top of page

THE

BEECHAMBER

Asset 4.png

NEWS

BEE NEWS

EFFECTIVE IMPLEMENTATION CRUCIAL TO THE SUCCESS OF PUBLIC PROCUREMENT LEGISLATION

Paul Vos | 17 July 2024

The Chartered Institute for Procurement & Supply (CIPS) supports the South African Public Procurement Bill, highlighting that its success will largely depend on effective implementation. While the Bill aims to reform the country's procurement practices and combat corruption and wasteful spending, its effectiveness will rely on institutions' ability to adapt to new roles and responsibilities. The Bill is seen as a crucial step in achieving South Africa's economic and social goals, necessitating careful monitoring and evaluation for successful outcomes.

Despite political uncertainty, effective implementation is vital to the success of public procurement legislation in South Africa.


The Chartered Institute for Procurement & Supply (CIPS) welcomes the provisions of the Public Procurement Bill, but emphasises that its success hinges on how well it is executed.


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.


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.


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. Careful monitoring, ongoing evaluation, and a willingness to adjust are imperative for its effectiveness.


One of the more significant changes introduced by the Bill is the establishment of a centralised Public Procurement Office (PPO), tasked with ensuring compliance, promoting standards, and fostering transparency.


Centralised oversight may lead to more standardised procurement practices, reducing discrepancies and promoting fairness, but it also carries risks.


There is a danger of creating bureaucratic bottlenecks, where the PPO could become a choke point, slowing down procurement processes rather than streamlining them. Over-centralisation may stifle local agencies’ ability to tailor procurement strategies to specific needs.


One fundamental challenge public procurement teams face today is the overregulation of the procurement landscape, which not only creates rigidity but also stifles innovation.


There is hope that the legislation will drive economic empowerment through state organs 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 the 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. 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 is the repealing of the Preferential Procurement Act through the Public Procurement Bill. Questions must 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.


Despite these concerns, CIPS welcomes sections 28-29 of the Bill, which advocate using technology to modernise procurement. This includes developing an ICT-based procurement system to enhance operational efficiency and accessibility.


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 need to be implemented in the next two years for South Africa to benefit from the legislation:

  • 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 office 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.


‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’.


bottom of page