The procurement laws of South Africa allow for a variety of different methods of purchase. Single-source procurement, as well as oral quotes and written quotations, are all governed by this rule. South Africa’s procurement techniques are very straightforward in that they involve a request for proposals from three potential providers. This method of procuring goods and services can be easily translated into an electronic format, therefore lowering the carbon footprint of both the government and commercial providers alike. It is more complicated and time-consuming to go from paper to electronic procurement when it comes to a competitive bidding procedure.
In the English Auction, bidders congregate at a predetermined location and shout out their bids, allowing each buyer to be aware of the offers made by the other bidders. The English Auction is a traditional method of bidding in which bidders congregate at a predetermined location and shout out their bids. As reserve prices are raised incrementally, bidders can submit a series of bids until only one bidder remains and no other bidders raise their offers above the reserve price.
The winning bidder is determined by the number of bids that have been received. He or she can then acquire the item at the price at which he or she put the winning offer. When compared to regular reverse auctions, electronic reverse auctions operate in the same way as they do in real life, with the difference that the value of bids is shown electronically and the prices of bids fall rather than rising. When assessing bids, a mathematical formula is used to allocate points depending on the various aspects of the offers under consideration.
An invitation to tender must be published electronically, according to the UNCITRAL Model Law, before it can be accepted. All necessary information about the South Africa procurement, including the terms and conditions of the contract, must be included in the invitation. Additional criteria that influence proposal evaluation, such as quality or preference, must be explained in the invitation to bid.
Advantages and Disadvantages of E-procurement
Advantages
- Implementing e-procurement might potentially result in cheaper prices for the products bought as well as a more effective public procurement procedure, which results in lower costs and shorter time periods for the goods procurement process.
- By requiring bidders to participate actively in a “real-time” procurement process, it can further increase openness in the procurement process. Their bids and prospects for success are consequently constantly updated, as are their competitors’ bids and prospects for success.
- In addition, the government will be able to determine who its frequent suppliers are and tell the general public of this information. Procurement of goods and services from trustworthy suppliers will benefit from increased transparency and value for money. However, it is necessary to preserve competition while utilizing the services and products of multiple providers. According to the World Bank, the most significant advantage of implementing e-procurement has been an increase in transparency and competitiveness, both of which are elements mentioned in Section 217 of the Constitution.
- It has been highlighted that in order to get the most possible benefits from e-procurement, extensive training of all stakeholders would be required.
- Furthermore, suppliers are required to have an “electronic attitude” towards South Africa procurement in the sense that all inquiries, participation, and complaints would have to be conducted entirely online in order to qualify. The migration or transformation of all information relating to current tender procedures into an electronic format is required in order for an electronic procurement system to be kept up to date.
- Top management support will be critical in the establishment and maintenance of an electronic procurement system, not only by ensuring that the necessary infrastructure is in place but also by providing the necessary support to employees who are transitioning to the new system, which will be critical in the long run.
Disadvantages
- Due to the fact that e-procurement is a relatively new method of purchasing products and services, it faces a variety of challenges. E-procurement can be feasible only when procuring contracts of relatively modest value and when it is possible to assess features of bids using mathematical formulas, as a result of the fact that bids are reviewed on the basis of mathematical formulae.
- Inevitably, there is the risk that secondary factors such as quality and socio-economic considerations can receive insufficient attention. Therefore, products of inferior quality can be bought in order to get a more favorable pricing structure. It is asserted that this can provide a variety of difficulties in a country such as the Republic of South Africa.
- It is possible to travel between the nine provinces of South Africa, each with its own set of skills and needs. Furthermore, it is well-documented that South Africa’s procurement sector continues to suffer from the consequences of discriminatory policies implemented during the Apartheid era. To address this situation, Section 217(2) of the Constitution provides that categories of preference can be established in the allocation of public contracts.
- As a result, it is possible that the need to concentrate on preferential procurement and the growth of the small, medium, and micro-enterprises (SMMEs) will be more essential in some areas of the nation than other sections.
- Another potential risk associated with an e-procurement process is that it can in fact encourage collusion in situations when there are only a limited number of contractors who are capable of providing the necessary product or service.
- Another aspect to consider is the risk of an IT breakdown during the procurement process, which might result in legal issues about who is responsible for a failed process or a tender that was granted inadvertently. The presence of technical expertise, knowledge, and access to information technology in some businesses, particularly small and medium-sized enterprises (SMMEs), has also been identified.
- An additional obstacle to the successful implementation of e-procurement techniques and procedures is the lack of legal clarity that exists in the context of electronic South Africa procurement. This is due to management’s failure to offer appropriate infrastructure and support to employees, as well as a lack of motivation on the part of procurement personnel to move to a paperless workplace environment.