The influence of procurement practices on service delivery : an analysis of government legislation – service delivery relationships in South Africa

Thesis (PhD)--Stellenbosch University, 2019.ENGLISH SUMMARY : The question that remains unanswered among public procurement scholars is whether public procurement prescripts and their implementation hinder accelerated service delivery. The public’s perception is that public procurement legislation is fragmented, rigid and difficult to implement. Perception further suggests adverse relationships between public procurement, fraud, corruption and service delivery. To ensure a better understanding of the phenomenon being studied, relevant literature was explored. Public sector procurement was defined as a process that involves hiring, purchasing or acquiring goods, services and construction works through contractual means in order to render efficient service delivery. It was found that, since public sector procurement operates within a tight political system, there is some level of interference with procurement operations. The relationship between public procurement and service delivery was thoroughly discussed, where service delivery was defined in different contexts and the researcher concluded that, although definitions were given in different contexts, “community well-being” was the epicentre of service delivery. The above relationship was supported by recent statistics on service delivery protests and the Auditor-General’s audit outcomes. An important take-away from this segment was that clean audits are meaningless if there is no service delivery improvement. Literature revealed that new public procurement reforms, including public procurement legislative consolidation are urgently needed. The reforms also included public procurement professionalisation, the adoption of e-government and e-procurement technologies. A distinction was made between procurement and supply chain management, while public and private sector procurement were also differentiated. Some similarities were noted, in that both private sector and public sector have a single mutual goal – to get value for money throughout the procurement process. The researcher discovered that the public sector does not perform supply chain management, it only specialises in one or two elements of supply chain management. Leenders and Fearon (2004:10) argue that supply chain management is a systematic process that facilitates the entire synergy between raw materials, services and information from the research and development (R&D) stage through to the end consumer receiving a finished product. The public sector rarely does R&D, nor does it develop, manufacture and market products and therefore only performs a few supply chain management elements, mainly procurement and some logistics management for selected government institutions. It is therefore the researcher’s submission and contribution that a single organisation cannot perform the entire supply chain management process as each specialises in either one or a few supply chain management elements. The study discussed how public sector procurement could learn from some of the private sector good practices, because communication, product flexibility and innovation between government institutions and suppliers is very limited due to some prohibiting prescripts. Types of corruption in public procurement and its effect on service delivery was discussed alongside measures to combat it. The researcher introduced the rule of law principles and good governance with its three key role players as new measures to curb public procurement corruption. South Africa does not have a public procurement act passed by parliament to specifically address public procurement operations. South Africa has also not adopted e-government and e-procurement technologies in public procurement operations. Furthermore, South Africa does not have an independent and impartial public procurement regulator; therefore, the researcher’s observations compelled the commissioning of case studies on three African countries, namely Kenya, Zambia and Zimbabwe which have operational public procurement acts, have adopted public procurement modernisation and also have operational public procurement regulators. The three case studies revealed three main lessons for South Africa on how the three countries managed, firstly, to enact and implement specialised public procurement acts years ago. Secondly, how they managed to promulgate and implement e-government and e-procurement technology policies. The third lesson was on establishing a procurement regulator to independently and impartially oversee