briefing presentation tender no: hp14/140
TRANSCRIPT
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Briefing to Prospective Bidders
Intervention to Enhance Finance and SCM Efficiencies
Tender No: HP 14/140
Presented by
Tom MoirFinance Stabilisation
11December 2014
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NDPW core businessNDPW operating contextProblem statementExpected outcomesSummary of scope of services requiredProject resourcing Project deliverablesOther salient pointsProject evaluationProject costing
CONTENTS
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NDPW Core Business
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Provider of accommodation for National government Departments
Enabler of sustainable economic growth through infrastructure development
Regulatory authority & leader in transforming the construction & property sectors
Lead co-ordinator in optimising state funding for job creation through Expanded Public Works Programme (“EPWP”)
NDPW Core Business
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NDPW Operating Context
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National Treasury approved establishment of PMTE in March 2006 – functions transferred 1 April 2013
PMTE focus – management of government’s national property portfolio
PMTE is currently being operationalised and transformed
Separate finance units for PMTE & Department Different basis of accounting
Modified cash for Department Accrual accounting for PMTE
12 centres of operations, 11 Regional offices & Head Office
NDPW Operating Context
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Problem Statement(Why this intervention?)
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Need to sustain the gains made with the stabilisation intervention
Historic negative outcomes starting to change
Main Account unqualified – various non compliance matters and performance management of concern
PMTE Qualified on the basis of: Irregular expenditureAccrualsLeases management
Audit outcomes
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Transaction types:Construction …………………..R 17,0 bn (49,4%)Leases …………………………R 14,5 bn (42,2%)Maintenance …..……………...R 2,9 bn (8,4%)
Root causes:Bid process ……………………R 24,9 bn (72,4%)Documentation ………………..R 5,4 bn (15,7%)Approval process ……………..R 3,0 bn (8,8%)Other ……………………………R 1,1 bn (3,1%)
Irregular Expenditure – R 34,4 Bn
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Operational gains made with the stabilisation project need to be enhanced to entrench improved efficiencies
Parallel transformation interventions Transfer of functions on 1 April 2013 Conversion to GRAP accounting standards in PMTE Impact of assets, liabilities, staff, etc. needs to be
accommodated Development of a financial system for PMTE
Inappropriate SCM delivery mechanismInadequate staff capacity and skills baseChange management to establish
Stakeholder buy-in Behavioural change
Problem statement (cont’d)
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Systems environment does not yet effectively support the operational requirements of Finance and SCM
Key SCM functions not aligned to functional requirements to maximise returns (Demand management)
Disjuncture with IDMS requirementsAudit and corrective action managementContract managementDocument control
Problem statement (cont’d)
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Expected Outcomes of this Project
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Highly effective finance and SCM units
Finance and SCM units designed to directly support operating
model of PMTE
Appropriately skilled staff that can function independently
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How can a sustainable solution be attained through this project?
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Design and develop
Review, assess and evaluate
Training and skills development
Sustainability through ………
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Summary of scope of Services Required
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Clear the root causes of negative audit findings in areas of Finance & SCM
Revamp the Finance and SCM units into centres of excellence that directly support the core business of PMTE in particular
Design systems that will effectively support the operations and management of these units
Manage the audit process with technical efficiency
Roll out a comprehensive Skills Transfer Programme for all affected staff
Conceptualise & implement a change management strategy
Summary of scope of services
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Project Resourcing
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Finance Managers ………………..……… 10Accountants ………………...……..……… 35SCM Specialists ……………………..…… 21Technical Advisor …………………..…..... 1Change Management Specialist ….….... 1IT Specialist ………………………….….. 1OD Specialist ………………………….… 1
Project Resources Recommended
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Project Deliverables
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Supply Chain Management
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Prescribed functional framework Demand Management (NB: link to IDMS) Acquisition Management (NB: link to IDMS) Logistics Management Disposal Management Risk Management SCM reporting and Monitoring Assessment of SCM performance
Supply Chain Management (SCM)
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Construction Management (Infrastructure projects)
Property Management (Leases, day to day maintenance, etc.)
