Introduction to Central Services Branch 14 FEBRUARY 2008 OUTSOURCING OF SERVICES AND USE OF CONSULTANTS: DEPARTMENT OF CORRECTIONAL SERVICES Introduction to Central Services Branch Building a caring correctional system that truly belongs to all 14 FEBRUARY 2008 1

SCOPE OF PRESENTATION WHAT IS OUTSOURCING ? WHY DO WE OUTSOURCE ? WHAT LEGISLATIVE FRAMEWORK INFORMS OUTSOURCING ? WHICH SERVICES ARE OUTSOURCED ? WHAT ARE THE BENEFITS OF OUTSOURCING ? IMPROVEMENT OF PROCUREMENT SYSTEM WHAT ARE THE AREAS TO IMPROVE ?

1. WHAT IS OUTSOURCING? Outsourcing refers to the practice of turning-over internal Departmental functions/services to an outside supplier.

2. WHY DO WE OUTSOURCE ? To source expertise and skills that are not available within the Department; The high turn-over and the inability to retain and match what the private sector is offering in terms of salary; Prolonged process of staffing; To allow the Department to refocus on its core function; Improve service delivery of the Department on the core services; Cont …

2. WHY DO WE OUTSOURCE ? Enhance better compliance to statutory requirements linked to the core services of the Department, e.g. Correctional Services Act, Act 111 of 1998 Give effect to other statutory requirements such as PFMA, PPPFA, Health and Safety Act, etc.; Cost benefits for the Department. Enhance effectiveness, efficiency and economical.

3. METHODS OF OUTSOURCING IN PUBLIC SERVICE Public Private Partnership informed by PFMA and Treasury Regulations Chapter 16 Convectional Procurement through the use of Treasury Regulations Chapter 16A (Supply Chain Management)

4. LEGISLATIVE FRAMEWORK THAT INFORMS OUTSOURCING Both these methods involve the application of the following acts: - South African Constitution (Act 108 of 1996) - Public Finance Management Act (Act 29 of 1999) Cont …

4. LEGISLATIVE FRAMEWORK THAT INFORMS OUTSOURCING - Broad Base Black Economic Empowerment Act (Act 53 of 2003) - Preferential Procurement Policy Framework Act (Act 5 of 2000)

4. LEGISLATIVE FRAMEWORK THAT INFORMS OUTSOURCING Correctional Services Act (Act 111 of 1998) White Paper on Corrections. Departmental Policies and Procedures.

4. OUTSOURCED SERVICES (PPP) Two prisons are outsourced by this method – Mangaung and Khutama Sinthumule; What has been outsourced regarding these two centres is: -Design of the centres -Building of the centres -Financing of the centres -Operating of the centres for a maximum period of 25 years Cont…

Training of personnel in hygiene related matters. 4. OUTSOURCED SERVICES Other services outsourced through the Procurement process are as follows: Transaction Advisor Services for Public Private Partnership. 24 Months R 11 400 000-00 Appointment of a consultant to assist DCS with Compliance and IT Audits. 36 Months ± R 7 897 000-00 Training of personnel in hygiene related matters. 24 months. R 1 812 500-00.

4. OUTSOURCED SERVICES Monitoring, analysing and advisory service of daily media for Media Service Unit. 24 Months. R1 881 000-00 Appointment of independent accredited service provider (SANAS) to inspect and test textile clothing footwear etc. 24 Months. ± R 5 720 000-00 Training of personnel in policy development. 8 Months. R645 000-00.

4. OUTSOURCED SERVICES Training of trainers on facilitation and presentation skills. 72 Days. R690 429-60. Training of professional nurses and medical practitioners on dispensing course. 6 Weeks. R 1 583 000-00. Training of junior and middle managers on management development program. 24 Months. R4 950 000-00. Development and training of executive and senior managers on leadership development program. 14 months. R4 632 500-00.

4. OUTSOURCED SERVICES Rendering of catering and training services at various Management Areas. 48 Months. R972 450 345-70. Supply, delivery, installation and commissioning of comprehensive access control and body scanning system (CCTV). 60 Months. R 88 794 800-31. Maintenance of control room after warranty. 48 Months R148 202 584-00.