public procurement in their countries. In an effort to answer the main unanswered question above, both qualitative and quantitative research methods were applied (using a hybrid research method) to ensure triangulation. Quantitative methods have a weakness as they do not fully understand the context in which respondents provide their responses, while qualitative methods often “push” the researcher’s ideas, which can be regarded as subjective. For these reasons the hybrid research method was chosen to make sure that the strengths of qualitative methods counterbalance the shortcomings of quantitative methods and vice versa. The study population was made up of public procurement employees, ranging from practitioners to chief directors in five major service delivery departments (provincial and national) of Health, Public Works, Human Settlements, Social Development and Transport, and one large municipality in each of the nine provinces. Since is it not possible to interview or survey the entire relevant population; the population sample was confined to 352 procurement employees. Survey questionnaires, interview guides and document reviews were utilised to collect data. Questionnaire data was analysed using SPSS, e-Views 9.5 and Microsoft Excel. All responses were graphically presented as per the questionnaire sequence. Qualitative data was analysed thoroughly, leading to the extrapolation of common themes that informed the thematic analysis in order to match commonalities in respondents’ opinions. The researcher ensured the validity, credibility, and high standards of data quality throughout the study. In this study, various validity measures were used to evaluate the respondents’ responses and opinions regarding service delivery and public procurement legislation. Construct validity measures tested how well the results correlated to the reviewed theories and study hypothesis. The study results were interpreted against the background of the main hypothesis, which suggested that “public procurement legislative practices have a negative impact on service delivery”, which was confirmed by the Chapter 6 results. The study discovered that the fragmentation of public procurement legislation delays service delivery because there is an absence of central legislative accountability to monitor procurement performance. Qualitative respondents also agreed and stated that “some of the prescripts are issued without consultation with public procurement specialists or practitioners in national and provincial departments, public institutions and municipalities”. Furthermore, the best procurement practices and procedures are not developed and shared across all government institutions. However, different views from senior Office of the Chief Procurement Officer (OCPO) officials indicated that service delivery delays are not always due to fragmented legislation, but sometimes due to poor procurement planning, non-compliance and deliberate manipulation of public procurement prescripts. A common reason given by respondents was that “different decisions are taken in different places and levels amounting to unnecessary government bureaucracy.” The study revealed an element of political interference in public procurement, this is seen as delaying service delivery. The study recommended the establishment of a specialised National Bid Appeals Tribunal (operated regionally) with Chapter 9 institution powers, this is urgently needed to reduce litigation costs for both government and service providers. Although perceptions suggested that OCPO does not consider recent court judgments when issuing instruction notes; the study did not find any substantial scientific evidence to support such a notion with a combined 52 percent of respondents disagreeing. The National Treasury ought to establish a unit under OCPO to focus on the analysis of public procurement-related court judgments and advise lawmakers accordingly. The study also recommended a review of some legislation that hinders the full adoption of strategic sourcing in government procurement. The study is meant to assist National Treasury in properly managing wide consultation with all procurement specialists in all three spheres of government and by carefully drafting, consulting, analysing court judgments, promulgating and guiding the implementation of public procurement reforms in South Africa. In light of the above summary of recommendations, an efficient and effective Procurement practices versus service delivery normative model has been developed and proposed to achieve some of the above recommendations.AFRIKAANSE OPSOMMING : Die vraag wat onder openbare verkrygings geleerdes