Security procurement transformation in state-owned enterprises: Outcome-based contracting implementation across critical infrastructure networks in South Africa
Keywords:
State-owned enterprises, Security procurement, Outcome-based contracting, Infrastructure protection, Performance measurement, Regulatory compliance, Cost optimisationAbstract
Security procurement across South African state-owned enterprises faces systematic challenges requiring comprehensive reform. Traditional guard-based contracting models consistently underperform while consuming substantial public resources across critical infrastructure networks. This research evaluates security procurement performance across multiple SOEs and assesses the potential for outcome-based contracting implementation for sector-wide adoption. The study examined security expenditure, performance metrics, and regulatory compliance across Eskom, Transnet, PRASA, ACSA, and SAA during 2022-2024. Results indicate traditional models achieve effectiveness rates below 30% despite combined annual expenditure exceeding R8.7 billion, while Transnet's outcome-based implementation demonstrates 89% theft reduction and R1.2 billion annual savings. Criminal infiltration analysis reveals 187 security personnel arrests across SOEs between 2022-2024, indicating systematic vulnerabilities in human-centric models. Contractor profit analysis shows margins exceeding 250% through guard wage suppression while maintaining poor service delivery outcomes. Comparative analysis validates outcome-based contracting superiority across cost-effectiveness (94% improvement), regulatory compliance (full alignment), and security performance (98% effectiveness rates). The research establishes empirical foundations for mandatory outcome-based contracting adoption as national policy, supported by legislative reform requirements and standardized implementation frameworks.
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Copyright (c) 2025 Remone Govender, General Tembela Kulu
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