The effectiveness of tender practises in municipal supply chain management: An exploration of two municipalities in Amathole district municipality in the Eastern Cape Province (2009-2012).

Abstract

The tendering process is central to acquisition of public services and goods in all over South Africa. Municipalities and government institutions just like any private institution need to buy products and services in order to perform their functions effectively. But the procurement function has not been an easy one for government with the tender process being slow and not transparent which can lead to a process of settling invoices taking up to three months, potentially destroying small businesses. The primary objective of this study therefore, is to find the causes of nepotism, bribery and corruption in tender practises in the two selected municipalities of the Amathole District and the factors that lead to delayed payments in the tender practises and further makes recommendations on how to eliminate such factors. The study used a mixed method approach research methodology which is a combination of qualitative and quantitative methods and included the two municipalities from the Amathole District Municipality, the Buffalo City Metropolitan Municipality and Nkonkobe Municipality and used questionnaires and an interview to collect data. Findings drawn from the study is that in both municipalities there is non-compliance with the rules stipulated in the legislation that concerns tenders and supply chain management. The process of paying contractors and SMME's requires a lot of documentation which results in the process to be long and time consuming. The study then recommends that a background check must be done, increase in human capital, employment of skilled labour, reviewing of the tender process and development of small business must be done in order to address findings and aims of the study.