bly, is of openbare voorskrifvoorskrifte en die implementering daarvan versnelde dienslewering belemmer. Die publiek se persepsie is dat wetgewing oor openbare verkrygings gefragmenteer, styf en moeilik is om te implementeer. Persepsie dui verder op ongunstige verhoudings tussen openbare verkryging, bedrog, korrupsie en dienslewering. Om 'n beter begrip te verkry van die verskynsel wat bestudeer word, is relevante literatuur ondersoek. Openbare sektor verkryging is gedefinieer as 'n proses wat behels die huur, aankoop of verkryging van goedere, dienste en konstruksiewerke deur middel van kontraktuele middele ten einde doeltreffende dienslewering te lewer. Daar is bevind dat sedert die verkryging van openbare sektor binne 'n stywe politieke stelsel handel, daar 'n mate van inmenging met verkrygingsbedrywighede is. Die verhouding tussen openbare verkryging en dienslewering is deeglik bespreek, waar dienslewering in verskillende kontekste gedefinieer is en die navorser het bevind dat, hoewel definisies in verskillende kontekste gegee is, "gemeenskapswelstand" die episentrum van dienslewering was. Bogenoemde verhouding is ondersteun deur onlangse statistieke oor diensleweringsprotasies en die Ouditeur-Generaal se oudituitkomste. Die belangrike wegneem van hierdie segment was dat skoon oudits betekenisloos is as daar geen verbetering in dienslewering is nie. Literatuur het aan die lig gebring dat nuwe hervormings van openbare verkrygings, insluitend die wetgewende konsolidasie van openbare verkrygings, dringend nodig is. Die hervormings het ook die professionalisering van openbare verkrygings ingesluit, die aanneming van e-regering en e-verkryging tegnologie. Daar is onderskeid gemaak tussen verkryging en voorsieningskanaalbestuur, terwyl die verkryging van openbare en private sektor ook gedifferensieer is. Sommige ooreenkomste is opgemerk, aangesien beide die privaatsektor en die openbare sektor een onderlinge doel het - om waarde vir geld te verkry gedurende die verkrygingsproses. Die navorser het ontdek dat die openbare sektor nie supply chain management uitvoer nie, maar slegs spesialiseer in een of twee elemente van die voorsieningskanaalbestuur. Leenders en Fearon (2004: 10) voer aan dat die voorsieningskettingbestuur 'n sistematiese proses is wat die hele sinergie tussen grondstowwe, dienste en inligting van die R&D-stadium fasiliteer tot die eindverbruiker wat 'n finale produk ontvang. Die openbare sektor doen selde R&D en ontwikkel nie, vervaardig en bemark produkte nie en voer dus slegs enkele voorsieningskanaalbestuurselemente, hoofsaaklik verkryging en sommige logistieke bestuur vir geselekteerde regeringsinstellings. Dit is dus die navorser se voorlegging en bydrae dat enige organisasie nie die hele bestuurskettingbestuursproses mag uitvoer nie, aangesien elkeen spesialiseer in een of enkele voorsieningskanaalbestuurselemente. Die studie het bespreek hoe openbare sektor-verkryging van sommige van die goeie praktyke van die privaat sektor kan leer, aangesien kommunikasie, produkbuigsaamheid en innovasie tussen regeringsinstansies en verskaffers baie beperk is weens sommige voorgeskrewe voorskrifte. Die vorme van korrupsie in openbare verkrygings en die gevolge daarvan vir dienslewering is saam met maatreëls om dit te bekamp bespreek. Die navorser het die beginsels van regsbeginsels en goeie bestuur ingestel met sy drie sleutelrolspelers as nuwe maatreëls om korrupsie op die gebied van openbare verkryging te bekamp. Suid-Afrika het nie 'n wet op openbare verkrygings deur die parlement aangeneem om spesifiek die verkryging van openbare verkrygings aan te spreek nie. Suid-Afrika het ook nie e-regering- en e-verkrygingstegnologieë in openbare verkrygingsbedrywighede aangeneem nie. Verder het Suid-Afrika nie 'n onafhanklike en onpartydige regeringsreguleerder nie; Daarom het die navorser se waarnemings gedwing om gevallestudies in drie Afrika-lande, naamlik Kenia, Zambië en Zimbabwe, in werking te stel wat operasionele openbare aankoopprosedures aangegaan het, die modernisering van die openbare verkryging aangeneem en ook operasionele regerings vir die verkryging van regerings. Die drie gevallestudies het drie hooflesse vir Suid-Afrika geopenbaar oor hoe die drie lande in die eerste plek bestuur het om gespesialiseerde owerheidsverkryging jaarliks te implementeer en te implementeer. Tweedens, hoe hulle daarin slaag om e-regering en e-verkryging tegnologie beleid te promulgeer en te implementeer. Die derde les was om die verkrygingsreguleerder selfstandig te vestig en onpartydig toesig te hou oor openbare verkrygings in hul lande. In 'n poging om die hoof onbeantwoorde vraag hierbo te beantwoord, is