INFRASTRUCTURE FUNDING & IMPLEMENTATION
Is public procurement reform on its way? The draft Public Procurement Bill published in February 2020 aims to regulate and prescribe a single regulatory framework for procurement as envisioned in section 217(3) of the Constitution of the Republic of South Africa. By Jason Smit, Muhammed Somrey & Aliyah Ince of Pinsent Masons Africa
Aliyah Ince, candidate attorney
Muhammed Somrey, senior associate
ccording to National Treasury, one of the main objectives of the draft Bill is to remove the current fragmentation of public procurement regulations. This means that the draft Bill would have to address a large range of issues evident in the current regulatory framework by, among other things, identifying concerns around procurement and proposing practical solutions and mechanisms to address them. The draft Bill has received criticism from various quarters for arguably failing to do this.
procurement-related legislation in their entirety, or amendments to legislation in part. Examples of legislation proposed to be repealed in their entirety include the Preferential Procurement Policy Framework Act (No. 5 of 2000; PPPFA), the Local Government: Municipal Finance Management Act (No. 56 of 2003), and the State Tender Board Act (No. 86 of 1968). Legislation to be amended in part include, among others, the Public Finance Management Act (No. 1 of 1999), the National Water Act (No. 36 of 1998), and the Broad-based Black Economic Empowerment Act (No. 53 of 2003). It is clear from the proposed repeals and amendments that the draft Bill would have wide-ranging impacts across various sectors. The infrastructure sector in particular would be vastly impacted for reasons mentioned below. The repeal of the PPPFA, tied with the repeal of the Preferential Procurement Regulations of 2017 (‘2017 Regulations’) promulgated under the PPPFA, has the effect of rendering the preferential point system currently in effect non-existent. Rather, the draft Bill
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Improvement of the current regulatory regimes The Constitution envisions procurement processes undertaken by organs of state that are fair, equitable, transparent, competitive and cost-effective. In addition, section 217(3) requires the implementation of national legislation to prescribe a framework within which these processes must be implemented. Proposed with the implementation of the draft Bill is the repeal of various current
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IMIESA January 2022
Jason Smit, partner
seeks to promote a ‘flexible preferential procurement regime’ and enable the Minister of Finance to prescribe a framework for categories of preferences and the protection or advancement of persons or categories of persons previously disadvantaged by unfair discrimination in procurement, and after consultation with responsible Ministers (see Chapter 4). It should be noted that the 2017 Regulations have in any event been rendered invalid by the Supreme Court of Appeal, with judgment by the Constitutional Court still pending. With one of the main objectives of the draft Bill being to do away with the current ‘fragmentation’ of public procurement regulation, according to National Treasury, it is intended to propose a single framework applicable to national, provincial and local government, and state-owned entities. The draft Bill also aims to promote procurement that is “developmental; ensures value for money in the use of public funds; expands the productive base of the economy; supports innovation, efficiency and maximum
