• During the Budget Speech 2024, Minister of Finance Enoch Godongwana revealed the shortfalls of government’s procurement process for ICT hardware.
• The minister revealed that government spends as much as twice the market price for equipment including laptops, monitors and printer toner.
• The minister didn’t outline how government intends to curb this overspending.

During the Budget Speech 2024, Minister of Finance Enoch Godongwana mentioned the government’s procurement process for ICT hardware including laptops and other technology. Of note were the shortfalls in those processes.

“Too often, there is a substantial disparity between the prices government is being charged and the prevailing market prices,” Godongwana said.

“For instance, the government buys ICT hardware such as laptops, uninterrupted power supply devices, monitors, and toners, at between 1.2 and 2 times more than market price. Given that government buys in large quantities, we should in fact be paying less and leveraging our buying power to get more value for our money,” the minister added.

The revelation that the government is spending as much as double the market price for ICT hardware is rather alarming when read alongside the tight budget Gondongwana presented.

The question now is where this additional cost is coming from. We understand that ICT hardware suppliers would want to make as much money as possible but ultimately the decision to buy or not to buy rests with the government.

Beyond that, the procurement process for ICT hardware should include a tender process. This process would see multiple suppliers submitting proposals for ICT hardware provisioning and government should be picking the best and most affordable from those tenders.

“Obtaining value for money, as well as the principles of efficiency, transparency, and competition, remain paramount. And we want to assure South Africans that these principles are not incompatible with transformation,” Godongwana added.

Whether this is politicking ahead of an election in May remains to be seen but it’s worth noting that the minister didn’t elaborate on how Treasury plans to address this overspending.

The news that government is spending twice what it should is concerning given that the State Information Technology Agency (SITA) submitted several tender invitations this week as reported by ITWeb.

These tenders call for bids for hardware maintenance and support for the KwaZulu-Natal Department of Cooperative Governance and Traditional Affairs. There is also an invitation to submit bids to procure, maintain and support routers and network switches for the Department of Home Affairs among many others.

With so much overspending on tech, the government would do well to probe into why it is paying so much for technology. We sure hope government organisations and suppliers aren’t in cahoots in overcharging for hardware and then splitting the extra costs between themselves.

[Image – CC BY 2.0 Andri Koolme]