Goods and services
SCM – Specialised Streams
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Policy framework approved by National Treasury for all specialised streams
Departmental policies to support the framework
Unit effectively organised to deliver on this diverse model
Prescribed business processes (SOP’s) for specialised streams
Systems design and set up to effectively support the model
Units’ staffing aligned to delivery requirements
Appropriate and extensive training to all affected staff
SCM: Operational requirements
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PMTE Finance
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Ensure finance requirements are catered for in ERP systems planning and development
Align finance functional requirements to latest business developments: Salaries management Movable assets Immovable assets module design and set-up Dovetailing systems requirements between finance and SCM GRAP compliance
PMTE Operationalisation
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Update /develop policies, processes and standard operating procedures in line with industry best practice and new systems processes
Develop blue prints to be used for systems enhancements and customisation
Re-align the job profiles and content of affected staff based on changed business processes and new systems capabilities and functions
Review, develop and enhance systems controls (e.g. segregation of duties embedded)
Provide comprehensive training to all affected staff
Policies, processes and SOP’s
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Assess the effectiveness of the current manual processes applied to detect and report on accruals and irregular expenditure
Review and update plans to automate the identification and reporting on accruals and irregular expenditure
Develop a model for itemised billing to user departments
Design blue prints for the customisation of the relevant systems to deliver such billing capability
Accruals, Irregular Expenditure and Debtors
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Ensure that the budgeting and reporting framework is configured to effectively manage the financial resources of the trading entity
Develop standard reports for internal and external use by all relevant stakeholders
Design standardised systems reports (e.g. dashboards and alerts), to improve the management of critical operational deliverables
Develop and implement a financing model and tariff structure that will direct the financial sustainability of the PMTE over a pre-determined period
Advise the PMTE on revenue generation strategies
Budgeting and reporting framework
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Other salient considerations for bid
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Tools of trade for deployed staff will be for the cost of the bidder
Project duration – estimated 10 to 12 months
Progress payments made on the basis of deliverables achieved
Deployed staff to remain unchanged per cycle
As the project progresses, the Department reserves right to request resources to be redirected due to changed circumstances & requirements
Formation of consortia for bid encouraged
Other salient considerations for bid
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Evaluation of bids
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Submission of bids in two envelope system will be applied Envelope 1: Technical proposal with all returnable docs sealed & clearly
marked Envelope 2: Financial offer sealed & clearly marked
As such, evaluation in two phases Phase 1: Functionality criteria considered Phase 2: Price & Preference of phase 1 qualified bids
Minimum score of 70 for qualification under functionality needed to proceed to phase 2 evaluation
Evaluation of bids
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Evaluation of bids – functionality criteriaFunctionality criteria Sub-criteria Weightin
gApproach paper detailing methodology
Functional transformation plan for SCM 10
Business re-alignment of the finance functions for PMTE and the main account
10
Organisational model & staffing
Experience of staff 15
Qualifications of staff 15Adequacy of quality assurance plan and tools
Quality of plan, tools proposed, experience and qualifications of resources to be applied
10
Tenderer’s experience wrt stated deliverables to comparable projects
Proven track record of turning around negative audit outcomes
10
Skills development plans (including systems)
Proposed subject matter and material 15
Training methodology 15TOTAL POINTS 100
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To ensure consistency for evaluation, the approach paper must be developed in a format that clearly indicates:
SCM transformation plan Enhancement of the PMTE finance function Skills transfer and development plans Audit management plan Change management strategy
Evaluation of bids – functionality criteria
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Project costing
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Cost must be fixed Costs must be all inclusive of inter alia:
Staffing costs Subsistence & travel Disbursements Any other related costs
Detailed schedule reflecting composition of the proposed cost
VAT must be included
Project costing
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GOOD LUCK &
THANK YOU