South Africa’s public procurement regime, established in the context of public sector reform initiatives of the late 1990s and early 2000s, requires reform. The drafting process for new public procurement legislation has been a long and winding one, and much of it has taken place beyond public scrutiny. In 2022 a revised version of the 2020 Public Procurement Bill was introduced into the National Economic Development and Labour Council (Nedlac). The deliberations in Nedlac were attended, at the request of business and labour, by a small number of individuals and organisations with expertise in public procurement. At the request of Nedlac social partners (business and labour), this group of individuals and organisations were formalised to provide technical expertise on the Bill and styled as a Joint Strategic Resource (JSR), coordinated by the Public Affairs Research Institute (PARI), and including the African Procurement Law Unit (APLU), the Wits School of Construction Economics and Management, and Corruption Watch. This paper explains the strategic procurement paradigm that underpins the JSR Draft of the Bill. We argue that the JSR Bill demonstrates that strategic procurement is appropriate to the South African context for adoption and implementation as the key concept in a comprehensive public procurement statute.
We worked for a statute that would provide for public procurement which is developmental in economic nature and outlook, aspiring to expand the productive base of the economy and to support innovation and investment. This meant that preferential procurement policies (including local content) were part and parcel of the statute. The legal architecture of the National Treasury Public Procurement Bill of 2022 contains little hope of moving away from a repetition of the lack of success of the earlier generations of regulatory instruments in this field. We argue this is not so much the fault of OCPO drafting, but rather of the fundamental choice not to exercise through Parliament the policy making power of the state to adopt, promulgate, and enforce a comprehensive public procurement statute. The Bill should itself contain clear and accessible substantive policy choices in this area and not delegate and allow for such decisions to be taken (or fail to be taken) in the sub-units of National Treasury.
Comments Off on First workshop on a national conversation on procurement reform in South Africa
The African Procurement Law Unit (APLU) initiated a national conversation on public procurement reform in South Africa during a two-day gathering in Johannesburg from 27 to 28 February 2023.
The initiative is a response to the call of the Zondo Commission of Inquiry into State Capture which noted that “any serious attempt to address the problems which beset public procurement must go well beyond state capture … 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.”
The event drew over 120 delegates from the South African public procurement/supply chain management community to discuss all aspects of public procurement with the aim of framing a vision for the future of public procurement in South Africa. Delegates came from all levels of government, including key national departments such as Treasury; Justice and Constitutional Development; Public Works and Infrastructure; Trade, Industry and Competition and Defence as well as from public bodies such as the NRF; Public Service Commission; SARS; Competition Commission and SANRAL. Suppliers to the government as well as supplier organisations such as Consulting Engineers South Africa and the Steel and Engineering Industries Federation of Southern Africa were present. Participating NGOs included Corruption Watch; the Legal Resources Centre; Amabhungane; Open Ownership, OUTA and the Public Service Accountability Monitor as well as some of South Africa’s leading procurement academics and lawyers.
The topics discussed ranged from the forthcoming public procurement legislation for South Africa, how best to deal with the restriction of poor performing and corrupt suppliers to government, the liability of public officials for procurement failures, the need for the state to buy local goods in order to support local industrial development, how to accelerate transformation via public procurement practices, increased use of technology to improve efficiencies in procurement and to reduce abuse and how best to deal with challenges to tender awards.
Prof Geo Quinot, APLU director and professor of law at SU, noted in his opening remarks that “public procurement is the backbone of service delivery in our country, of making real the aspirations of our constitution, of driving economic development. By coming together, all of us can strengthen that backbone to the benefit of everyone who live in our country.” Click here to listen to the full opening remarks.
Smaller workstreams at the workshop
The issues raised during the plenary engagements were categorised under five themes and discussed in more detail by smaller working groups. The themes are institutional arrangements; procurement integrity; targeted procurement; procedures & efficiency; and dispute resolution. The South African public procurement community intends to contribute to the ongoing reforms of the public procurement system and following the two-day workshop, the national conversation continues by way of workstreams where delegates will continue to explore the themes raised in the working groups. For each theme, an issue paper will be collaboratively developed to set out inter alia the nature of the issue, its role in the procurement system, possible ways in which it could be regulated, suggested operating procedures and standard documents, and the skills required to manage the issue. The issue papers will include case studies, from South Africa and beyond, on how the issue has been successfully addressed. These issue papers will be discussed at further gatherings, including another national workshop in June. The outcomes can feed into the public consultation processes that will accompany new procurement legislation, and the crafting of regulations and other implementation instruments under a new procurement statute, once passed. Generally, the initiative aims to assist all stakeholders in improving procurement practice – from the regulators tasked with designing and overseeing the procurement system; to the leadership of organs of state in using procurement as a strategic tool; to procurement officials in their daily acquisition functions; to businesses wanting to supply goods and services to the state.
