Fight grows against controversial Public Procurement Act

AmaBhungane has applied to challenge the passing of the controversial Public Procurement Act, as it deems the procedure followed by Parliament unconstitutional.

The Centre for Investigative Journalism, supported by the Legal Resources Centre, will join Western Cape Premier Alan Winde and the City of Cape Town in refuting the Act passed in 2024.

It argues that Parliament “violated its constitutional obligations” by failing to ensure meaningful public participation in the formulation of the Bill, which, given the process followed, should never have been passed.

“This case is a narrow challenge, focusing on the procedure through which Parliament passed the Act and its failure to meaningfully facilitate public participation,” AmaBhungane said.

“As it concerns only whether Parliament acted constitutionally, it is a matter that can only be heard by the Constitutional Court.”

AmamBhungane describes the challenge as an “existential fight.”

The Public Procurement Act aims to regulate the country’s public procurement and create a framework for preferential procurement. 

It was first introduced to Parliament by the Minister of Finance in June 2023 and assented to by President Cyril Ramaphosa in July 2024; however, it has yet to be brought into operation.”

At the time, Ramaphosa said that the Act eliminates the problem of fragmentation in procurement laws by “creating a cohesive regulatory framework.”

According to PMG, the National Assembly (NA) public hearings took place on 12 and 13 September 2023, and those in the National Council of Provinces (NCOP) on 23 February 2024.

The first day of the NA public hearings heard submissions from 13 organisations, and “a wide range of community organisations” on the second day.

The NCOP also heard submissions from 13 organisations during its round of public hearings.

In addition to disagreeing with Parliament’s process for passing the Act, AmaBhungane also says that the Act’s contents is “flawed and unconstitutional.”

It argues that its reporting has been tracking the piece of legislation since 2020, voicing its deepest concerns that the system created by the Act does not allow for the necessary safeguards against corruption.

“We fumed when Parliament rushed through the Bill before last year’s elections, furious at the laughably short timeframes the MPs had to consider the draft Bill and the public submissions,” it said.

“We formally wrote to the President and asked him to consider sending the Bill back to the National Assembly to address what we (and our colleagues in the Procurement Reform Working Group) described as patently unconstitutional provisions.”

“We were ignored.”

“We still believe the content of the Act is flawed and unconstitutional – particularly in how it fails to create constitutionally compliant transparency and accountability systems,” added AmaBhungane.

Western Cape hits back at the Act

Roughly a month before Ramaphosa assented to the new legislation, Western Cape Premier Alan Winde and the province’s MEC of Finance Deidre Baartman raised concerns to the president over the constitutionality of the Bill.

Winde took particular issue with the Act’s removal of provinces’ and municipalities’ autonomy to adopt their own preferential procurement policies.

In their letter, they argued that the Act would be “a handbrake on all systems and processes,” ultimately impacting service delivery given the costs and administrative burden it will place on the procurement process in South Africa.

“The Constitution envisages that organs of state have the discretion to decide whether to adopt a preferential procurement policy – this Act is the national government drafting policy, and usurping the autonomy of organs of state, instead of providing a framework,” said Baartman.

Similar to Amabhungane’s argument, Winde and Baartman said that the procedure used to draft the Bill was “woefully inadequate” and failed to consider all public input.

The two argued that the public comment periods provided by the NA and NCOP were too short and “ignored” some public feedback. They also said that Parliament failed to evaluate the Bill’s financial impact adequately.

Business lobby group Sakeliga also criticised the Bill, calling it a “recipe for accelerated state failure.”

It added that the legislation “seeks to compel all state entities to pay exorbitant premiums for procurement, based on a tendering party’s race, nationality, and other criteria, instead of prioritising value for money for the public.”