goods and services, National Treasury issued the following two documents:
- An instruction in terms of Section 76(4)(c) of the Public Finance Management Act of 1999 (Act 1 of 1999) (PFMA), which requires the implementation of the Standard for Infrastructure Procurement and Delivery Management (SIPDM) by all organs of state subject to the PFMA, with effect from 1 July 2016.
- A Model Supply Chain Management (SCM) Policy for Infrastructure Procurement and Delivery Management in terms of Section 168 of the Municipal Finance Management Act of 2003 (Act 56 of 2003) (MFMA) in support of the MFMA SCM Regulation 3(2) as a National Treasury guideline determining standards for municipal SCM policies.
The implementation of the National Treasury Standard for Infrastructure Procurement and Delivery Management forms an integral part of the Model SCM Policy issued in terms of the MFMA. The issuing of the Model SCM Policy accordingly enables implementation of the SIPDM through the MFMA.
The SIPDM establishes control frameworks for the planning, design and execution of infrastructure projects and infrastructure procurement; requirements for a number of matters as applied to the supply chain management system for infrastructure procurement and delivery management; and minimum requirements for infrastructure procurement. This standard enables the separation of the supply chain management requirements for general goods and services from those for infrastructure. Underlying the separation of the supply chains is the notion that the effective and efficient functioning of the supply chain management system for infrastructure procurement and delivery management will realise value for money and good-quality service delivery. Value for money may be regarded as the optimal use of resources to achieve the intended outcomes. Underlying value for money is an explicit commitment to ensure that the best results possible are obtained from the money spent, or maximum benefit is derived from the resources available.
The SIPDM is required to be implemented by organs of state which are subject to the PFMA on 1 July 2016. Regulation 3(1) of the Supply Chain Management Policy issued in terms of the MFMA requires the accounting officer of a municipality or municipal entity to at least annually review the implementation of the SCM Policy and, if necessary, submit proposals for the amendment of the policy to the council or the board of directors. The issuing of the Model SCM Policy will trigger a review of the current policies and require that an appropriate SCM Policy be put in place for infrastructure. There is no date set for implementation. Nevertheless, the revised policy should be in place for implementation by 1 July 2017 at the very latest.
This special publication, which is aimed at built environment professionals who may participate in infrastructure procurement and delivery management as regulators, clients, consultants and contractors, is expected to facilitate the effective implementation of the SIPDM as it:
- contextualises and communicates the philosophy behind the SIPDM;
- explains the impact of the separation of the supply chain for infrastructure procurement and delivery from that for general goods and services;
- discusses the role of the client, including the assigning and delegation of responsibilities;
- offers guidance on how to apply the control frameworks;
- indicates the range of procurement options and approaches that are available;
- provides high-level guidance on satisfying most aspects of the SIPDM;
- deals with selected aspects of infrastructure delivery which should be dealt with in order to improve project outcomes; and;
- presents short views on the SIPDM from a number of key industry stakeholders.