Contract negotiation and administration

We negotiate collaborative National Contracts and Framework Agreements as well as Individual Contracts for specific institutions. Wherever possible individual contracts are designed on a Transversal basis so they can easily be customised for use by all Members.

Collaborative contracts and associated savings are fundamental indicators of the Consortium’s performance.

During the 2022 financial year PURCO SA managed an extensive portfolio of product and service agreements with 652 contracted suppliers across South Africa and Namibia. Overall procurement spend by Members via PURCO SA contracts.

PURCO SA manages three types of contracts:

National Contracts or Framework Agreements are concluded on behalf of and are accessible by all Members. These umbrella agreements are typically for products and services required by all Members, where the collaborative purchasing influence of the Consortium can be brought to bear.

Examples of National contracts include travel, catering, stationery and cleaning supplies. The framework sets out the conditions under which the goods or services can be purchased throughout the period of the agreement, including terms such as price, quality, quantities and time-scales. Frameworks are beneficial for the PURCO SA buying community; they save Members from the need to issue repeated tenders or negotiate new contracts for common goods, works or services; and they lead to economies of scale, savings and reduced administrative burden.

Individual contracts are concluded on behalf of specific Member institutions and are typically unique to that institution. Examples include construction projects, computer systems development and student transport services.

As part of PURCO SA’s commitment to collaboration, PURCO SA enables its Members to “piggy-back” on each other’s individual contracts. Piggy-backing takes place when a Member elects to procure goods or services from a service provider who is already providing the same goods or services or similar to another Member (the procurement of which took place in the ordinary course). Importantly, the piggy-backing Member must enter into a contract that is identical or similar with respect to terms and conditions to the contract concluded between the service provider and the original procuring Member. The terms and conditions to facilitate such piggy- backing are detailed in the tender documents, contracts and SLA’s.

Spend via PURCO SA contracts
Spend through PURCO SA contracts has returned to and exceeds pre-pandemic patterns, and PURCO SA achieved its highest ever spend figures in the year to July 2022. Overall member spend via PURCO SA contracts increased by 21% YoY, ending the year at R2.22 billion.

TVET colleges represent 35% of PURCO SA Membership, and are responsible for 60% of tenders managed during the year. After another year of consistent spend growth (16%) the sector now accounts for 25% of Member spend

Member savings and rebates
In addition to the efficiency gains, shared knowledge and time savings that come from being part of the Consortium, Member institutions derived savings and rebates of R272 million for the year. This takes cumulative savings since 2010 to R2.15 billion. Total rebates attributable to Members totalled R59 million in 2022. Since 2010 PURCO SA has paid out R272 million to Member Institutions by way of rebates.