Download MISA - Ameu

Municipal Infrastructure Support Agent
ELECTRICAL DISTRIBUTION
FRAMEWORK CONTRACTS
Presented by:
Chris J van Rensburg
to
-- AMEU -Date: 11 November 2015
Contents
 Background
 Applicable Regulation 32 of the Municipal
Supply Chain Management Regulations
 NEC 3 Contract
 Updated process and progress
 ESKOM Collaboration
 Way Forward
 Closing - questions
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Background on MISA
 The Municipal Infrastructure Support Agent
(MISA) was established in 2012 to develop the
capacity of municipalities to sustainably deliver
and manage infrastructure.
 To date, it has focused on providing technical
support to municipalities and training of
technical staff for municipalities.
 It has now extended its focus to also include
infrastructure procurement with the initial focus
of procurement of electrical distribution
equipment.
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Background on the process
 Project was initiated by the PICC in September 2012
 MISA mandated to coordinate the Project under
regulation 32 of the MSCMR (GG 27636 of 30 May 2005)
 The challenges faced:

Perception that prevailing legislation would prevent this from
being viable

Potential resistance by municipalities relating to issues of their
Supply Chain process

The question of “compulsory” vs. “optional” participation by
municipalities

Identification of a particular “Organ Of State” that can
participate positively in the process of Framework Contracts
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LOCAL GOVERNMENT: MUNICIPAL FINANCE MANAGEMENT ACT, 2003 MUNICIPAL
SUPPLY CHAIN MANAGEMENT REGULATIONS
Procurement of goods and services under contracts secured by other organs of state
32. (1) A supply chain management policy may allow the accounting officer to procure goods or services for
the municipality or municipal entity under a contract secured by another organ of state, but only if –
(a)the contract has been secured by that other organ of state by means of a competitive bidding process
applicable to that organ of state;
(b) the municipality or entity has no reason to believe that such contract was not validly procured;
(c) there are demonstrable discounts or benefits for the municipality or entity to do so; and
(d) that other organ of state and the provider have consented to such procurement in writing.
National Treasury is in the process of putting in place a Standard for Infrastructure Procurement and
Delivery Management which:
a) makes provision for framework agreements; and 5
b) permits one organ of state to make use of another organ of state’s framework agreement
NEC 3 Contract
 Previously New Engineering Contract
 Now NEC 3 contract
 Other types of contract: JBCC, FIDIC Silver book,
and GCC
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NEC 3 Contract
Consideration
 The NEC 3
NEC 3
JBCC
Contracting Strategy
Design by Employer
Management contract
Develop and construct
Design and Build
Pricing Strategy
Activity schedule
Lump sum
Bill of quantities
Cost reimbursable
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Target cost
GCC
FIDIC
NEC 3 Contract
Consideration
NEC 3
 The NEC 3
JBCC
FIDIC
YES
Red Book
NO
Silver Book
YES
Yellow and Silver
Contracting Strategy
Design by Employer
YES
Management contract
Develop and construct
GCC
YES
NO
Design and Build
Pricing Strategy
Activity schedule
NO
NO
NO
Lump sum
YES
YES
Yellow and Silver
YES
YES
RED
NO
NO
NO
NO
NO
NO
Bill of quantities
YES
Cost reimbursable
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Target cost
NEC 3 Contract
 NEC 3 approach
The NEC 3 family of contracts facilitates the implementation of
sound project management principals and practices as well as
defining legal relationships.
Drafted around three main objectives:
1. Stimulus to good project management
2. Clarity
3. Flexability
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Updated process
 MISA obtained the services of an individual to pursue the goal
with very little success and a lot of resistance.
 New CEO appointed and took the responsibility to complete
the project
 Various options discussed and workshopped

ESKOM chosen as the “Other Organ of State

It was agreed that Framework Contracts be put in place where
Municipalities and ESKOM could place orders against.

NT would scrutinise the ESKOM contract and propose additions for
legislative compliance and to develop the applicable model of
contract to be used.

MISA to be invited to all meetings involved in the Bid specification
process. MISA to invite and involve AMEU where applicable.
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ESKOM collaboration

Meetings held to compile NEC 3 contract framework

Specifications compiled from NRS, SANS 780 and “old” ESKOM
specifications

Identification of first procurement Item


Pole and Ground mounted transformers picked to be the pilot item
for sorting the “unknowns” of the contract

Process of bid specification agreed too by all parties

Existing contract with suppliers made available to NT and MISA by
ESKOM for studying and adoption/modification

Pole transformer specifications made available for scrutiny by MISA
and AMEU – NDC to be signed
ESKOM approved Framework Contract collaboration but
wanted a “Fire wall” between them and any other Organ of
State.
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Way Forward
 MISA will do Framework Contracts on it’s own

Electricity Distribution Equipment

Water and Sanitation

Roads and Storm Water

Solid Waste

Professional services
 Electricity Distribution Equipment

Pole and Ground Mounted Transformers

MV and LT Cables

Mini-substations

MV switches

Metering

± 35 other components
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[email protected]
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