South African Procurement Law – A Continued State of Flux

South African Procurement Law – A Continued State of Flux

By Peter Barnard, partner and Claudelle Pretorius, partner, Cox Yeats

In 2020, the 2017 Regulations issued under and in terms of the Preferential Procurement Policy Framework Act 5 of 2000 (the PPPFA) were set aside by the Supreme Court of Appeal.  That decision was taken in on appeal to the Constitutional Court by the Minister of Finance. On 16 February 2022, the Constitutional Court dismissed the appeal.

On 4 November 2022, new Regulations came into effect. The 2022 Regulations were to act as a stopgap until such time as the new Public Procurement Act 28 of 2024 (the PPA) came into effect.

That PPA has just been declared unconstitutional by the Constitutional Court in the case of Premier of the Western Cape Government and Another v Speaker of the National Assembly and Others.

In the above case, nine judges unanimously ruled that Parliament had failed to comply with its constitutional obligation to facilitate public involvement as required in the Constitution of the Republic of South Africa 108 of 1996 (the Constitution) before passing the PPA.

It was declared that the PPA was adopted in a manner inconsistent with the Constitution and was therefore constitutionally invalid.

This will have severe ramifications for all service providers who rely on State projects, secured through the public procurement process, to sustain their businesses.

The ongoing state of flux surrounding the future of public procurement in South Africa will continue for longer. Until such time as a new process is adopted, it seems that the 2022 Regulations issued in terms of the PPPFA will have to remain in place.

In terms of the 2022 Regulations, and unlike the preceding 2017 Regulations, no provision for any discretionary prequalifying criteria is made.

The Regulations simply record that the tender document must stipulate the preference point system applicable to the tender and any specific goals as envisaged in terms of the PPPFA.