While the draft South African Public Procurement Bill is a commendable attempt to overhaul the country’s procurement landscape, its success will depend heavily on the effectiveness of its implementation and the ability of institutions to adapt to new roles and responsibilities.
That is the view of CIPS, the Chartered Institute for Procurement & Supply, the world’s largest professional body serving the procurement and supply profession.
The Bill, touted as the solution to corruption and wasteful expenditure at a governmental level, is expected to be signed into law soon after being assented to by Parliament recently.
CIPS Southern Africa General Manager Paul Vos says the procurement Bill marks a pivotal moment in the country’s efforts to reform procurement processes at all government levels.
“It is vital if South Africa is to truly achieve its economic and social objectives and avoid a scenario where the country’s economic activity continues to shrink,” Vos says.
“If it is to prove effective, it is imperative that there is careful monitoring, ongoing evaluation and willingness to adjust when the need arises.”
One of the more significant changes introduced by the Bill is establishing a centralised Public Procurement Office (PPO) tasked with ensuring compliance, promoting standards and fostering transparency.
While CIPS accepts that centralised oversight may lead to more standardised procurement practices, reducing discrepancies and promoting fairness, it also recognises the risks involved.
“There is a danger of creating bureaucratic bottlenecks, where the PPO could become a choke point, slowing down procurement processes rather than streamlining them,” notes CIPS member Tsholofelo Tsholofelo.
He also cautions that over-centralisation may stifle local agencies’ ability to tailor procurement strategies to specific needs.
He points out that one of the fundamental challenges public procurement teams face today is the overregulation of the procurement landscape, which “not only creates rigidity but also stifles innovation.”
Fellow CIPS member Vilochanee Naidoo says that she remains hopeful that the legislation will also drive the agenda for economic empowerment through organs of state and, more significantly, serve to grow small and medium-sized enterprises, exempted micro-enterprises, beneficial ownership, and black women-owned companies.
“Even as acknowledged in Parliament during this election period, Black Economic Empowerment (B-BBEE) has served to make only a few citizens wealthy, while the rest of the people of this country suffer from hunger and poverty,” she says.
“Where BEE should have economically empowered the vast majority of our people, public sector spending runs into billions of rand, and our people are not empowered.”
Another issue CIPS raised was repealing the Preferential Procurement Act through the Public Procurement Bill. In this regard, the CIPS highlights two key provisions: the Minister is allowed to promote higher deviations on setting aside bids, and accounting officers at procuring institutions will, in the interim, manage the setting aside for preferential procurement.
Naidoo says questions must, therefore, be raised about how the new preferential procurement framework will be rolled out and its intention to align with the BEE Act and B-BBEE Codes of Good Practice.
While these issues must be addressed, CIPS welcomes sections 28-29 of the Bill, which advocates using technology to modernise procurement. This includes developing an ICT-based procurement system to enhance operational efficiency and accessibility.
“This, if similar to the e-tendering system rolled out by Transnet, would be a game-changer,” says Tsholofelo.
“Using digital platforms is a no-brainer way to streamline procurement processes, reduce paperwork, and make opportunities more accessible. Digitisation also has the potential to deliver on the integrity and best practices for all organs of state.”
The expectation is that the availability of the correct data, coupled with smart analytics, will lead to the establishment of global framework agreements for homogenous spending categories across government departments.
CIPS has identified Critical Success Factors (CSFs) that will need to be implemented and executed in the next two years if South Africa is to benefit from the legislation. These include:
The PPO should be established within the National Treasury to perform functions related to the legislation impartially and without fear, favour, or prejudice.
Every procuring institution must establish a procurement function to maintain this Act.
The accounting officer of a procurement institution is responsible for defining procurement needs, implementing an efficient and effective procurement system, and preventing non-compliance by investigating corruption and tampering.
No public officer bearer, including an employee of parliament, municipality, or provincial legislature, may submit a bid.
The minister must prescribe measures for the public, civil society, and media to monitor procurement processes with certain limitations.
Suppliers may be debarred on the database for corruption, fraud, collusion, price fixing, breach of confidentiality, or non-performance.
A person who commits an offence receives a fine, imprisonment not exceeding ten years, or both. In addition, the court may also order that the amount of loss incurred by the complainant must be compensated.
