The government fails to pay its suppliers a staggering R100-billion after the prescribed 30 days, which has led to louder calls for a paperless tendering system, parliament heard yesterday.
The government is also tired of paper and wants a more automated system which will help reduce manipulation of tenders.
This is according to the country's first chief procurement officer Kenneth Brown, who briefed the parliamentary standing committee on appropriations yesterday.
He said for the first six months to a year of its existence, the office of the chief procurement officer did quite a bit of research to be able to understand what the supply chain environment requires.
Annually, the government is the largest buyer in the country and spends over R500-billion on goods, services and construction work through more than 1000 procuring entities.
"Currently our system is too paper based and what we're doing with our automation is asking how we can reduce paper, and how we can manipulation [of procurement systems]."
Brown said they have spoken about the 30-day payment problem, but it still has not been resolved.
"We've done an assessment of outstanding creditors and to the financial statements of departments and we estimate that outstanding amounts payable to suppliers that are more than 30 days is about R100-billion.
"It's a huge amount of money that should be in the economy," said Brown.
He said they were finalising a survey of government suppliers which they will share with parliament.
"Those are some of the highlights that came through that particular survey. The next big innovation . has got to do with a central supplier database.
"We have surveyed over 45000 suppliers . I can give you already a few points that the suppliers are telling us. They're saying to us, use technology in supply chain and improve internet access for us. So 87% of them are saying that," said Brown.
He said they've also done an assessment of government's top 100 spending items.
MPs also expressed concerns on the current system.
Ahmed Shaik Emam of the National Freedom Party said he knew of a stationery manufacturer who struggled because the tender went to a "middle man" who gets all the money.
ANC MP Nkhensani Shope Sithole said she knew of a small number of contractors who have gone bankrupt after not being paid by the state for just two months.
State owes suppliers R100 billion
The government fails to pay its suppliers a staggering R100-billion after the prescribed 30 days, which has led to louder calls for a paperless tendering system, parliament heard yesterday.
The government is also tired of paper and wants a more automated system which will help reduce manipulation of tenders.
This is according to the country's first chief procurement officer Kenneth Brown, who briefed the parliamentary standing committee on appropriations yesterday.
He said for the first six months to a year of its existence, the office of the chief procurement officer did quite a bit of research to be able to understand what the supply chain environment requires.
Annually, the government is the largest buyer in the country and spends over R500-billion on goods, services and construction work through more than 1000 procuring entities.
"Currently our system is too paper based and what we're doing with our automation is asking how we can reduce paper, and how we can manipulation [of procurement systems]."
Brown said they have spoken about the 30-day payment problem, but it still has not been resolved.
"We've done an assessment of outstanding creditors and to the financial statements of departments and we estimate that outstanding amounts payable to suppliers that are more than 30 days is about R100-billion.
"It's a huge amount of money that should be in the economy," said Brown.
He said they were finalising a survey of government suppliers which they will share with parliament.
"Those are some of the highlights that came through that particular survey. The next big innovation . has got to do with a central supplier database.
"We have surveyed over 45000 suppliers . I can give you already a few points that the suppliers are telling us. They're saying to us, use technology in supply chain and improve internet access for us. So 87% of them are saying that," said Brown.
He said they've also done an assessment of government's top 100 spending items.
MPs also expressed concerns on the current system.
Ahmed Shaik Emam of the National Freedom Party said he knew of a stationery manufacturer who struggled because the tender went to a "middle man" who gets all the money.
ANC MP Nkhensani Shope Sithole said she knew of a small number of contractors who have gone bankrupt after not being paid by the state for just two months.
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