Municipal Modernization Workshop: Procurement and Vendor Engagement Strategies RT25-2016

1. IMFO WORKSHOP RT25-2016: Where to from here? Presented by National Treasury: Chief Directorate Local Government Budget Analysis

2. RT25-2016 This is a PROCUREMENT process and NOT an accreditation process This process was driven by the OCPO and NOT the mSCOA team There are NO “certified” or “approved” systems and all vendors are treated equally by NT and the mSCOA team

3. RT25-2016 tender request BID ADVERTISEMENT DATE: 4 March 2016 BID CLOSING DATE: 18 April 2016 NUMBER OF ITEMS IN THIS BID 7 Categories of Municipalities, hosted on site and off site VALIDITY PERIOD: 16 August 2016 NUMBER AT BRIEFING SESSION 98 vendors NUMBER OF BIDS RECEIVED: 33 vendors

4. Management performance and the availability of information Full accounting Cycle Cost Benefit Saturation points mSCOA The cost benefit associated with information is factored into the transversal pricing schedules. This means the minimum mSCOA requirements vary according to the category of municipality. NB! Proposals to respond only to the categories that the service provider serves.

5. RT25-2016 evaluation process Mandatory requirements Functional evaluation Practical demonstrations Pricing negotiations BAC submission

6. RT25-2016 Mandatory requirements Valid and original tax clearance certificate Service provider profile Company financial statements Shareholding portfolio Registration with professional bodies Permission letters/ vendor certificates mSCOA compliance Pricing Schedule/ Technical questions in the original format, Excel version Attendance of the compulsory briefing session

7. RT25-2016 Functional evaluation 110 mSCOA requirements 402 functional requirements Local Government experience ERP implementation vs modules only or consulting Local vs international or government Project implementation methodology

8. RT25-2016 Practical demonstrations Provided a scenario which the vendor had to demonstrate in a live environment: How the FULL chart is embedded in the solution Budget preparation Transactions Reporting

9. RT25-2016 Pricing negotiations • Market research to determine current price • Price reduction of up to 20% on market price • Pricing negotiations with vendors • Recommendation within target pricing range

10. RT25-2016 As per circular 80 the purpose was to assist municipalities that decided to upgrade/ replace their systems with the technical ability and negotiated price.

11. Rt25-2016 The way forward

12. RT25-2016 – the way forward for municipalities Assessment of current systems Decision to stay or move Notice to vendor and letter to PT/ NT Procure from panel of vendors OR open market procurement process Negotiate pricing and SLA according to tender outcome REFER TO CIRCULAR 80 AND mSCOA CIRCULAR 5 & 6 FOR GUIDANCE

13. RT25-2016 – the way forward for vendors Assist municipalities with assessments; Do NOT coerce or mislead municipalities! Work with NT, PT, IMFO to roll out training and capacity building to municipalities; Engage in above board, open and honest marketing activities; Do NOT on board more municipalities than capacity and do NOT neglect current clients.

14. Questions?