beide kwalitatiewe en kwantitatiewe navorsingsmetodes toegepas (hibriede navorsingsmetode) om triangulasie te verseker. Kwantitatiewe metodes het 'n swakheid omdat hulle nie die konteks waarin respondente hul antwoorde volledig verstaan nie, terwyl kwalitatiewe metodes die navorser se idees dikwels "stoot", wat as subjektief beskou kan word. Om hierdie redes is die hibriednavorsingsmetode gekies om seker te maak dat die sterk punte van kwalitatiewe metodes die tekortkominge van kwantitatiewe metodes en omgekeerd teenwerk. Die studiepopulasie bestaan uit staatsverkrygingswerkers, wat wissel van praktisyns tot hoofdirekteure in vyf hoofdiensleweringsdepartemente (provinsiale en nasionale) van Gesondheid, Openbare Werke, Menslike Nedersettings, Maatskaplike Ontwikkeling en Vervoer, en een groot munisipaliteit in elk van die nege provinsies. Aangesien dit nie moontlik is om die hele relevante bevolking te ondervra of te ondersoek nie; Die bevolkingsmonster was beperk tot 352 verkrygingswerknemers. Opname vraelyste, onderhoudsgidse en dokumentresensies is gebruik om data te versamel. Vraelys data is geanaliseer met behulp van SPSS, e-Views 9.5 en Microsoft Excel. Alle antwoorde is grafies voorgestel volgens die vraelysreeks. Kwalitatiewe data is deeglik ontleed, wat gelei het tot die ekstrapolasie van algemene temas wat die tematiese analise ingelig het om gemeenskaplike ooreenkomste in respondente se menings te pas. Die navorser het geldigheid, geloofwaardigheid en hoë standaard van data kwaliteit verseker gedurende die studie. In hierdie studie is verskeie geldigheidsmaatreëls gebruik om die respondente se antwoorde en opinies oor dienslewering en wetgewing oor openbare verkryging te evalueer. Konstrueer geldigheidsmaatreëls getoets hoe goed die resultate korreleer met die hersiene teorieë en studiehypotese. Die studie resultate is geïnterpreteer teen die agtergrond van die hoofhipotese, wat voorgestel het dat "wetgewende praktyke van openbare verkryging 'n negatiewe uitwerking op dienslewering het", wat deur Hoofstuk 6 resultate bevestig is. Die studie het ontdek dat die fragmentering van wetgewing oor openbare verkrygings dienslewering vertraag omdat daar nie 'n sentrale wetgewende aanspreeklikheid is om aankope prestasie te monitor nie. Kwalitatiewe respondente het ook ingestem dat "sommige van die voorskrifte uitgereik word sonder konsultasie met openbare verkrygingspesialiste of praktisyns in nasionale en provinsiale departemente, openbare instellings en munisipaliteite". Verder word die beste verkrygingspraktyke en -prosedures nie ontwikkel en oor alle regeringsinstellings gedeel nie. Verskillende sienings van senior amptenare van die hoof van die hoofverkrygingsbeampte (OCPO) het egter aangedui dat vertragings in dienslewering nie altyd weens gefragmenteerde wetgewing is nie, maar soms weens swak verkrygingsbeplanning, nie-nakoming en doelbewuste manipulasie van voorskrifte vir openbare verkryging. 'N Algemene rede wat deur die respondente gegee is, was dat "verskillende besluite geneem word op verskillende plekke en vlakke wat onnodige regeringsbureaukrasie tot gevolg het." Die studie het 'n element van politieke inmenging in openbare verkrygings openbaar wat beskou word as vertraging van dienslewering. Die studie het aanbeveel dat 'n gespesialiseerde Nasionale Biedappèltribunaal (streekgebou) aangestel word met Hoofstuk 9-instansies, wat dringend nodig is om regskoste vir beide regerings- en diensverskaffers te verminder. Alhoewel persepsies voorgestel het dat die OCPO nie onlangse hofuitsprake oorweeg tydens die uitreiking van opdragte nie; die studie het geen wesenlike wetenskaplike bewyse gevind om so 'n idee te ondersteun met 'n gekombineerde 52 persent van die respondente wat nie saamstem nie. Die Nasionale Tesourie behoort 'n eenheid onder die OCPO te vestig om te fokus op die ontleding van hofoorwegings rakende openbare verkryging en adviseer wetgewers dienooreenkomstig. Die studie het ook aanbeveel om 'n oorsig te gee van sommige wetgewing wat die volle aanvaarding van strategiese verkryging in staatsaankope belemmer. Die studie is bedoel om die nasionale tesourie behulpsaam te wees met die behoorlike bestuur van wye konsultasie met alle verkrygingspesialiste in al drie die sfere van die regering en deur versigtig op te stel, raad te gee, hofuitsprake te ontleed, die implementering van hervormings van openbare verkrygings in Suid-Afrika bekend te maak en te rig. In die lig van bogenoemde opsomming van aanbevelings, is 'n doeltreffende en effektiewe Aankooppraktyke versus diensleweringsnormatiewe model ontwikkel en voorgestel om sommige van die bogenoemde aanbevelings te bereik.Doctora