Development and implementation of adequate administrative procedures relating to the advertising, invitation, opening, registering and recording of bids. Disqualification of bidders who are inherent risks such as those who were found guilty of fraud or who failed to comply with previous government contracts. Elimination of prospective contractors who have conflict of interests in specific tenders by implementing a system in terms whereof bidders are obliged to disclose any form of conflict they possibly may have. Risk management should therefore form part of the business plan for the acquisitioning of all goods and services. 5.2 INSURANCE (a) Any of the following, or a combination thereof, should be applied to protect the interests of the municipality in the procurement process: That insurance is taken out in deserving cases. That risk management programmes are established. That liquidated damage clauses be included in contracts where applicable. (b) Suitable arrangements should also be made to ensure that insurance related excesses do not cause the failure of emerging small and micro enterprises. GUARANTEES (a) Performance guarantees should be commensurate with the degree of contractual risk to which THLM are exposed. (b) In cases of large and complex contracts, it is advisable to call for bid guarantees to circumvent the submission of irresponsible bids. (c) Performance guarantees should spread the cost of the risk of failure between the contracting parties and should be set at such a level that all THLM costs relating to such failure are likely to be recovered. (d) It would be prudent to make adequate provision in all engineering and construction works contracts to ensure that monies are available to rectify defects. (e) Performance bonds in engineering and construction works contracts should be waived in low value, low risk contracts or where a third party carries the risk of failure in an acceptable manner.
Development and implementation of adequate administrative procedures relating to the advertising, invitation, opening, registering and recording of bids. Disqualification of bidders who are inherent risks such as those who were found guilty of fraud or who failed to comply with previous government contracts. Elimination of prospective contractors who have conflict of interests in specific tenders by implementing a system in terms whereof bidders are obliged to disclose any form of conflict they possibly may have. Risk management should therefore form part of the business plan for the acquisitioning of all goods and services. 5.2 INSURANCE (a) Any of the following, or a combination thereof, should be applied to protect the interests of the municipality in the procurement process: That insurance is taken out in deserving cases. That risk management programmes are established. That liquidated damage clauses be included in contracts where applicable. (b) Suitable arrangements should also be made to ensure that insurance related excesses do not cause the failure of emerging small and micro enterprises. GUARANTEES (a) Performance guarantees should be commensurate with the degree of contractual risk to which THLM are exposed. (b) In cases of large and complex contracts, it is advisable to call for bid guarantees to circumvent the submission of irresponsible bids. (c) Performance guarantees should spread the cost of the risk of failure between the contracting parties and should be set at such a level that all THLM costs relating to such failure are likely to be recovered. (d) It would be prudent to make adequate provision in all engineering and construction works contracts to ensure that monies are available to rectify defects. (e) Performance bonds in engineering and construction works contracts should be waived in low value, low risk contracts or where a third party carries the risk of failure in an acceptable manner.
SCM%20policy%202014-2015.docx