📑Stage 1: Planning

Planning for procurement starts with the establishment of a new Parliament, which usually follows a general election.

Five-year plans

Government is elected for a five-year term. For this term, it develops five-year plans, known as strategic plans or frameworks. The overall five-year plan of the government must reflect the objectives and plans of the National Development Plan, which set goals the government must reach by 2030. Five-year Strategic Plans are also produced by every government department at the start of a new term. Each financial year, running from 01 April – 31 March the following year, departments must also prepare an Annual Performance Plan.

Budgeting three years ahead

Budgets are organised in three-year cycles, known as the medium-term. In October, the Minister of Finance presents the Medium-Term Budget Policy Statement, which sets out how the government plans to budget to meet priorities over the next three years. Then in February, the annual budget speech outlines the priorities and funding for the coming financial year.

The planning cycle each year

National & provincial government planning cycle

In each calendar year, planning and budgeting flow as follows:

• In February, the President outlines the priorities of government in the State of the Nation Address (SONA). How these priorities will be funded is elaborated on by the Minister of Finance in the budget speech before the end of February.

• Organs of state must set out their annual plans in an Annual Performance Plan, published in March. These annual plans must also give effect to the 5-year strategic plan of the department, agreed at the start of the government’s term.

• The Annual Performance Plan provides a breakdown of the procuring entity’s objectives into quarterly targets.

• For example, the President may say in his SONA “government will replace mud school structures in the Eastern Cape with proper infrastructure”. This must be reflected in the Strategic Document and Annual Performance Plan of the Eastern Cape Department of Education.

Municipalities’ planning cycle

Municipalities have a slightly different planning and budgeting process and a financial year that runs three months later than the national and provincial departments, from 01 July – 30 June.

The public consultation process

The Treasury Regulations read with Public Service Regulations require the public to be consulted in this planning and budgeting process. This requirement is based on section 195(1)(e) of the Constitution. People's needs must be responded to, and the public must be encouraged to participate in policy-making.

Need identification

In order to meet the targets in an entity’s Annual Performance Plan, it must procure certain items. It must, therefore, plan what it will procure. This information is captured in a Procurement Plan.

Procurement Plans

• If a Department or Municipality sets a target, for example, of five schools in the 3rd quarter of the year (Q3), the requirement for services to build the schools should be reflected in the Procurement Plan for quarter one (Q1) and quarter two (Q2).

• A procurement plan contains all tenders that a procuring entity will undertake in a year. These tenders must be advertised, indicating what government plans to buy, and when.

• The procurement plan is revised quarterly – and is published by the OCPO.

• The provincial treasuries should publish the provincial procurement plans for provincial departments on the Provincial Treasury websites.

• Through their Procurement Plans, the Accounting Officers are stating they have the money to procure the services or goods contained in the procurement plan.

• Organs of state must conduct needs assessments and market/commodity analyses which will inform their procurement decisions.

Useful links

​Municipal Money allows us to monitor how municipalities manage our money. The tool is designed to inform citizens about their local authority’s financial performance and allows comparisons between municipalities.​