Tenders & Contracts Cathy Masters B.Com ( Hons ) CA(SA)

1. Tenders & Contracts Cathy Masters B.Com (Hons) CA(SA) Lisa Thompson-SmeddleMphil; Bphil; BA C Masters Development Services

2. Strategies for financial sustainability for NPO’s Diversification of income sources Reducing “donor” dependence - contracts for services or outputs – focus is shifting from input to output & impact so too the financing model!! Building, investing, & protecting reserves – necessary to support new models of financing! Building relationships with government and the private sector

3. Tenders & ‘trade’ contracts • A tender is an offer to do work or supply goods at a fixed price.Once accepted, a tender is a binding contract. • A contract between parties to deliver particular activities (services) or outcomes (products) for a fee or price. • Direct exchange of value - direct to the customer/beneficiary and paid for by them • Indirect delivery of value to others - Contracted/paid by one party and delivered to a different party/beneficiary

4. Tenders & contracts for NPO’s • For sale of core activities and outcomes directly related to objectives, e.g. NICRO, Trauma Centre, JET Education Services • For sale of unrelated (or partly related) activities and outcomes. • Business on the side e.g. CWD bookshop, 2nd hand goods Beneficiaries in trading activities, e.g. WolaNani, Oasis • Consulting fees – selling expertise e.g.

5. The Possibilities • Large donor funds are shifting to support government services • Government needs NGOs to assist with service delivery • Once you have completed a successful tender with government your likelihood of winning further bids increases • Government and private sector • institutions allow for long term • contracts

6. Research and Planning • Scan tender sites and/or subscribe to tender services for relevant opportunities – examples (Tenderscan, Tradeworld, GCIS tender bulletin, Government Gazette, relevant websites, • newsletters) • Understand the procurement systems (MFMA,PFMA) • B-BBEE status • Conflict of interest • Understand relevant policies • Quality and competitive pricing

7. Before you Begin: • Register on Supplier Databases • City – Metro/municipality • Provincial • National – Treasury • Government departments • SETA’s

8. The Challenges • Registrations & compliance • Specific terms of reference • Alignment of objectives • Scope of delivery • (often wider than local community) • Capacity issues • Lengthy tender/contract process • Cash flow – delayed payments • Cost competitive but must be financially viable

9. Get your ducks in a row!! • Registrations and Compliance • Legal structure – basics • Governance • NPO Act • SARS -Valid tax clearance • certificate • B-BBEE - certificate • Financial – audited AFS • Company profile/CVs

10. Finances • Reserves or ‘seed’ money - cash flow • Full costing– not just direct delivery cost, but also underlying support/infrastructure costs, • but still competitive! • ‘Profit’ margin and risks • VAT & other tax implications

11. Meeting the challenges • Collaborations • Consortiums • Business partnerships • Government • Donors

12. Shift Thinking!! Think Big! • Social Enterprise • Sell ‘social outcomes’ not problems or activities • Think innovation, opportunity, and successful change • Think bigger – scale- ability • Think ‘brand’ value • Be adaptable • Not too “precious” • Brave heart

13. Thank You Cathy Masters Executive Director CMDS 082 574 9907 021 797 6226 cathy@cmds.org.za www.cmds.org.za Lisa Thompson-Smeddle DirectorSustainable Development Network083 458 1143021 659 2551lisa@sdnafrica.comwww.sdnafrica.com

14. Factors that affect organisational sustainability