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Local Government: Municipal Finance Management Act, 2003 (Act No. 56 of 2003)


Municipal Cost Containment Regulations, 2019

5. Use of consultants


(1) A municipality or municipal entity may only appoint consultants if an assessment of the needs and requirements confirms that the affected municipality or municipal entity does not have the requisite skills or resources in its full -time employ to perform the function.


(2) An accounting officer must adopt a fair and reasonable remuneration framework for consultants taking into account the rates—
(a) determined in the "Guideline on fees for audits undertaken on behalf of the Auditor-General of South Africa ", issued by the South African Institute of Chartered Accountants;
(b) set out in the "Guide on Hourly Fee Rates for Consultants ", issued by the Department of Public Service and Administration; or
(c) as prescribed by the body regulating the profession of the consultant.


(3) The tender documentation for the appointment of consultants must include a clause that the remuneration rates will be subject to negotiation, not exceeding the applicable rates mentioned in subregulation (2).


(4) When negotiating cost-effective consultancy rates for international consultants, the accounting officer may take into account the relevant international and market-determined rates.


(5) When consultants are appointed, an accounting officer must—
(a) appoint consultants on a time and cost basis with specific start and end dates;
(b) where practical, appoint consultants on an output-specified basis, subject to specific measurable objectives and associated remuneration;
(c) ensure that contracts with consultants include overall cost ceilings by specifying whether the contract price is inclusive or exclusive of travel and subsistence disbursements;
(d) ensure the transfer of skills by consultants to the relevant officials of a municipality or municipal entity;
(e) undertake all engagements of consultants in accordance with the Municipal Supply Chain Management Regulations, 2005 and the municipality or municipal entity's supply chain management policy; and
(f) develop consultancy reduction plans to reduce the reliance on consultants.


(6) All contracts with consultants must include a fee retention or penalty clause for poor performance.


(7) A municipality or municipal entity must ensure that the specifications and performance are used as a monitoring tool for the work to be undertaken and are appropriately recorded and monitored.


(8) The travel and subsistence costs of consultants must be in accordance with the national travel policy issued by the National Department of Transport, as updated from time to time.


(9) The contract price must specify all travel and subsistence costs and if the travel and subsistence costs for appointed consultants are excluded from the contract price, such costs must be reimbursed in accordance with the national travel policy of the National Department of Transport.