Johnathan Paoli
President Cyril Ramaphosa has approved the Public Procurement bill, in an effort to create a single framework that regulates public procurement by all organs of State.
Vincent Magwenya, Ramaphosa’s spokesperson announced on Tuesday, that the President has signed the bill into law, complying with section 217 of the Constitution stipulating that the contracting of goods and services by the State must be in accordance with a fair, equitable, transparent, competitive and cost-effective system.
“As enacted by the President, the Public Procurement Act addresses weaknesses in the procurement of goods and services by organs of state that have in the past enabled various degrees of corruption, including state capture,” Magwenya said.
He said in light of the current situation in which legislation regulating procurement is fragmented and constrains justified advancement of the provision of goods and services; the legislation seeks to consolidate procurement security, effectiveness and regulation under one system.
“The law seeks to enhance transparency and integrity, among others, to combat corruption, ensure efficient, effective and economic use of public resources and advance transformation and broadened economic participation,” Magwenya said.
He praised the legislation as encouraging economic development, through the procurement of goods and services that are produced and provided in the country, saying it will be administered by the Finance Minister, and applies to all – departments, constitutional institutions, municipalities, and municipal and public entities.
Certain clauses of the act apply to Parliament and the provincial legislatures as well.
“The Act applies to all procurement carried out by a procurement institution (including procurement through donor or grant funding), any person who submits a bid or has been awarded a bid; and all procurement carried out by any person on behalf of a procuring institution,” he said.
Magwenya said the act lists persons who are barred from submitting bids for procurement including; public office bearers, legislative employees, and employees and officials from public entities, constitutional institutions, municipalities and municipal entities.
The new act is expected to replace stopgap rules put in place in January last year, after the Constitutional Court determined in early 2022 that the Finance Minister had exceeded his powers by prescribing procurement rules to organs of State.
The court found that regulations accompanying the Preferential Procurement Policy Framework Act were in contravention with the constitutional section 217.
President Ramaphosa said on Monday that the government of national unity will continue with the prioritisation of racial transformation of business in conjunction with pursuing higher levels of economic growth.
“In South Africa, growth and transformation are two sides of the same coin. We cannot achieve one without the other,” he said.
In addition, this follows the recent indication by the Trade, Industry and Competition Minister Parks Tau, in his recent Budget Vote address, of his intention to use local procurement in order to create early-stage demand in targeted sectors.
“The department will be identifying procurement opportunities, advocating for local-content requirements, monitoring implementation and evaluating impact,” Tau said.
Tau said his department will work with relevant state-owned enterprises and industry to support local manufacturing of key products and job creation in identified industries.
The Chartered Institute for Procurement & Supply (CIPS) General Manager Paul Vos welcomed the provisions of the bill, but said that its success hinges on how well it is executed.
“While the bill is a commendable attempt to overhaul the country’s procurement landscape, its success will depend heavily on the effectiveness of its implementation and the ability of institutions to adapt to new roles and responsibilities,” Vos said.
Vos said it is vital for the country to achieve its economic and social objectives and that careful monitoring, ongoing evaluation, and a willingness to adjust are imperative for the legislation’s effectiveness.
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