Procurement Risk:
High
Score:
41/100
57
50/100
Does the country have legislation covering defence and security procurement with clauses specific to corruption risks, and are any items exempt from these laws?
View Question
This indicator is not assigned a score in the GDI. South Africa’s legal framework for procurement is underpinned by section 217(1) of the Constitution…
Explore
The Public Finance Management Act establishes procedures for addressing financial misconduct including requirements that the accounting officer adopts systems to “prevent irregular expenditure, fruitless…
Explore
In the latest financial year, procurement irregularities were incurred to the value R553 million, amounting to 4% of the Department of Defence’s goods and…
Explore
58
67/100
Is the defence procurement cycle process, from assessment of needs, through contract implementation and sign-off, all the way to asset disposal, disclosed to the public?
View Question
The Public Finance Management Act requires public entities to develop their own procurement policies in line with the principles set out by National Treasury.…
Explore
Neither the Department of Defence nor Armscor charged with armaments acquisition and disposal publicly disclose internal procurement processes and policies. General guidance on procurement…
Explore
South Africa has clear and detailed procurement policies governing procurement in the defence sector. [1] There are, however, shortcomings in implementation with recurrent findings…
Explore
59
83/100
Are defence procurement oversight mechanisms in place and are these oversight mechanisms active and transparent?
View Question
The Auditor-General of South Africa is a key oversight mechanism for defence procurement and is independent and well-respected. The Department of Defence and Armscor…
Explore
The Auditor-General has expressed opinions over procurement irregularities such as in relation to the procurement of unregistered medication during the COVID pandemic, but has…
Explore
Findings of the Auditor-General are made public in Department’s Annual Reports [1] and consolidated reports on national and provincial audit outcomes [2]. They both…
Explore
Forward planning is informed by the Defence Review prepared in 2015 while acquisitions are determined as part of the Strategic Capital Acquisition Master Plan…
Explore
Neither the Department of Defence nor Armscor seemingly publish comprehensive notices of forward planning for defence purchases. [1] However, there is an Armscor public…
Explore
62
50/100
What procedures and standards are companies required to have – such as compliance programmes and business conduct programmes – in order to be able to bid for work for the Ministry of Defence or armed forces?
View Question
Bidders are required to sign disclosure form detailing conflicts of interest in terms of relationships to state employees or their own employment by the…
Explore
The Auditor-General has previously found that the Department of Defence has awarded contracts to bidders which have not submitted the required disclosure forms [1].…
Explore
63
50/100
Are procurement requirements derived from a national defence and security strategy, and are procurement decisions well-audited? Are defence purchases based on clearly identified and quantified requirements?
View Question
The process for identifying procurement requirements is generally comprehensive and is guided by the Defence Review as the highest-level strategy determining military posture. [1]…
Explore
Scrutiny of defence procurement by the Auditor-General and relevant parliamentary committees is largely concerned with regulatory compliance rather than alignment with high level strategies.…
Explore
The Department of Defence’s system for procurement planning is generally comprehensive and systematic, [1] but there are examples of large procurements seemingly made without…
Explore
64
63/100
Is defence procurement generally conducted as open competition or is there a significant element of single-sourcing (that is, without competition)?
View Question
South African procurement rules, per National Treasury regulations, establish open and competitive tendering as the default procurement method. [1] Deviations from open competition (such…
Explore
Public entities are required to request deviations from National Treasury to obtain approval for single-source procurements and in this way, National Treasury provides oversight…
Explore
65
69/100
Are tender boards subject to regulations and codes of conduct and are their decisions subject to independent audit to ensure due process and fairness?
View Question
Officials in sensitive positions such a procurement are required to submit financial disclosures to a central system [1] and all state employees are prohibited…
Explore
In the Auditor-General’s latest report for the Department of Defence it was indicated that the Auditor-General ” was unable to obtain sufficient appropriate audit…
Explore
Regulations for supply chain management processes are publicly available [1]. The main document is the 2003 National Treasury Regulations for Supply Chain Management, issued…
Explore
The Auditor-General of South Africa (AGSA) conducts routine audits of the Department of Defence (DoD), including reviewing procurement processes, tender specifications, and contract awards…
Explore
66
50/100
Does the country have legislation in place to discourage and punish collusion between bidders for defence and security contracts?
View Question
South Africa’s legal framework prohibits collusion among bidders through: Section 34 of the General Conditions of Contract, which defines “prohibited practices” including bid-rigging, price-fixing,…
Explore
The Prevention and Combating of Corrupt Activities Act establishes penalties for corruption related offices including criminal prosecution and fines with jail sentences varying according…
Explore
There is evidence that cases of collusion are investigated by relevant law enforcement bodies [1]. However, there is clear evidence of undue interference in…
Explore
National Treasury’s training programs for procurement officials do not include training on identifying collusion patterns [1]. Training provided to officials is primarily related to…
Explore
67
44/100
Are there mechanisms and procedures that ensure that contractors meet their obligations on reporting and delivery?
View Question
National Treasury’s Contract Management Guide includes guidance on monitoring and reporting on the delivery of service providers as well as on sanctioning procedures. [1]…
Explore
Procurement and contracting data for the defence sector is limited. The Department of Defence contract information is not available on the departmental website nor…
Explore
The Department of Defence uses legacy, non-integrated and stand-alone logistics and supply chain management information systems undermining the department’s ability to effectively monitor contract…
Explore
Effective contract management is severely undermined by a lack of capacity. The Department of Defence has revealed that a single project manager on average…
Explore
68
42/100
Are there mechanisms in place to allow companies to complain about perceived malpractice in procurement, and are companies protected from discrimination when they use these mechanisms?
