Central Supplier Database consolidates more than 600 databases
I found the lack of media coverage on the launch of the new Central Supplier Database (CSD) for the South African government last week astonishing. It is almost as if the significance of this event was not recognised. Finance Minister, Nhlanhla Nene, launched the database at the East London Industrial Development Zone on 1 September. Over the past six days it was mostly the government communications engine that reported on this news with only two of the main stream publications who carried this news. One wonders if we have become too focused on bad news to recognise good news when it happens. The need for a central database has been well recognised for many years but it has always been linked to other projects that never materialised. The ultimate launch of this database is therefore a big event in the lives of government suppliers.
The launch of the CSD represents a massive step in the journey of public procurement reform towards the digitisation of government procurement in the hope that it will reduce wastage and corruption. The database will reduce cost and effort for government (tax payer) and suppliers alike, improve accuracy of information, increase transparency of procurement transactions and dramatically improve the understanding of whom government spends its money with.
On the one side the CSD will reduce duplication of effort and cost for suppliers having to register on any number of the more than 600 public sector supplier databases currently existing in the country. (According to our own estimates.) On the other side the taxpayer will benefit with individual departments/municipalities/public entities removing the cost of inviting, managing and verifying registrations on these 600 databases. This work will now be done once per supplier. A large multi-national technology supplier once complained to me that their estimated cost to register on one of these databases was R10 000. I can image that they were registered on a large percentage of theses databases, so the annual expense of keeping these registrations up to data must have been sizable. Now that cost is cut right down to one registration.
Schalk Human, Chief Director: Supply Chain Management ICT in the Office of the Chief Procurement Officer at National Treasury, said the CSD is an intervention to reduce the administration burden on business. Suppliers will be able to register online and would no longer be required to submit physical tax clearance and business registration certificates. Integration to SARS and CIPC will eliminate the need for hard copy proof of these documents due to electronic verification of information with those agencies. The CSD will automate verification of supplier information with the register for tender defaulters and database of restricted suppliers housed at National Treasury to prevent businesses who are not eligible from doing business with government.
It would be compulsory for government departments and state-owned enterprises to use the CSD from 1 April 2016; municipalities would be required to use it from 1 July 2016. Suppliers will have to register before 1 April next year but registration is open to start now. About 29 000 suppliers were uploaded from the existing Logis system but the remaining 130 000 will have to register from the start on the CSD due to the quality and completeness of registrations not being acceptable. It would have an interface with SARS, the Companies and Intellectual Property Commission, the Department of Home Affairs and eventually the black economic empowerment database, Human said. It would also help flush out the estimated 200 000 government officials understood to be transacting with the state.
"Businesses in rural areas and those that did not have access to computers would be assisted," said Human. "We foresee support to rural suppliers happening in three ways: first in district offices, Thusong Service Centres, Small Enterprise Development Agency offices and the Post Office. They will have the capability to assist the suppliers to register."
For those with a basic understanding of a personal computer and a web browser, the registration should not be challenging at all. Our initial experience is that the system is well developed with strong validation and good security to keep the private information on your business secure. Suppliers also pay no fees to register on the database.
In our years in the tender notification business we have become acutely aware of the pain that suppliers go through to register on databases for organisations they may never do business with. Every tender you want to compete on is preceded by this complex registration and the inevitable tax clearance certificate. So we really appreciate these advances that make the public service more efficient and more attractive to do business with. Already this year we have seen the eTender Portal launched in April which already has 1200 tenders published on it. (See our earlier article on that portal.) We use this site daily to find tenders for our subscribers and the quality and volume is certainly on the increase. So this promises good
We look forward to more of these developments and believe there are a number of other project in the pipeline for the coming years. Under the current leadership from the National Treasury and the Office of the Chief Procurement Officer we can expect a stream of advances to move us forward. So to start competing for a share of the R500 billion procurement budget of the South African government you now know where to go.
For more detail on the CSD and registration process: Click here
Frequently asked questions: Click here
About the Office of the Chief Procurement Officer:
Annually, the South African government is the largest buyer in the country as it spends over R500 billion on goods, services and construction works through over 1000 procuring entities. An efficient and intelligent public procurement system can help to overcome service delivery problems. The vision is one of a public procurement system in South Africa which is made up of people with the skills, knowledge and enthusiasm needed to ensure that every decision that they make is well-informed and appropriate; who have the technical and organisational support to carry out this important work supported by the country’s Constitution, laws and regulations.
The Office of the Chief Procurement Officer will modernise and oversee the South African public procurement system to ensure that the procurement of goods, services and construction works is conducted in a fair, equitable, transparent, competitive and cost effective in line with the Constitution and all relevant legislation. The Office is not directly involved in procurement, but manages procurement reforms, maintains the procurement system and oversees the way in which government does business with the private sector.
Kenneth Brown was appointed in February 2013 as South Africa’s first Chief Procurement Officer.