POLICY APPROVED BY THE EMC 1999 (revised 26 May 2009)
- The Purchasing Section of the Operations Division provides a procurement service to all Programmes and Divisions of the MRC, and may be contacted for any information which may be required.
- All MRC purchases of goods and services are subject to the requirements of the Procurement Policy.
- The written quotations/tenders, and in the case of telephonic quotations, the details thereof, must be attached to the requisition (MRC-4) submitted to the purchasing section for order processing.
- The Operations Division or the regional administration offices must be consulted in the case of building additions, alterations and repairs.
- The Purchasing Section in Operations may be approached for advice and assistance when obtaining written quotes. Formal tenders must be called for and administered in cooperation with the Operations Department.
Authorisation of purchases
All requests for the purchase of goods or services must be approved in writing by an authorised person.
- The power to delegate authority for the purchase of goods/services on behalf of a specific group, programme or department is vested in the head of that group, programme or department, in terms of the delegation policy of the MRC (Refer to the Financial Manual).
- It is the responsibility of the head of a group, programme or department to maintain a list of authorised persons for that group, programme or department. The Finance Department must be provided with a copy of the list of authorised persons, and must be advised immediately, in writing, of any changes to such list.
Quotations and Tenders
Number of quotations required
With effect from the 16 November 2009, The minimum number of quotations required for each order are as follows:
- Up to a transaction value not exceeding R 2, 000 (VAT included)
- Procure goods and services without inviting competitive bids or price quotations, but following internal procedures to ensure sound financial management.
- Above the transaction value of R 2, 000.00 but not exceeding R 10, 000 (VAT included)
- Procure goods and services by obtaining at least three (3) telephonic/verbal or written quotations from, where applicable, a list of prospective suppliers. The order should, however, be placed against written confirmation from the selected supplier if the quotation was submitted verbally.
- Above the Transaction value of R 10, 000.00 but not exceeding R 200, 000 (VAT included)
- Procure goods and services by inviting and accepting at least three (3) written price quotations from, where applicable, a list of prospective suppliers;
- If it is not possible to obtain at least three (3) written price quotations, the reasons should be recorded and approved by the EMC.
- Please note that a valid tax clearance certificate, issued and signed by SARS, must accompany all price quotations/competitive tenders over R30 000 (VAT included).
- Above Transaction value of R 200, 000.00 but not exceeding R 500, 000 (VAT included)*
- Procure goods and services by inviting and accepting three (3) or more written price quotations from, where applicable, a list of prospective suppliers. However written quotations may be obtained from other suppliers;
- Procurement within this threshold needs to be approved by the EMC, in consultation with the Chairperson of the MRC Finance and Audit Committee. Either the EMC or Chairperson of the Finance and Audit Committee or both may order procurement within this threshold to follow competitive bidding process;
- If it is not possible to obtain three (3) or more written price quotations, the reasons should be motivated for, recorded and approved by the EMC and the Chairperson of the MRC Finance and Audit Committee; and
- Transaction value of R 500 000 and above (VAT included)
- Invitation of competitive bids advertised in at least the Government Tender Bulletin and in other appropriate media, should it deemed necessary to ensure greater exposure to potential bidders for all procurement above R 500000; and
- Should it be impractical to invite competitive bids for specific procurement, e.g. in urgent or emergency cases or in case of a sole supplier, the accounting officer / authority may procure the required goods or services by other means, such as price quotations or negotiations in accordance with Treasury Regulation 16A6.4. The reasons for deviating from inviting competitive bids should be recorded and approved by the accounting officer / authority or his / her delegate and Chairperson of the Finance and Audit Committee. Accounting officers /authorities are required to report within ten (10) working days to the relevant treasury and the Auditor-General all cases where goods and services above the value of R1 million (VAT inclusive) were procured in terms of Treasury Regulation 16A6.4. The report must include the description of the goods or services, the name/s of the supplier/s, the amount/s involved and the reasons for dispensing with the prescribed competitive bidding process.
- NB: General Requisition signing limit not exceeding R200, 000.00 will be applicable for staff levels up to the Unit Director. Any transaction exceeding the signing limit will need to be approved by an EMC member.
Where there is a sole supplier for a particular item or service this must be confirmed by the supplier itself through confirmation letter of sole supplier not by our staff.
In the case of building additions, alterations, repairs and maintenance:
- Up to R10 000: allocation of the work is at the discretion of the purchaser
- From R10 001 to R20 000: two written quotations where practical and obtainable.
- Above R20 000: tenders must be called for on the "Invitation to Tender : Minor Works" form available from the Operations Department. Where only one or two tenders are eventually received, proof of calling for tenders from other suppliers/contractors must be provided.
In instances where contractors/suppliers require a prepayment against performance:
- The MRC will pay a maximum amount equivalent to 25% of the total value of the contract.
- Payment shall only be made upon submission of a properly authorised MRC-04, invoice and quotes.
- The cheque shall not be handed over to the contractor until materials equivalent in value to the prepayment are delivered on site. The contractor must be informed prior to the conclusion of an agreement and issuing of an order that such materials then become the property of the MRC.
