The Minister of Finance, Enoch Godongwana, has announced that he will chart a new path forward for procurement legislation following the Constitutional Court's ruling that the Public Procurement Act of 2024 is invalid.
The landmark judgment, handed down on Thursday in a case brought by the Premier of the Western Cape and the City of Cape Town as applicants, determined that the Act was enacted in a manner that violated the nation's constitutional imperatives.
The 2024 Act had been signed into law but was not yet in full operation, therefore the court's ruling does not affect current government procurement methods.
According to the court papers, the Procurement Act was meant to provide a cohesive framework for the manner in which the State, including the provincial government and its multiple departments, procure goods and services.
The Western Cape government had argued in its papers that the consultative process regarding the passing of the bill was inadequate and therefore the legislation-making process and the Procurement Act were both “irredeemably tainted rendering the Act unconstitutional and invalid”.
It took particular issue with certain amendments to the Act that were not sent out again for public comment. These amendments dealt specifically with preferential procurement from designated groups. It also objected to the centralisation of procurement under a national Public Procurement Office.
The Speaker of the National Assembly contended that the public had been afforded sufficient opportunity to participate and denied that Parliament had failed to uphold its constitutional duties.
However the court ruled that Parliament failed in its constitutional obligations to facilitate a reasonable public participation process.
In a statement, the Minister noted that the ruling does not merely highlight legal inadequacies but underscores critical flaws within the current public procurement framework.
He said a robust public procurement ecosystem is vital for fostering economic growth and development.
“Public procurement must be fair, equitable, transparent, competitive, and cost-effective, ensuring the protection and advancement of disadvantaged groups,” the Minister stated, pointing out that the current challenges in procurement practices continue to thwart these aims.
Numerous reports, media exposés, and ongoing Commissions of Inquiry have shed light on these pervasive issues, questioning the integrity of the procurement process and its ability to stimulate local industries effectively.
The Constitutional Court, in its ruling, expressed caution against interfering with Parliament's proceedings, highlighting the importance of legislative autonomy.
In its judgment, the court refrained from prescribing methods for Parliament to remedy the defects in the Public Procurement Act. Instead, it reaffirmed that should Parliament opt to enact similar legislation, a constitutionally compliant public participation process is imperative.
In light of the ruling, Godongwana said he would collaborate with the Speaker of the National Assembly and the chairperson of the National Council of Provinces to chart a way forward.
“We are committed to advancing the necessary reforms in public procurement legislation, adhering strictly to the guidance provided by the Constitutional Court,” the Minister reiterated. This commitment aims to ensure that South Africa’s procurement systems can meet the demands of both economic growth and social equity.
Reacting to the judgment, the DA said the Western Cape government had won a major Constitutional Court victory, standing up to bad national legislation.
“We reject the idea that transformation requires government to sacrifice value for money or build ever more complicated rules around who may compete for public contracts. A capable municipality or province should not have to ask national government how to buy every bus, build every road or procure every service. National government should set fair constitutional rules, but it should not suffocate functioning governments with a one-size-fits-all system.
“The DA Western Cape Government went to court because it believed this legislation crossed that line and because Parliament had failed to properly consult South Africans after material changes were made to the law.” Ι Additional Reporting Kamini Padayachee
edward.west@nationalmg.co.za