Public Procurement Act Set to Revolutionize SA's Procurement, Enhance Transparency

President Cyril Ramaphosa assented to the Act in July, which consolidates all existing procurement guidelines and regulations into a single, standardized framework.

The recently signed Public Procurement Act, 2024, is poised to significantly reform South Africa’s procurement landscape, aiming to streamline processes, reduce bureaucratic delays, and curb corruption. Executive Chairman of the Supply Chain Council (SCC), Kamogelo Mampane, praised the legislation, emphasizing its potential to ensure responsible use of taxpayer money and its alignment with constitutional mandates for fair, equitable, and transparent procurement.

President Cyril Ramaphosa assented to the Act in July, which consolidates all existing procurement guidelines and regulations into a single, standardized framework. According to Mampane, this move will introduce more efficient procedures, reducing red tape and making the procurement process more transparent.

The SCC, a non-profit organization established in 2010, supports organizations in improving supply chain processes. Mampane highlighted that the new Act also facilitates economic transformation by creating clear legal standards and offering numerous options for state organs to drive this change.

Key Provisions of the Act

The Act, published as the Public Procurement Act, 2024 (Act No. 28 of 2024) on July 23, 2024, provides a unified legal framework for public procurement across all levels of government. Importantly, the Act is compliant with Section 217 of the Constitution, which mandates a procurement system that is fair, transparent, competitive, and cost-effective.

National Treasury has indicated that while the Act has been approved, its provisions are not yet in force. The President is expected to phase in the Act's implementation, with different dates set for various categories of procuring institutions.

Public Procurement Tribunal

One of the significant features of the Act is the establishment of a Public Procurement Tribunal, designed to provide a cost-effective and accessible platform for resolving procurement disputes. This tribunal, Mampane notes, will particularly benefit small businesses that often lack the resources for prolonged legal battles, allowing their grievances to be addressed more promptly.

The tribunal is expected to handle a large volume of cases initially, especially as small businesses seek to understand the new procurement criteria and processes. Mampane advocates for the tribunal to be chaired by a retired judge, supported by experts in public procurement, contract management, and Broad-Based Black Economic Empowerment (BBBEE).

Driving Economic Transformation

As South Africa marks 30 years of freedom and democracy, the Public Procurement Act is seen as a vital tool for fostering economic transformation. The Act includes provisions that set aside opportunities for historically disadvantaged groups, including women and persons with disabilities. Mampane emphasized that this inclusive approach is critical for leveling the playing field and enabling all businesses to compete fairly.

The SCC has also lauded the Act’s support for local production and manufacturing. The new law requires government entities to prioritize locally produced goods and services, which is expected to boost local industries, create jobs, and stimulate economic growth.

Reducing Bureaucracy and Streamlining Processes

Mampane is optimistic that the Act will reduce government bureaucracy by providing a clear framework for efficient procurement. The introduction of electronic procurement platforms is expected to further streamline processes, reducing paperwork and speeding up the procurement cycle.

However, Mampane expressed concern about the "Stand Still Process" in Chapter 6 of the Act, which prohibits concluding contracts during reconsideration or review proceedings. He warned that this could lead to inefficiencies, as projects could be halted due to potentially frivolous requests for reconsideration.

A Boost for the Supply Chain Sector

The Act is viewed as a significant step forward for the supply chain profession, elevating it to a strategic role in government efforts to achieve social and economic objectives. Mampane urged supply chain professionals to leverage their expertise to drive change, support SMME development, and increase spending on locally produced products, thereby delivering tangible value to their organizations and communities.

The Public Procurement Act, 2024, is seen as a comprehensive tool that not only aims to reform procurement practices but also to contribute to broader economic and social transformation in South Africa.