'Modernising govt’s procurement system is best defence against corruption'
It’s understood govt can pay a premium of 40 to 50% on the value of major infrastructure contracts.
CAPE TOWN - Chief Procurement Officer Kenneth Brown says the government can pay a premium of as much as 40 to 50 percent on the value of major infrastructure contracts.
Brown says this is largely because state officials rely on professionals to decide what is needed and to determine the specifications of big projects.
He was speaking at a seminar in Cape Town looking at whether taxpayers are getting bang for their bucks when it comes to state spending on goods and services.
Brown says modernising the government's procurement system is the best defence against corruption.
The government spends about R500 billion a year on goods and services, ranging from the supply of pens and paperclips to mega-billion infrastructure projects.
"Spending on infrastructure procurement is big business. We easily pay a premium of 40 to 50 percent on any of our infrastructure programmes."
Brown says there is a perverse incentive for professionals tasked with drawing up the specifications of a major project because they usually charge around 10 percent of the total value, which encourages them to cost projects at a far higher value.
He is at the head of a major drive to tighten up procurement across government and to make it more transparent and efficient.