The Public Procurement Bill, 2023

Public Sector and Regulatory

The Public Procurement Bill was introduced in the National Assembly on 30 June 2023 by Finance Minister, Mr Enoch Godongwana, and is currently being discussed by the portfolio committee on Finance.  

The Bill aims to create a single framework to regulate public procurement and to prescribe a framework within which preferential procurement must be implemented in South Africa and to also address the abuse and corruption that has accompanied the current fragmented procurement regulatory framework.

The genesis of the Bill is section 217 of the Constitution of the Republic of South Africa, 1996. This section provides that when an organ of state in the national, provincial, or local spheres of government, or any other institution identified in national legislation, contracts for goods or services, it must do so in accordance with a system which is fair, equitable, transparent, competitive, and cost-effective. These five principles are constitutional standards against which all government is measured. 

The Bill was introduced after several concerns were raised that the current public procurement regulation in South Africa is fragmented in national legislation, regulations, instruction notes, practice notes, policies, and circulars. It is without a doubt that such a regulatory framework creates a compliance and enforcement nightmare

To address these concerns, section 2 of the Bill provides that the objects are to introduce uniform treasury norms and standards for all procuring institutions as envisaged in section 217 (1) of the Constitution and to introduce a preferential policy framework as envisaged in section 217(2) and (3). Although the Bill’s objective is to get rid of the fragmented rules and to introduce a regulatory framework within the Bill, the Bill dismally fails to achieve this. Instead, the Bill still relegates the function to create the framework to the Minister in Chapter 5. Furthermore, the Bill still retains the use of instruction notes and guidelines (i.e., the PPO is empowered to issue instructions in terms of section 5(2)(a)) This is a missed opportunity to unify the regulatory framework. The end result of this is that there still will be a fragmentation of rules within the Regulation of Public Procurement, thereby defeating the objectives of the Bill. 

Some of the key highlights of the bill are the establishment of the Public Procurement Office within the National Treasury, to promote and implement necessary measures to maintain the integrity of procurement, promote standardization in procurement and monitor and oversee implementation of the eventual Act. 

The Bill also introduces a dispute resolution mechanism, in terms of which a bidder can seek a reconsideration of a decision to award a bid. Furthermore, the Bill establishes a Public Procurement Tribunal to review reconsideration decisions taken by a procuring institution. Interestingly, within the dispute resolution mechanism contemplated by the Bill, the Bill introduces standstill provisions, in terms of which the implementation of a decision which is subject to review or reconsideration, is placed on hold. 

Another interesting part of the Bill is the introduction of the use of technology in procurement. The Public Procurement Office is mandated with developing an information and communication technology-based procurement system for all procurement to enhance efficiencies, effectiveness, transparency, and integrity and to combat corruption.

In the next series of this article, we unpack the provisions of the Bill, the strengths, and shortcomings of the Bill. 

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