Supplier Development and Localisation Execution Support Ishmael - - PowerPoint PPT Presentation

Ishmael Modiko

Supplier Development and Localisation

Execution Support

We have a mandate to contribute positively to the development of the country

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Our mandate is to achieve maximum and sustainable local development impact through leveraging Eskom’s procurement spend in a manner that allows flexibility within the business in order to accommodate government local development initiatives and policies

One of the growing issues in South Africa

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Current unemployment rate is 29%

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SD&L measures impact along these key performance areas

Definition Key performance areas

• Increasing the skill base (number and skill level) of

South African workers in areas relevant to the energy sector and where there is a national scarcity of skills Skills development

• Utilisation of Eskom and suppliers’ spend to

develop South African based suppliers relevant to the energy sector (focusing primarily on BBB-EE Black Owned and youth owned suppliers) Local content

• Utilisation of Eskom and suppliers’ spend to foster

the establishment of new competitive industries in the energy sector Industrialisation

• Creation of new jobs by suppliers as a direct result
• f Eskom business

Employment and job creation

• Providing a platform to develop emerging

suppliers, and further contribution to local developmental opportunities for national and international suppliers Supplier development

SD&L evaluation criteria (Condition of Tendering)

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• 1. Contractual conditions

The tenderers will be required to commit to the following SD&L objectives which shall be included in SD&L condition of contract:  Use of local resources to render this services  Proposal on jobs to be created as a result of this tender (depended in supplier’s proposal),  Skills development to be effected within the duration of this tender, and The elements of the SD&L objectives will form part of the contractual requirements to be negotiated at contract signing stage. Nevertheless, the SD&L contractual requirements are required as a returnable document to be incorporated as a condition of contract with the successful tenderer.

• 2. Supplier Development

Incubation/Sub-contracting: Successful tenderer will be required to identify a development candidate and contribute towards its development through the incubation and subcontracting, amongst others. Minimum of 10% of the downstream value chain to be used for the SME development purposes in areas like material’s management (material handling and storage), clearing and forwarding, after sales support services, procurement of resins and transportation thereof and or any other subcontracting/incubation opportunities that can identified. The main supplier will be required to select from a list of 51% or more black owned companies will be made available to the main contractor after contract award. Then the main contractor will do their own gap analysis and evaluation to identify any shortfalls that they need to address and help the incubate(s) to improve. The winning bidder will put together a program that will help the identified candidate to improve and be able to add value in the downstream value chain. The main contractor shall use the incubate(s) as a sub-contractor then monitor its development and report to Eskom on regular basis but not limited to Eskom performing its own audits. This process will also contribute in increasing the players in this industry and help in creating more jobs and competition in the industry, which will result in changing the land scape of South African economy.

• 3. Local Procurement

Eskom prefers to do business with companies that have local footprint, nevertheless, based on the above market analysis conducted, tenderers will not be expected to set up plant locally in this instance. They will be required to utilise South African labour once the product get to SA

• shores. This will be in the area of forwarding and clearing, storage (material handling) and delivery to Eskom sites which should done by South

African company.

SD&L undertaking to be completed and returned

• 4. SD&L skills development targets {It will form part
• f negotiations} based on the duration of contract

6 South Africa is faced with a serious challenge of critical skills and Eskom is mandated to play a critical role in honing the required skills. It is on that bases that successful tenderer will be obligated to train 1 candidate for every R3 Million cumulated through purchase orders awarded; this obligation will be for the duration of the contract (refer to table 3.3.1) however supplier needs to demonstrate positive progress on quarterly basis. The duration of the purchase order will not be linked with the supplier’s obligation to train; therefore the supplier will have to ensure that the skills committed are successfully achieved as per work allocated to them. Skills development candidates shall be sourced from previously disadvantage groups in South Africa, particularly within the proximity of the delivery site. The purpose is to provide these candidates with skills and workplace experience in order to increase the opportunity for them to be employable within the industry as well as assist those who are struggling financially during their schooling. The tenderers may develop the candidates directly, through their supply network or through the SETA accredited training providers. An amount of R50 000 for Bursary scheme (supplementary bursary) per student will cover any outstanding fees and/or accommodation and/or meals and/or books and/or registration fee and/or previous outstanding fees or combination of all the above depending on the situation. The amount can be used to benefit more than one student but it should be fully utilised (i.e it will recognised as one skill). The supplier will be fully responsible for the process to appoint the students. The supplier will also work together with universities to appoint students and the universities will generate invoices for payment done by supplier. Thereafter submit proof of payment and other necessary documents to Eskom monitoring and reporting team. Skills development candidates should be currently unemployed graduates from local TVET Colleges and universities and/or matriculants. The composition

