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Administration
Supply chain management report
Agenda #7August 20, 2026
Summary
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The supply chain management report for the period 1 April 2026 to 30 June 2026 and annual report for 2025/26 will be presented for noting.
Supply chain management (SCM) is the process by which a municipality buys goods, services and infrastructure works. In South Africa, it is governed by section 217 of the Constitution. That section requires procurement to be fair, equitable, transparent, competitive and cost-effective. The Municipal Finance Management Act (MFMA, Act 56 of 2003) and the Municipal Supply Chain Management Regulations (2005) implement this at local level. Section 111 of the MFMA requires each municipality to adopt an SCM policy. Under the SCM Regulations, the accounting officer (the City Manager) must report on how the policy is implemented. These reports are normally submitted quarterly to the council, and an annual report is submitted as well. The report is "noted", so councillors do not vote to approve it. It is a transparency and oversight tool.
These reports usually cover tenders awarded above set thresholds. They also cover deviations from normal procurement, such as emergency or sole-supplier purchases, and the performance of the bid committees. Other typical items are the use of preferential procurement points and the treatment of local and small businesses. The report for April–June 2026 covers the last quarter of the 2025/26 financial year, so it ties into the City's annual report and audit process.
This matters because procurement is one of the largest areas of municipal spending, and it is also a recognised corruption and irregular-expenditure risk. The Auditor-General reviews it each year. South Africa is also moving to a new national procurement framework under the Public Procurement Act of 2024. The Act is intended to standardise rules across the public sector and may change how municipalities report on procurement in future. The City publishes council agendas and reports on its official website, cityofcapetown.gov.za.
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