Abstract
M. Com. (Business Management)
The media and the Auditor General have extensively reported on the ineffective and unethical conduct of public sector employees regarding the procurement of goods and services. The Auditor General’s report demonstrates that there is evidence that public sector procurement processes are less than adequate to achieve constitutional procurement goals, which are to conduct processes that are fair, equitable, transparent, competitive and cost-effective
The delivery of services through staff and the procurement of goods and services from suppliers should take place on the basis of proper strategic leadership and management processes. Inappropriate planning and budgeting, failure to identify priorities, under-spending of budgets and ineffective procurement form part of the root causes of poor service delivery to the public, as ineffective procurement leads to the misallocation of resources and restricts the movement of resources to the right places at the right time
The impact of improper procurement practices on society is very serious, as it delays the delivery of basic services and development. The money that could have been used to build schools and hospitals, improve sanitation, and many other infrastructure projects is wasted as a result of ineffective and inefficient procurement and management practices.
The objective of the study is to ascertain the extent to which public entities comply with leading procurement practices as identified through literature review. This study focused on public entities. Proper procurement management processes in public entities will lead to better public service delivery, reduction in public resources wastage and increased public wealth.
The literature study consist of two components, firstly, the study identified leading procurement practices and procurement objectives in the public sector, secondly, the study further determined leading management practices from two recognised sources of authority to establish the comprehensiveness and robustness of the leading procurement practices. Furthermore, a survey questionnaire was used to determine the extent to which the public entities apply leading procurement practices.
Procurement is not just the purchasing of an item but a multifaceted process that includes information technology, risk management, business strategy and operations and legal compliance. All these activities should be coordinated to deliver organisational needs and goals. The procurement function objectives and activities should be directly linked to organisational goals, management plans and stakeholders’ expectations.
The leading public procurement objectives, as determined by the literature review, are value for money, ethics and values, competitiveness, transparency, accountability, equitable (unbiased and fair dealing) and preferential procurement.
The eight leading procurement practices determined through a literature review are procurement strategy and leadership (which include customer focus), procurement processes and policies, human resource management, procurement information technology, supplier management and procurement performance management.
The study made use of questionnaires seeking information on current procurement practices in the public entities. The questionnaire was based on leading practices identified through this study. Respondents were asked to assess the extent to which their public entities apply these leading procurement practices. The three most applied leading procurement practices were indicated as leadership, process management and strategic planning. The study has identified that the public entities possibly apply five out of the eight leading procurement practices to a “lesser extent”, implying that they are being applied but not nearly as often or consistently as best practices would dictate.
The study thus indicated that, although some of the leading public procurement practices are applied in the entities under review, these practices are often applied inconsistently and frequently not to the extent that they should be applied. The study thus provided a clear indication that public entities still have a long way to go if they are to achieve the procurement objectives set out for them in terms of the country’s Constitution.