The South African procurement community believes that by bringing together the experiences of officials awarding tenders, of enterprises selling to the state, of regulators monitoring the spending of public money, of NGOs focusing on the impact of procurement on civil society and of academics researching and training on all aspects of public procurement, the South African society can collaboratively construct a fit-for-purpose procurement system that can deliver best value for money.
Listen to the closing remarks by Prof Quinot at the end of the first workshop at this link.
UNCITRAL Days are a series of events co-organised with institutions of higher learning to raise awareness of the work of UNCITRAL amongst the next generations of legal thinkers and policymakers, thereby furthering its efforts to promote the progressive harmonization and modernization of international trade and commercial law.
The theme of the 2022 UNCITRAL Days in Africa was “Modernization and harmonization of international commercial law framework in the AfCFTA context”.
On 3 November 2022 from 9:00 – 12:30 (UTC+2), the African Procurement Law Unit at Stellenbosch University co-hosted with UNCITRAL an UNCITRAL Africa Day workshop focusing on the public procurement dimension of trade law harmonization in the AfCFTA context.
For more details, including recordings of the presentations, click on the following link.
Despite vast progress in the field of women’s rights, women still experience extreme discrimination in the form of gender pay gaps in workplaces, gender-based violence and harassment and time poverty due to unpaid domestic work. Women in rural areas travel long distances to access fuel and water, they suffer from air pollution caused by heating for the purpose of cooking and cleaning and are in danger based on a lack of lighting at public transport areas and outside public bathrooms. The latter indicates that infrastructure in South Africa does not adequately provide for the needs for women.
Public infrastructure is acquired by way of public procurement, which constitutes approximately 22% of a country’s Gross Domestic Product (GDP). With infrastructure being the bedrock of any country, the procurement of infrastructure holds tremendous economic significance. For the last two to three decades, procurement has been leveraged to advance many social objectives, including the advancement of women-owned businesses. However, this topic in particular has seen slow development the world over.
This seminar will be based on an upcoming collaborative paper between the academy and practice in the form of UNISA, George Washington University International and Comparative Law Studies and International Budget Partnership South Africa where solutions to advancing women’s rights in infrastructure procurement will be considered. Sanitation access in South Africa’s informal settlements will be explored as a case for gender-inclusive procurement.
On 7 April 2022, APLU, in collaboration with Crown Agents and the Open Contracting Partnership, hoste an open online workshop to discuss one of the recommendations on public procurement reform in South Africa, put forward by the Judicial Commission of Inquiry into State Capture (the Zondo Commission), viz. the creation of a Public Procurement Anti-Corruption Agency.
In brief, the Commission recommended:
“In the view of the Commission and for the reasons which follow, the appropriate starting point for any scheme of reform must include the establishment of a single, multi-functional, properly resourced and independent anti-corruption authority with a mandate to confront the abuses inherent in the present system. That authority could be called the Anti-Corruption Authority or Agency of SA South Africa (ACASA).”
Judicial Commission of Inquiry into State Capture Report Part 1 (2022) par 664
This recommendation follows the proposal put forward in the draft Public Procurement Bill, published in 2020, for the creation of a Public Procurement Regulator.
Many other countries on the African continent and beyond have created public procurement authorities of various types. These provide rich experiences for South Africa to look at in considering the creation of a procurement authority of some sort.
This workshop hosted leaders from existing procurement authorities in Kenya, Ghana and Chile to share their experiences in setting up and running such entities. It will also create an opportunity for discussing the proposals put forward for creating such an entity in South Africa. More than 200 participants joined the workshop.
Information on the speakers, presentations and recordings of the sessions can be accessed here.
A major research study by APLU’s Prof Sope Williams-Elegbe on equity and inclusion of women-owned businesses in public procurement in South Africa has been published by the Open Contracting Partnership.
The summary of the report states:
“South Africa’s President Cyril Ramaphosa has committed to setting aside 40% of all government procurement for women-owned businesses (WOB). This report analyses the barriers and the opportunities for WOBs in the South African post-Covid-19 procurement system. In researching the report, we interviewed WOBs, procurement and supply chain managers, regulators, and other stakeholders, and we reviewed the main academic and policy literature on the inclusion of WOBs in public procurement in South Africa and beyond. The report also describes the legal and policy framework for preferential treatment in public procurement in South Africa, barriers to advocacy, and lessons from the Black Economic Empowerment framework, and it makes recommendations aimed at boosting WOBs’ participation in public procurement in South Africa.
The misalignment between South Africa’s economic, gender, and procurement policies and issues related to the focus on “black women” in the preferential procurement legislation is one of the policy and legal barriers. However, institutional and cultural barriers pose more of an obstacle to women’s participation in procurement. Public agencies are reticent to prioritise WOBs in the absence of an explicit mandate to do so and are reluctant to favour new market entrants and small, medium, and micro-enterprises (SMMEs).
Other barriers include the gendered impact of procurement corruption, the gendered impact of Covid-19, which has terminated public contracts in sectors serviced by WOBs, high rates of gender-based violence, and the complexity and opacity of the procurement process. In addition, WOBs in South Africa face financial limitations, inadequate contractor development initiatives, and an inability of the public sector to identify WOBs in relevant sectors.”
