IN THE SPOTLIGHT: THE PUBLIC PROCUREMENT BILL

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IN THE SPOTLIGHT: THE PUBLIC PROCUREMENT BILL

• 26 July 2023
• In the Spotlight
• SA Legal Academy

Towards the end of each month, SA Legal Academy Policy Watch will publish a more-detailed-than-usual report on a recent development in national government or Parliament of special significance.

This month, the Public Procurement Bill comes under the spotlight.

Tabled on 30 June 2023, once operationalised the Bill will repeal and replace the Preferential Procurement Policy Framework Act, 2000, which introduced a point system intended to facilitate the allocation of contracts to – and the protection or advancement of – ‘persons disadvantaged by unfair discrimination’.

This gave practical effect to sub-section 217(2) of the Constitution, which requires organs of state contracting for goods or services to do so ‘in accordance with a system … (that) is fair, equitable, transparent, competitive and cost-effective’.

The Public Procurement Bill is underpinned by the same constitutional imperative and dedicates an entire chapter to preferential procurement policy.

Aligned to sub-section 10(1)(b) of the Broad-Based Black Economic Empowerment (B-BBEE) Act, 2003, as amended, the policy requires a procuring institution to allocate contracts:

• only to suppliers meeting specific demographic criteria (including citizenship and locality)
• according to ‘categories of preference’ and at least one point system with thresholds
• to suppliers producing goods or providing services locally, and
• with the aim of advancing transformation, beneficiation, industrialisation, innovation, job creation, ‘labour absorption’ and economic development.

Sub-section 10(1)(b) of the B-BBEE Act was inserted by the B-BBEE Amendment Act, 2013, and requires ‘every organ of state and public entity to apply any relevant code of good practice issued in terms of … (the) Act when developing and implementing a preferential procurement policy’.

The Public Procurement Bill nevertheless makes provision for the Minister of Finance to exempt procurement institutions from certain requirements in specific circumstances.

Among other things, this Bill also provides for:

• the establishment and functions of a public procurement office
• the development of a ‘prescribed code of conduct’ for anyone involved in public procurement, including bidders and suppliers
• the prohibition of certain practices
• the debarment of a supplier or bidder in certain circumstances
• a review process
• the development of a dispute resolution mechanism, and
• the establishment of a tribunal, as well as related governance and administrative matters.

Against that backdrop, the Bill empowers the Minister to:

• prescribe a procurement system and different ‘types of procurement methods’
• prescribe a bid committee system for procuring institutions, as well as the functions of each committee
• appoint suitably qualified persons to the tribunal
• make certain decisions in their regard, and
• make all regulations necessary for effectively implementing the Bill once enacted.

Meanwhile, revised preferential procurement regulations giving effect to a February 2022 Constitutional Court judgment are expected to remain in force. They were operationalised on 16 January 2023.

Once passed by Parliament, signed into law and commenced, together with the Employment Equity Amendment Act, 2022, the Bill will inform the process of determining the eligibility of any enterprise bidding for a state contract.

The Employment Equity Amendment Act will come into effect once regulations released in draft form in May 2023 for comment have been finalised and gazetted.

Please click the links below for more information:

• Public Procurement Bill
• constitutional imperative (scroll down to section 217)
• B-BBEE Amendment Act
• Employment Equity Amendment Act draft regulations
• revised preferential procurement regulations
• February 2022 Constitutional Court judgment
• SA Legal Academy 3 July 2023 report on newly tabled Public Procurement Bill
• SA Legal Academy 13 May 2023 report on draft regulations intended to operationalise the Employment Equity Amendment Act

Published by SA Legal Academy Policy Watch

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