Public procurement in South Africa, according to Finance Minister Enoch Godongwana, will account for 19% – R1.5 trillion – of government spend over the next three years – all of which will eventually fall under the ambit of the Public Procurement Act (PPA).
The Act was signed into law by President Cyril Ramaphosa late in July following the May national and provincial elections. There’s still a way to go before implementation, Godongwana warned when presenting his medium term budget policy statement (MTBPS) in the Nieuwmeester marquee opposite the fire damaged Parliament building in Cape Town yesterday (Wednesday, 30 October).
The minister gave no indication of where the spend will be, but it can be safely assumed defence and security features, not necessarily high on the list but accounting for a sizeable amount via the three national security organisations requiring increasingly sophisticated equipment to ensure South Africans are and feel safe as per the Constitution. The agencies are the SA National Defence Force (SANDF), SA Police Service (SAPS) and the one-year-old Border Management Authority (BMA).
All three use defence and security acquisition and project management company Armscor for procurement. As examples the Pretoria east headquartered State-owned company (SOC) is currently running tenders for bow tents – end user not specified; submarine spares for the SA Navy (SAN); “fast ferries” – again end user not specified; “reaction/boarding boat systems” for the BMA and “transforming” an Armscor dockyard workshop into a canteen.
Existing procurement legislation including the Municipal Finance Management Act (MFMA) and the PPPFA (Preferential Procurement Policy Framework Act) remain in place until the relevant provisions of PPA regulations take effect. These regulations, according to Godongwana, will be published next year and have to pass Parliamentary scrutiny ahead of implementation. He gave no possible implementation date with an August National Treasury (NT) advisory stating PPA provisions will become operational on different dates using a phased approach. This will see different categories of “procuring institutions such as national and provincial departments, national and provincial public entities and municipalities and municipal entities” having own dates for PPS regulations implementation.
At its core the PPA 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.
