It is no secret that public procurement is the weakest of the weak links in public administration and governance in South Africa. The abuse of the public procurement system, including large-scale corruption, has been documented in detail in recent years through processes such as the Zondo Commission and the SIU report on PPE procurement. The procurement system is also not efficient, which is materially undermining developmental efforts. This is, for example, clearly set out in a major report prepared for the National Planning Commission in 2020 on public infrastructure delivery. The report, authored by Drs Ron Watermeyer and Sean Phillips, noted that the “major contributor to disappointing infrastructure project outcomes lies in inappropriate procurement practices”. All of this plays out against the massive amount of public funds annually expended via public procurement. In its 2018 state of procurement spend, National Treasury reported that across all levels of government and public entities procurement spend amounted to R938 billion in the 2016/7 financial year.
Despite these weaknesses in public procurement being known for an extended period, very little progress has been made in addressing the root causes. One of the underlying reasons for public procurement failure in South Africa is the broken regulatory regime governing public procurement. The Zondo Commission, for example, noted in its report:
“The selected examples, and the evidence overall, show how poorly the procurement system has been working in practice. The picture is one of a procurement system which is vulnerable to extensive patterns of abuse. The design of this procurement system is set out in the national legislation. Manifestly the framework design was intended to be strong enough to withstand the very abuses to which it has fallen prey. A closer look at the legislative design is therefore unavoidable to see why and how the theory of procurement has so diverged from the practice of procurement.”Judicial Commission of Enquiry into State Capture Report: Part 1 Vol. 1 (2022) p 772
The Commission furthermore stated that
“any serious attempt to address the problems which beset public procurement must go well beyond state capture. It must assess the adequacy of the procurement framework which is set out in the national legislation, to see whether that framework is compatible with the realities on the ground or whether there are fundamental design deficiencies … the process of reform requires a coherent and comprehensive plan of action which needs to bring the public and private sectors together in a joint initiative to restore proper standards and discipline within the procurement system.”Judicial Commission of Enquiry into State Capture Report: Part 1 Vol. 1 (2022) p 772
The African Procurement Law Unit (APLU) intends to contribute to the development of a coherent and comprehensive procurement reform action plan by facilitating a national conversation on the public procurement system we want and need in South Africa. We believe that the reform of the regulatory regime governing public procurement is a necessary starting point for such comprehensive reforms of the procurement system. That is, reform of the regulatory regime must create the basis for implementing a reformed procurement system.
The project involves a range of workshops to which all stakeholders in public procurement in South Africa are invited. This includes all government departments, all provincial governments, local government, state-owned companies and other public entities, private sector organisations like business forums and employer and labour organisations, NGOs and other civil society organisations, and academics. During plenary sessions and smaller break-away group discussions at workshops and at workstream engagements between workshops, we hope to generate a vision for public procurement in South Africa and start to capture that vision in implementation tools.
The main outcome of the project is to formulate an ideal procurement law for South Africa from the ground up. It is envisaged that this product can play a leading role in subsequent formal public consultations on a new procurement law regime.
Rather than the haphazard public inputs on distinct aspects of a bill that typically characterise public consultation processes by legislatures, this approach will present the legislature with a consolidated, coordinated input from a broad range of stakeholders. The trade-offs that will inevitably be required to arrive at an optimal procurement law regime in South Africa can in this way be done in a participatory manner. That is, stakeholders can engage each other directly in discussing such trade-offs with appropriate technical assistance from all applicable fields to work through the implications thereof. This is distinct from a typical legislative process where individual inputs are made, mostly in isolation from each other and without engaging with the implications of other inputs, and the trade-offs left to a small group of legislators that do not necessarily have (access to) the requisite technical expertise.
Who can join in
Anyone with an interest in public procurement can join in the project. To participate please email firstname.lastname@example.org.
The first workshop of the project took place on 27 to 28 February 2023 in Gauteng. Click here for more details on the workshop.
Five workstreams have been established following the first workshop. Click here for information on the workstreams.
The second workshop took place on 21 July 2023 at the Birchwood Hotel and OR Tambo Conference Centre in Johannesburg. Click here for more information on the second workshop.
The programme for the second workshop can be found here.
Submissions to Parliament on the Public Procurement Bill 2023
APLU submitted two sets of comments on the Public Procurement Bill 2023 to the Standing Committee on Finance of the Parliament of the Republic of South Africa, drawing on the discussions in this project. The one submission is a direct output of the work done during 2023 in the project and reflect critical issues to consider in framing a future public procurement regime in South Africa.
The second submission is a more detailed comment on specific aspects of the Bill, with several proposed revisions to the Bill. This submission was greatly informed by the work done under the project.
Both submissions can be accessed at this link.
This project is funded by the Millennium Trust.