Government has no intention of scrapping black financial empowerment (BEE) or localisation standards in its public procurement coverage, and has dismissed latest media studies indicating in any other case.
Finance Minister Enoch Godongwana acknowledged emphatically on Tuesday that authorities shouldn’t be deviating from its transformational and reconstruction and improvement frameworks.
All that has occurred is the publication of the brand new Preferential Procurement Regulations of 2022.
This was in keeping with a Constitutional Court judgment earlier this 12 months that discovered the minister lacked the facility to make rules that created a desire mechanism for the complete authorities procurement system.
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Power lies with organs of state
The courtroom held that by way of the Preferential Procurement Policy Framework Act the facility to create a desire system vested in every organ of state, not within the minister. This pronouncement held that the content material of the desire system is invalid. Each organ of state should create their very own procurement framework relying on their service supply necessities.
The new rules gazetted on 4 November will stay in place till the brand new Public Procurement Bill, which is able to go to parliament subsequent 12 months, is enacted to give the minister the facility to set the procurement framework.
The saga began in 2018 when Sakeliga (previously Afribusiness) introduced an software earlier than the excessive courtroom to have the 2017 rules declared invalid and put aside, on the premise that the minister had acted outdoors his mandate.
The software was dismissed and went to the Supreme Court of Appeal (which present in favour of Sakeliga) and ultimately the Constitutional Court. National Treasury has since drafted new rules which have now been gazetted.
During a media briefing to make clear authorities’s procurement coverage, Ismail Momoniat, appearing director-general of National Treasury, stated procurement is extremely contested as “everyone” needs to take authorities to courtroom.
He says there’s a hazard of “drowning in legalise” the place procurement is worried, because the framework is about out by way of the Public Finance Management Act, or the Municipal Finance Management Act, or the Preferential Procurement Act.
However, authorities has by no manner modified the coverage framework by way of BEE or its aims by way of the Reconstruction and Development Programme.
“The regulations are published in terms of the court order, as the 2017 regulations fall away in January next year.”
Purpose of recent rules
Treasury says in a press release the primary objective of the 2022 rules is to adjust to the Constitution on the procurement of products and companies by organs of state; to adjust to the Preferential Procurement Policy Framework Act of 2000; and to adjust to the Constitutional Court judgment of February 2022 on the 2017 rules.
According to Treasury, the 2022 rules are a “placeholder” whereas it finalises the invoice.
Until then an organ of state should stipulate in its tender paperwork the relevant desire level system as envisaged within the rules.
Godongwana says this “may include contracting with persons, or categories of persons, historically disadvantaged by unfair discrimination on the basis of race, gender and disability” together with the implementation of programmes of the Reconstruction and Development Programme.
Currently state departments, municipalities and state-owned enterprises are making use of the 2017 rules till the 2022 rules take impact on 16 January 2023.
