The Minister of Finance has published the draft Public Procurement Bill for public comment. The draft Bill proposes a single regulatory framework for procurement applicable to national, provincial and local government including state owned entities and will, once it becomes law, eliminate fragmentation in the laws that deal with public sector procurement. Public comments on the Bill will be welcomed until 31 May 2020.
The Bill proposes the repeal of the Preferential Procurement Policy Framework Act of 2000 and thereby do away with its preferential point system. The Bill creates a more flexible preferential procurement regime and enables the Minister of Finance, after consulting responsible Ministers, to prescribe a framework for preferential procurement. To advance economic opportunities for previously disadvantaged people, specific provision is made for women; the youth and people with disabilities; small businesses; locally produced goods including local technology and its commercialisation.
The key areas of regulation in the Bill are:
• general procurement requirements; • an enabling framework for preferential procurement; • establishing a Public Procurement Regulator within the National Treasury and its functions; • determining the functions of Provincial Treasuries; • measures to ensure the integrity of the procurement process including sanctions in the form of debarment and criminal offences; • the power to prescribe different methods of procurement, one of which is procurement from another organ of state, and bidding processes; • a framework for supply chain management; • dispute resolution mechanisms entailing review within an institution and also by the Regulator and the Provincial Treasuries and then an independent Tribunal, to resolve disputes expeditiously and to limit the need to litigate in the courts; and • the repeal and amendment of certain laws.
The modernisation of public procurement necessitates procurement that is developmental in nature; ensures value for money in the use of public funds; aspires to expand the productive base of the economy; supports innovation, investment efficiency and maximum competition; and uses technology to simplify procurement processes and better leverage economies of scale.
Background
The Constitution of the Republic of South Africa stipulates in section 217 that procurement by organs of state in the national, provincial or local sphere of government, or any other institution identified in national legislation, must occur in accordance with a system which is fair, equitable, transparent, competitive and costeffective. The Constitution allows for organs of state to implement a procurement policy providing for categories of preference in the allocation of contracts and the protection or advancement of persons disadvantaged by unfair discrimination within a framework prescribed by national legislation.
The public procurement regime in South Africa is currently fragmented as there are several laws regulating procurement. The National Treasury has, over the past few years, embarked on a process to reform and modernise public procurement. These reforms include:
• strategic sourcing principles to introduce a differentiated procurement approach for different types of commodities and to move away from the one size fits all approach. Strategic procurement introduces alternative sourcing strategies for complex procurement of capital projects, infrastructure, construction and cost containment measures; • the procurement of common goods through transversal contracts to benefit from economies of scale, bulk buying and achieve much needed savings; and • introduction of technology to improve efficiencies through a Central Supplier Database where all suppliers that do business or intend doing business with the State are registered without having to register on each and every government institutions’ databases as was the case previously.
The draft Bill and details about the submission of comment are available at www.treasury.gov.za.
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