4. OUTSOURCED SERVICES Supply, delivery, installation and commissioning of security outer perimeter fences and CCTV surveillance cameras. 60 Months. R436 185 110.35 Maintenance of above. 48 months. R50 752 800-00. Rendering of full facilities management services which include catering services). 60 Months. R123 253 955-65. Rendering of cleaning services Head Office. 24 Months. R2 496 216-24.

4. OUTSOURCED SERVICES Supply, delivery, installation, commissioning of television system and monitors at all Correctional Centers. 60 Months. R159 000 000-00 Maintenance of the above after a warranty of 12 months. 48 months. R65 364 480-00 Emanating from recommendations of the Public Service Commission and Jali Commission, credible systems for HR Provisioning (Recruitment, Selection and Appointments) needed to be formulated which resulted in the use of External Service Providers, Named below:

4. OUTSOURCED SERVICES RECRUITMENT AGENCIES SERVICE PROVIDER AMOUNT Pinpoint One R4 778 046.60 ITP R7 514 546.20 Grey Consulting R2 739 797.50 Lumka R26 583.75 Leadway R33 495.02 Jobvest R36 079.77 Human Communications R233 586.94 TOTAL R15 362 135.78

5. BENEFITS OF OUTSOURCING Capacity building during the running of the contract; Focus more on the core business of the Department; Risk transfer; Enhancement of the quality of service delivery; Value-for-money; Penalty clause can be effected on non-performance and poor services. A significant reduction on corruption-related allegations in the Department’s recruitment processes . The use of Service Providers has significantly contributed to the Department’s establishment growth as indicated hereunder:

IMPACT: USE OF EXTERNAL SERVICE PROVIDERS

5. IMPROVEMENT IN PROCUREMENT SYSTEM Effective from March 2004, Supply Chain Management was implemented within the Department. Structures were put into place to ensure that procurement is operated in the manner which is fair, equitable, transparent, competitive and cost effective in compliance with the Constitution, Section 217, PFMA (section 38(iii)) and PPPFA.

5. IMPROVEMENT IN PROCUREMENT SYSTEM Structures are as follows : - National Bid Adjudication Committee Stationed at Head Office Handles bids exceeding R5 million to infinity Members are as follows : * All Executive Managers at Head Office Chairpersonship rotate amongst the CDCs

5. IMPROVEMENT PROCUREMENT SYSTEM Structures (Continue) - Sub-Bid Adjudication Committee : Stationed at Head Office and 6 Regional Offices Handles bids exceeding R200 000 to a limit of R5 million. Head Office * Managed by Senior Management at Supply Chain Management Regional Offices * Regional Heads Finance and Supply Chain Management officials

5. IMPROVEMENT IN PROCUREMENT SYSTEM All the members of the National and Sub-Bid Adjudication Committees are appointed in writing by the Accounting Officer. All Bid Adjudication members have signed the Code of Conduct .

5. IMPROVEMENT IN PROCUREMENT SYSTEM Duties of Bid Adjudication Committees : - Give final award based on the recommendation of Bid Evaluation Committees; - All necessary bid documents are submitted - Ensure that disqualification of service providers are justifiable and that valid and accountable reasons are furnished for passing over of bids

5. IMPROVEMENT IN PROCUREMENT SYSTEM Duties (continue) : - Ensure that scoring are fair, consistent and correctly calculated - Ensure that bidder’s Declaration of Interest has been taken into consideration - Ensure that members themselves declare their interest in writing before commencing with the adjudication of bids - These committees can extend the period of the existing contract and can also extend the scope of work according to the delegated powers.

5. IMPROVEMENT IN PROCUREMENT SYSTEM Structures (Continue) : - Bid Evaluation Committee Evaluate and recommends bids/proposals to relevant Bid Adjudication Committee Members are appointed in writing by the Accounting Officer Members differ from case to case based on the nature of the bid and the competency of the members in line with the bid to be evaluated This is an ad hoc committee Members must declare their interest in writing and sign Code of Conduct prior to the commencement of evaluation

6. WHERE CAN WE IMPROVE Conducting of stakeholder analysis; Comprehensive feasibility must be conducted before outsourcing any services; Promote the advantages of a proper procurement plan linked to strategic plan, operational plan, MTEF and budget; Maintain the gains and achievements; Improve contract management especially by end-users; Retain and deploy skills accordingly; Build capacity of project officers on project management.

THANK YOU Renewing our Pledge: A National Partnership to Correct, Rehabilitate and Reintegrate Offenders for a safer and secure South Africa 28