State-owned defence and security acquisition and project management company Armscor currently has nine tenders out in the wake of South African President Cyril Ramaphosa signing the Public Procurement Act (PPA) into law late in July.
As with other government agencies, authorities and departments, Armscor has to comply with the new legislation aimed at eliminating so-called “tenderpreneurs” and clamping down on corruption and fraud. But there’s a silver lining of sorts for them – all provisions in the Act are not yet in force.
This means unscrupulous tenderers wanting to put bids in on defence related equipment ranging from berets for the SA Army and to what is labelled “life inflatable support” and “survival aid support” for the SA Air Force (SAAF) as well as “cushion-soled” socks for the SA Military Health Service (SAMHS) still have to comply with the onerous needs set out in Armscor tender documentation. Among others, these include broad-based black economic empowerment (BBBEE), financial status as well as diagrammatic representations of the items sought – along with measurements – and materials, where applicable. In one instance – for the acquisition of 1 194 dixie sets, 2 000 cutlery kits (knife, fork and spoon) and a similar number of plastic two litre water bottles for the landward force – the tender document and its requirements ran to 140 A4 pages.
This publication has previously been supplied with tender details on request to spread the net of potential suppliers wider. However, a single sentence response from Armscor Supply Chain Management (SCM) effectively put paid to this type of reporting. It stated: “Please note that Armscor bids documents are only shared with prospective suppliers and not with media houses, therefore it will not be forwarded to you”.
A National Treasury advisory dated 13 August has it Public Procurement Act 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 set for implementation.
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 the PPA accompanying regulations take effect, Finance Minister Enoch Godongwana’s National Treasury has it.
The PPA legislation 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.
As enacted by the President, the Public Procurement Act is aimed at addressing 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 new legislation bolsters the October 2022 government response to the Zondo commission’s extensive recommendations. The commission, chaired by Chief Justice Raymond Zondo from 2018 to 2022, found that interference from members of the Executive in government’s procurement function was one of the ways that allowed state capture to thrive.
Law expert Prof Geo Quinot told Corruption Watch that, “I think the promulgation of the Public Procurement Act is itself a momentous occasion in South African procurement law despite the fact that there are still a number of outstanding questions that must be resolved, and a lot of work still to be done before the act can be fully implemented, not the least of which is the creation of extensive regulations to give content to the system.”
A priority must be the drafting of regulations, said Quinot, which will help to arrive at more specific operational details such as permissible procurement methods or thresholds. “Those are important practical aspects that I hope we will get some sight of very soon, because for many procuring institutions, the changes that those detailed operational rules will bring about are going to be very important in terms of their own planning, operational systems, and standard operating procedures.”
There are other issues that must be clarified with urgency, he said, such as the constitutionality of the PPA, which is also the subject of a Western Cape challenge.
Western Cape premier Alan Winde last month said the Public Procurement Act is unconstitutional, and urged that consultations take place to address his concerns, particularly the preferential procurement provisions such as set-asides for the historically disadvantaged, mandatory subcontracting and local procurement in designated sectors if feasible.
“We firmly believe that the act in its current form does not pass constitutional muster as it usurps the autonomy of provinces and municipalities in adopting their own preferential procurement policies,” Winde said in a statement.
“The act will impose significant costs on the procurement process as well add to the administrative burden involved in procurement — it will be a handbrake on all systems and processes. This in turn will affect service delivery at a time when we as the provincial government are doing everything, we can to improve services for our residents,” Winde said.
