Defence Acquisition Management: briefing

Defence

08 March 1998
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Meeting report

JOINT STANDING COMMITTEE ON DEFENCE

JOINT STANDING COMMITTEE ON DEFENCE

9 March 1998

DEFENCE ACQUISITION MANAGEMENT: BRIEFING

Document handed out: Acquisition Management Process (was not made available to the public).

Representatives from the Defence Department and Armscor met with the Committee. The structure of future armaments acquisition was looked at. An acquisition decision is made via a mini-Defence Staff Council consisting of the Minister of Defence, Chiefs of the Army, Navy and Air Force and the Armaments Acquisition Control Board. The Minister must then inform Parliament through the Joint Standing Committee On Defence.

The Committee chairperson, Mr. Yengeni, stated that he had recently been embarrassed when the Press queried him about some short-listing of acquisitions since he had not been informed about this by the Acquisitions Board. Another member added that one has to rely on the Press rather than the Acquisitions Board for information about RFPs (Requests for proposals - initial tender process). Ms Modise pointed out that decisions about the purchase of routine spares is not being referred to the Committee although this is where most expenses and scandals occur.

Mr Schaik, head of the Acquistion/Procurement desk in the Defence Secretariat, said that transformation involved the establishment of a single nodal point for procuring and controlling spares acquisitions. This nodal point would make the decisions rather than ad hoc acquisitions by the procurement offices. During the next few weeks steps will be taken regarding this restructuring of the Department of Defence. He admitted that currently even R2 to 3 billion projects are not properly controlled and the Department is determined to stop "cost-creeping" on projects.

Mr Yengeni wanted to know what was the purpose of the Armscor Board. Mr Shaik replied that the Minister feels that Armscor should be the tender board and further clarity will follow when the green paper becomes a White paper. The Green Paper on the armaments industry is still being drafted.

Armscor is restructuring to be an acquisition agency for the Department of Defence. Its function is being defined during these "lean" years. The major part of the Defence budget is going towards running cost with cuts in acquisitions. But Mr Schaik hopes that the percentage of the Budget spent on acquisitions will increase and thus provide a role for Armscor. In the meantime it remains in holding pattern. The service payment to Armscor has been cut leading to the retrenchment of personnel..

Mr Yengeni pointed out that the Acquisition document can only be "ad hoc" because it is not known when the Green Paper process will be completed. Mr Mashimbye said that the document should have more meat if they were to be briefed on RFPs, Countertrade, Affirmative purchases and so on.

Both the committee and the department recognised the importance of educating South Africans that the defence industry is vital and the need for winning the confidence of all South Africans. However the Department of Defence said that it would be difficult to bring NGOs on board given their strongly-held views that South Africa should not support a defence industry.

The State is the largest contributor to research and development in the private sector. However South Africa generally spends too little on research and development, hence the apparent perception that too much on research and development

The BMATT report was raised. The chairperson had been informed by the Minister of Defence that General Otto needs more time to respond to the BMATT report. Mr Yengeni will tell the Minister that the Committee looks for an explanation before the Easter parliamentary recess.

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