View Question
South Africa has several anti-corruption hotlines to which the public can submit complaints regarding procurement irregularities and procurement disputes can be taken up through…
Explore
South Africa does not have a formal procurement dispute resolution mechanism and as a result, affected parties are forced to make use of protracted…
Explore
While it is difficult to determine whether companies avoid submitting complaints related to procurement for fear of retribution, there is significant evidence that whistleblowing…
Explore
Under the Prevention and Combating of Corrupt Activities Act, individuals convicted in terms of sections 12 and 13 of the Act dealing with offences…
Explore
Very few cases of corruption have successfully been prosecuted particularly in relation to the findings of the State Capture Commission which revealed significant evidence…
Explore
While criminal prosecution for fraud and corruption occurs, the rate of conviction is commonly considered inadequate [1]. Likewise, while individuals and companies have been…
Explore
70
0/100
When negotiating offset contracts, does the government specifically address corruption risk by imposing anti-corruption due diligence on contractors and third parties?
View Question
While offset agreements occur, South Africa does not have a legal or regulatory framework either prohibiting or permitting offsets [1]. It is worth noting…
Explore
While the South African government conducted some due diligence with regard to offset contracts and third party contractors, this was by no means effective…
Explore
Related to offsets, South Africa has used formal policy instruments to agree offsets, credits and monitor offsets through the Defence Industrial Participation (DIP) program…
Explore
Basic details of offset contracts have been made public, but are by no means shared in a comprehensive, transparent form. [1] Where available, this…
Explore
While the National Industrial Participation guidelines include provisions for monitoring trade offsets, [1] the Department of Trade, Industry and Competition has not released a…
Explore
There is clear evidence that the actual investment amounts regarding the offsets agreed under the Strategic Defence Package were significantly lower than anticipated. Additionally,…
Explore
In terms of the “Arms Deal”, the responsibility for the selection of subcontractors related to offsets rests with the main contractor with the caveat…
Explore
73
0/100
How strongly does the government control the company’s use of agents and intermediaries in the procurement cycle?
View Question
There are no controls over the issue of intermediaries and agents and there are numerous examples of agents supporting the bidding process [1] and…
Explore
South Africa has not restricted the use of intermediaries and no relevant provisions for restricting the use of agents are found in the Public…
Explore
74
0/100
Are the principal aspects of the financing package surrounding major arms deals, (such as payment timelines, interest rates, commercial loans or export credit agreements) made publicly available prior to the signing of contracts?
View Question
The details of major arms acquisitions are not made public including questions around financing packages and payment timelines. Pieces of information have, however, become…
Explore
75
NS/100
How common is it for defence acquisition decisions to be based on political influence by selling nations?
View Question
There is documented evidence of political influence shaping the acquisitions process related to the Strategic Defence Package with political figures in selling nations involved…
Explore
This indicator is not assigned a score in the GDI. Major purchases such as the Strategic Defence Package have supposedly been justified on the…
Explore
The identification of acquisition requirements is not necessarily driven by domestic pressures, but there is evidence that acquisition and procurement processes have been politically…
Explore
0
NA/100
View Question
Government Policy
Q57
NA/100
Does the country have legislation covering defence and security procurement with clauses specific to corruption risks, and are any items exempt from these laws?
View Question
Q58
NA/100
Is the defence procurement cycle process, from assessment of needs, through contract implementation and sign-off, all the way to asset disposal, disclosed to the public?
View Question
Q59
NA/100
Are defence procurement oversight mechanisms in place and are these oversight mechanisms active and transparent?
View QuestionCapability Gap and Requirements Definition
Q62
NA/100
What procedures and standards are companies required to have – such as compliance programmes and business conduct programmes – in order to be able to bid for work for the Ministry of Defence or armed forces?
View Question
Q63
NA/100
Are procurement requirements derived from a national defence and security strategy, and are procurement decisions well-audited? Are defence purchases based on clearly identified and quantified requirements?
View QuestionTender Solicitation, Assessment and Contract Award
Q64
NA/100
Is defence procurement generally conducted as open competition or is there a significant element of single-sourcing (that is, without competition)?
View Question
Q65
NA/100
Are tender boards subject to regulations and codes of conduct and are their decisions subject to independent audit to ensure due process and fairness?
View Question
Q66
NA/100
Does the country have legislation in place to discourage and punish collusion between bidders for defence and security contracts?
View QuestionContract Delivery and In-Service Support
Q67
NA/100
Are there mechanisms and procedures that ensure that contractors meet their obligations on reporting and delivery?
View Question
Q68
NA/100
Are there mechanisms in place to allow companies to complain about perceived malpractice in procurement, and are companies protected from discrimination when they use these mechanisms?
View QuestionOffset Contracts
Q70
NA/100
When negotiating offset contracts, does the government specifically address corruption risk by imposing anti-corruption due diligence on contractors and third parties?
View QuestionAgents / Brokers
Q73
NA/100
How strongly does the government control the company’s use of agents and intermediaries in the procurement cycle?
View QuestionFinancing Package
Q74
NA/100
Are the principal aspects of the financing package surrounding major arms deals, (such as payment timelines, interest rates, commercial loans or export credit agreements) made publicly available prior to the signing of contracts?
View QuestionSeller Influence
Q75
NA/100