CASE STUDY Although the South African Reserve Bank (SARB) is not subject to generally applicable public procurement

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CASE STUDY

Although the South African Reserve Bank (SARB) is not subject to generally applicable public procurement legislation, its policy provides for the application of best procurement practices, while taking into account the procurement principles entrenched in the Constitution of the Republic of South Africa Act 108 of 1996 (the Constitution) and legislation relating to preferential procurement. Section 217(1) of the Constitution states: “When an organ of state in the national, provincial or local sphere of government, or any other institution identified in national legislation, contracts for goods or services, it must do so in accordance with a system which is fair, equitable, transparent, competitive and cost-effective.”

The SARB’s procurement processes also adhere to generally applicable laws such as the Promotion of Access to Information Act 2 of 2000, the Promotion of Administrative Justice Act 3 of 2000 and the Protection of Personal Information Act 4 of 2013. SARB uses various procurement mechanisms, such as informal quotes, requests for quotations, requests for proposals or requests for tenders etc.

QUESTION 1 (30 Marks)

1.1 “The SARB may conduct any further due diligence checks it deems fit on participating suppliers and their designated sub-contractors and/or partners prior to the award of the bid” Explain with examples why SARB would disqualify a supplier. (10 MARKS).

1.2 When SARB and a supplier are working toward a final contract and wish to proceed with the project work under a formal agreement, SARB may issue a Letter of Intent (LOI). Briefly describe what may be contained in a letter of intent. (10 MARKS).

1.3 Assume that SARB awarded the contract to Amazwe group of companies. Amazwe fails to perform the contract adequately leading to a breach of contract with SARB. Explain what a contract breach is and what SARB can do to remedy the situation. (10 MARKS).