Public procurement and its benefits to the South African economy was highlighted by the Building Industry Bargaining Council (BIBC) and its impact on investment and infrastructure.
BIBC said that public procurement accounts for an estimated 12% of South Africa's GDP (National Research Foundation), highlighting its influence on economic growth, employment and industry standards.
“With the Department of Public Works and Infrastructure allocated R7.8 billion in 2026/27 and R24.6bn over the medium term (SA Government News), it will continue to play a major role in shaping infrastructure delivery, skills development and competitiveness in the building industry.”
BIBC added that beyond delivering infrastructure, public procurement drives economic growth, supports jobs and strengthens industries.
Danie Hattingh spokesperson for business at the BIBC said that public procurement is more than a purchasing process. “When structured effectively, it supports quality infrastructure, fair competition, decent work and sustainable industry growth.”
BIBC said that procurement frameworks deliver the greatest value when they balance cost, quality and compliance. “While affordability remains important, an overemphasis on the lowest bid can compromise workmanship, delay projects and increase long-term costs.”
Hattingh said that greater emphasis should be placed on performance, compliance and accountability.
Responsible contractors that invest in their workforce, comply with labour laws and consistently deliver quality projects should be rewarded. Competition should be based on quality, skills and compliance, not cutting costs at the expense of industry standards.”
BIBC added that they believe procurement frameworks should promote quality, compliance and long-term value through recognised safety and construction standards.
“It also stresses the importance of prompt payment and greater use of local suppliers, subcontractors, and materials to support jobs and economic growth. The discussion is particularly relevant to initiatives such as the Expanded Public Works Programme (EPWP).”
BIBC said that while it plays an important role in the creation of job opportunities and service delivery, the BIBC also believes that these programmes offer valuable lessons for future procurement frameworks, with opportunities to strengthen alignment with industry standards, skills development and fair competition.
Hattingh added that when aligned, they support both infrastructure delivery and decent work. “One of the key lessons has been the importance of collaboration across all spheres of government. The best outcomes are achieved when government, industry and labour work together. Continued collaboration and knowledge-sharing across government and industry are essential to achieving consistent outcomes. There is also an opportunity to strengthen awareness of the role bargaining councils play in promoting labour stability, compliance and fair competition, particularly within procurement and policy implementation processes.”
Hattingh said that continued collaboration and knowledge-sharing across government and industry are essential to achieving consistent outcomes.
“There is also an opportunity to strengthen awareness of the role bargaining councils play in promoting labour stability, compliance and fair competition, particularly within procurement and policy implementation processes. Negotiated agreements protect both workers and responsible employers.”
BIBC added that consistent standards also encourage investment in skills, safety and workforce stability, strengthening productivity and project delivery.
“The benefits extend far beyond individual construction sites. Fair wages and negotiated benefits improve workers' financial security and economic participation, while formal employment supports tax compliance and broader economic stability. For employers, consistent standards promote fair competition and reward innovation, performance and quality. For government and society, well-managed procurement delivers better infrastructure, stronger economic participation and greater value from public investment.”
Professor Waldo Krugell, an economist at North-West University, said that there is much to agree with here, but he was also a little cautious.
Investment is the key to economic growth and it is public money that funds infrastructure and big civil work.
“I agree with the goals of decent work, sustainability and quality infrastructure. But from a competitiveness perspective, the key issue is entry. A procurement system that rewards compliance, certifications and negotiated structures may sound fair, but if those requirements are costly or relationship-driven, they can entrench large incumbents and exclude smaller firms.”
Krugell added that the question is not whether the objectives are attractive; it is whether the mechanism expands competition or narrows it.
yogashen.pillay@nationalmg.co.za
THE NATIONAL