Suppliers owed R100bn

14 April 2016 - 02:47 By Babalo Ndenze

The government, which at present owes suppliers R100-billion because of its failure to pay many of them within the prescribed 30-day period, is tired of paper and wants to migrate to an automated system that would also help to reduce manipulation of the tendering system. This is according to Kenneth Brown, the country's first chief procurement officer, who briefed the parliamentary standing committee on appropriations yesterday.Brown said he spent the first six months to a year since his office' s establishment conducting research in a bid to understand the complexities of the supply chain environment .The government spends more than R500-billion a year on goods, services and construction work through more than 1 000 procuring entities, making it the biggest buyer in the country."Currently, our system is too paper-based. What we are doing with our automation [process] is asking how we can reduce paper and how we can reduce manipulation [of the procurement system]," said Brown.He said concerns had been raised about the failure by state entities to pay suppliers on time but the matter had still not been resolved."We've done an assessment of outstanding creditors ... and we estimate that the outstanding amount payable to suppliers [whose invoices] are more than 30 days [old] is about R100-billion. It's a huge amount of money that should be in the economy," Brown said.He said government suppliers often shared their frustrations with his office, which was in the process of finalising a survey of service providers it had conducted."Those are some of the highlights that came through that particular survey. The next big innovation that has come through has got to do with a central supplier database. We have surveyed more than 45000 suppliers through the survey."They're saying to us: 'Use technology in supply chain and improve internet access for us','' So, 87% of them are saying that," Brown said.MPs also expressed concerns regarding the existing system.Ahmed Shaik Emam of the National Freedom Party said he knew of a stationery company that struggled to be paid because the stationery tender went to a "middleman, who gets all the money".ANC MP Nkhensani Shope-Sithole said she knew of a number of contractors that went bust because they had not been paid by the state for two months...

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