In the case of personal computers and allied equipment:
Suppliers of personal computers and allied equipment shall be requested to submit quotations to the Information Technology Services Division on a six-monthly basis for the sole supply of such equipment to the MRC at fixed prices for a period of six months from the date of acceptance of such quotations. The decision on the acceptance of a specific quotation shall be taken and communicated to the successful supplier no later than the expiry date of the previous six-month cycle.
In instances where only two tenders/quotes are received and there is a significant difference between them (25% or more), the tenderers should be requested to check and confirm their quotations/tenders to ensure that both have tendered on the same basis, before final acceptance and awarding of the order.
When goods or services have to be ordered from a sole supplier, that supplier must submit a written, official quotation in which the conditions of sale are clearly set out. The purchaser must satisfy him/herself that such conditions are fair and reasonable.
Reasons for requesting specific product names/trademark
When goods bearing a specific name or trademark are required, giving rise to a transaction with a sole supplier, a written motivation must accompany the request, together with the quotation as mentioned in Point 3.2 above.
No comparative quotes
Where no comparative quotes are obtained, and points 3.2 and 3.3 above are not applicable, a full, written motivation must accompany the MRC-04.
Preferred supplier status
- Application for a supplier of goods/services to be awarded preferred supplier status shall be made to the Executive Management Committee after the tender process as set out in Clause 5 below is complete.
- Preferred supplier appointments shall be valid for 12 months from the date of Executive Management approval."
Internal loans for the purchase of Capital Equipment
- The MRC procures all office and laboratory equipment through outright purchase. Where a requesting Programme, Unit or Division does not have the necessary funds to do so, application may be made on the form "Application for an Internal Loan for the Purchase of Capital Assets" obtainable from the Division Manager: Operations.
- Internal loans for the purchase of capital assets shall be restricted to items with a total, VAT-exclusive price of not less than R 10 000 and not exceeding R 250 000.
- Capital items costing less than R 10 000 shall be purchased from the capital budget allocation of the requesting Programme, Unit or Division.
- The method of financing of capital items costing in excess of R 250 000 shall be decided upon by the Executive Director: Finance and Operations in consultation with the relevant Programme, Unit or Division Head.
- The maximum redemption period for internal loans shall be 36 months.
- Interest shall be levied on internal loans at a rate to be determined from time to time by the Executive Director: Finance and Operations, which rate shall not exceed the rate earned on the MRC's investments.
- The rate of interest charged on an internal loan shall remain fixed for the term of such loan.
- Internal loans shall be restricted to assets purchased from baseline funds only.
When the total cost of goods or services is expected to exceed R200 000, the following procedure must be followed:
- Clear, detailed specifications which fulfill all the applicant's requirements must be drawn up in cooperation with the applicant.
- The specifications must be incorporated into a standard tender document and be made available to interested suppliers.
- The tender document will be drawn up according to the goods or services required.
- A Tender Committee will open the tenders on or after the specified closing date and time, and nominate the successful tenderer. The opening of tenders may not be attended by tenderers, bearing in mind the provisions under "General" in point 3.1 above. The Tender Committee shall consist of:
- Cape: The Procurement Officer, the applicant, and at least two of: Executive Director - Finance and Operations, Division Manager - Finance, Division Manager - Operations.
- Pretoria: Head of Administration (Convenor), the Procurement Officer and the applicant.
- Durban: Regional Executive (Convenor), the Administration Officer and the applicant.
- A tender will not necessarily be awarded to the lowest or any tenderer. Factors which must be taken into account are:
- Quality of the product.
- Known history of after-sales service.
- Delivery (lead) times.
- Availability of spares/expertise.
- Cost of maintenance contracts if applicable.
Payment of Accounts
The MRC has a policy of paying for goods and services within 30 days of date of statement. This fact must be emphasised when negotiating with contractors. Only where contractors are prepared to offer a further discount for COD payment, and this is clearly indicated on their quotes and invoices, will interim payments be made.
Interdepartmental exchange of unused goods/equipment
The Operations Department (Assets Control Officer) may be contacted before commencing with the above procedures, to determine whether there are not similar, unutilised goods or items of equipment available elsewhere in the MRC. If so, they will be transferred and installed at the applicant's cost.
Trade-in of obsolete equipment
In instances where equipment is to be replaced, all information, the operating history and the trade-in value must be supplied to the Operations Department. The equipment will then first be advertised internally in case other programmes should be interested in taking it over at trade-in value. It may then be traded-in if no other programmes express interest.
Favours from suppliers of goods/services
The acceptance of favours from suppliers of goods and services shall be subject to the stipulations of the MRC's Conditions of Service as revised from time to time.
Purchases from persons/suppliers with family connections
It is MRC policy not to purchase goods or services from persons or suppliers with family connections with MRC employees, or from suppliers or companies in which an MRC employee has an interest. In cases where there is merit and there are advantages for the MRC in such a transaction, full details of such a relationship must be disclosed, and the desirability of the transaction must be motivated.