• f the candidates shall be representative of the population demographics of South Africa particularly at the site where delivery is taking place.

. The monitoring and report will provide implementation schedule and supplier data collection templates to ensure that the above obligations to train candidates are achieved successfully through regular monitoring of task order value awarded to suppliers.

• 5. Remedy for compliance

Skills development requirement will be negotiated, agreed to and will form part of the NEC contract then they shall be monitored on quarterly basis throughout the duration of the contract to ensure all the obligations and undertakings are fulfilled. Failure to achieve the agreed and contracted SD&L requirement will result in 2.5% retention but not limited to allocated task order(s) being given to an alternative service provider. The 2.5% retention will be deducted from all outstanding payment or future invoices and released only after SD&L obligations has being satisfied.

Skills Type Estimated number of candidates to trained Learnerships (Industry Related) 46% Bursaries (Industry Related) 50% Logistics (Industry Related) 4%

B-BBEE certification/sworn affidavit evaluations

Points allocation Pre-qualification (gatekeeper) 10%

• B-BBEE - Levels

(see below score card)

7 Please sign and return SD&L undertaking for evaluation whether is accepted/reject then negotiate

Tenderers will be evaluated in accordance to PPPFA regulation of 2017, where the suppliers will be allocated 10 points as per B- BBEE scorecard below (valid B-BBEE certificate that are SANAS accredited as a mandatory returnable). The tenderers will be required to submit valid B-BBEE certificates, failure to submit a valid B-BBEE certificate or submit B-BBEE certificate that has expired, will result in supplier scoring zero. Supplier that will be Joint Venturing (JV) will be required to submit a valid JV B- BBEE certificate in the name of the JV, that is SANAS accredited and not expired. Failure to submit the above requirements it will result in JV scoring zero.

Eskom requires tenderers to submit an SD&L Undertaking as per the following specified targets regarding the various SD&L initiatives. The SD&L Undertaking requires tenderers to commit to various SD&L objectives such as job creation, skills development, enterprise development etc. The SD&L Undertaking is required as a returnable document and incorporated as a condition of contract with the successful tenderer. Tenderers who fail to submit the SD&L undertaking within such period as Eskom may require, will be disqualified, however, if tenderers submit the Undertaking but do not meet the targets in full, the tenderer will not be disqualified. Eskom may use this as a negotiation point.

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B-BBEE Evaluation Scorecard (90/10)

B-BBEE Status Level of Contributor Number of points (90/10 system) 1 10 2 9 3 6 4 5 5 4 6 3 7 2 8 1 Non-compliant contributor

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Success Stories

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GX success story

Eskom target was 21 candidate GX achieved 21 candidates to date Jobs created: 61 Job retained: 58

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GX success story

Created Jobs: 4 Issued 1 Bursary Invested in refrigerated bakkie

PPE panel contract

Created Jobs: 4 Issued 1 Bursary Invested in refrigerated bakkie/ borrowed cold room Created Jobs: 15 Issued 11 Bursary Learnership: 13 candidate benefited Invested in delivery bakkie/ machinery/ storage/offices

Who is Econ Oil

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Econ oil is 100% black woman owned company, that started as non-value adding distributors to blending and transporting fuel oil. They also managed to

• pen few deports in
• rder to improve turn

around time. Today Econ Oil is supplies 16 million litres of fuel oil per month, all because

• f Eskom suppliers

development initiative.

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FFS success story

6 black youth companies got bakkies tanker/pump each and 5 schools got science lap kits

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Engineering and fleet management success stories

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SHEQ Contract

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64 Students Benefited

BURSARY STUNDENTS

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