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President Cyril Ramaphosa has signed into law legislation that aims to create a single framework that regulates public procurement, including preferential procurement, by all organs of state, with the necessary efficiency, cost-effectiveness and integrity.

The President has assented to the Public Procurement Bill which complies with the stipulation in Section 217 of the Constitution that contracting of goods and services by organs of state in all spheres of government must occur in accordance with a system which is fair, equitable, transparent, competitive and cost-effective; and that national legislation must prescribe a framework within which a procurement policy must be implemented.

As enacted by the President, the Public Procurement Act addresses weaknesses in the procurement of goods and services by organs of state that have in the past enabled various degrees of corruption, including state capture.

The Act also responds to the acknowledgment that legislation regulating procurement by organs of state is fragmented and constrains justified advancement of persons or categories of persons who could provide goods or services.

The Act establishes a single framework that regulates public procurement, including preferential procurement, by all organs of state and promotes the use of technology for efficiency and effectiveness.

The law seeks to enhance transparency and integrity, among others, to combat corruption, ensure efficient, effective and economic use of public resources and advance transformation and broadened economic participation.

The Act foresees that economic development will be stimulated through the procurement of goods that are produced and services that are provided in South Africa, as well as procurement that is developmental in nature.

The Public Procurement Act, which will be administered by the Minister of Finance, applies to departments, constitutional institutions, municipalities, municipal entities, and public entities.

There are also a limited number of clauses which apply to Parliament and provincial legislatures.

The Act applies to all procurement carried out by a procurement institution (including procurement through donor or grant funding), any person who submits a bid or has been awarded a bid; and all procurement carried out by any person on behalf of a procuring institution.

Among its wide-ranging provisions, the Act lists persons who may not submit bids including a public office bearer, employees of Parliament or provincial legislatures, and officials or employees of, among others, public entities, constitutional institutions, municipalities and municipal entities.

Issued by the Presidency