The report makes a number of key recommendations on enhancing woman-owned business’ participation in public procurement in South Africa:
The South African government should create a comprehensive policy and regulations to implement gender-responsive procurement.
The government should incorporate an inclusive definition of WOBs covering all women, in line with the International Organization for Standardization’s International Workshop Agreement definition.
The government should implement measures to address transparency, complexity, capacity, and accessibility concerns.
South African government entities should adopt a more integrated and long-term approach to the support and development of WOBs, including training for business owners and employees focused on “soft” skills, such as personal initiative training.
South Africa needs an advocacy and awareness campaign to promote public understanding of the benefits of gender-inclusive procurement.
The Public Procurement Research Group (PPRG) at the University of Nottingham will in 2022 again host the major international conference on public procurement law: Public Procurement: Global Revolutions XI. The dates for the conference, that will take place in person in Nottingham, have been set for 13-14 June 2022.
As in the past, APLU will support the PPRG in this major international event.
The call for papers has been published and can be accessed at this link.
Visit the conference website at www.grppconference.com for more information and updates.
Hart Publishing published the title Public Procurement Regulation in (a) Crisis? Global Lessons from the COVID-19 Pandemic in November 2021. The book was edited by Sue Arrowsmith, Luke RA Butler, Annamaria La Chimia and Christopher Yukins.
The book provides the first systematic analysis of global public procurement regulation and policy during and beyond the COVID-19 pandemic.
Through both thematic chapters and national case studies, the book:
– explores the adequacy of traditional legal frameworks for emergency procurement;
– examines how governments and international organisations have responded specifically to the pandemic; and
– considers how the experience of the pandemic and the political impetus for reform might be leveraged to improve public procurement more broadly.
Public procurement has been critical in delivering vital frontline public services both in the health sector and elsewhere, with procurement of ventilators, protective equipment and new hospitals all hitting the headlines. At the same time, procurers have faced the challenge of adjusting existing contracts to a new reality where, for example, some contracted services can no longer operate. Further, efficient and effective procurement will be an essential, and not a luxury, in the economic recovery.
With case studies on Italy, the UK, the USA, India, Singapore, Africa, Latin America and China, the book brings together the world’s leading academics and practitioners from across Europe, the Americas, Asia and Africa to examine these issues, providing an essential resource for policy makers, legislators, international organisations and academics.
Several APLU researchers contributed to the work, including chapters focusing on the experience in Italy by APLU Fellow, Annamaria La Chimia and in Africa by APLU directors and fellow, Geo Quinot, Sope Williams-Elegbe and Kingsley Udeh.
The book can be ordered from the publisher’s website at this link.
Worldwide there has been an increase in the use of cloud-based computing solutions within the public sector. The International Data Corporation reports that the global public cloud services market grew by 24% in 2020. In South Africa, the recently published draft national policy on data and cloud noted the importance of harnessing the “social potential of data and cloud computing” and put forward a range of policy proposals towards increased adoption of public cloud solutions.
However, it is also widely recognized that a skills gap can be a significant barrier to the effective adoption of cloud-based solutions in the public sector. This skills gap starts with the procurement of cloud services. In a 2019 study conducted by Deloitte in the Australian context, it found that a skills gap and procurement were two major barriers to adopting the use of public cloud by government agencies.
With these considerations in mind, the African Procurement Law Unit (APLU), in collaboration with the School for Data Science and Computational Thinking at Stellenbosch University and Amazon Web Services, convened a roundtable discussion on building capacity in the South African public sector for the procurement of cloud computing. The roundtable, which took place on 8 July 2021, was exploratory in nature. The purpose was to start a conversation between all relevant stakeholders in the public and private sector about how public sector procurement capacity can be developed and strengthened to effectively procure cloud-based solutions. Participants in the roundtable included academics across a range of disciplines and institutions, public sector officials from government departments and public entities, suppliers and consultants.
A recording of the discussion can be found at this link and the presentations can be downloaded here.
It is anticipated that a smaller working group will take the proposals put forward during the discussion forward and convene a second roundtable to put forward concrete proposals to support increased procurement of cloud computing in South Africa.
Public procurement law is one of the fastest growing areas of law globally. In recent years, the role of public procurement in supporting development has been highlighted, becoming a major theme of research, and included in the United Nations Sustainable Development Goals.
Yet, despite it being estimated that on average about 15% of the GDP of Sub-Saharan African countries is expended on public procurement, there is limited research on public procurement and the role of law in Africa. APLU’s 2020 publication released by LexisNexis, Public Procurement Regulation in Africa: Development in Uncertain Times aims to address this gap in the literature.
Transcending academic legalese and philosophical discourse, the title puts forward ideas on arresting procurement maladies and will also be useful for administrative, law enforcement functionaries, consultants, academics, and students interested in expanding their procurement knowledge while contributing meaningfully to African procurement reform.
In her foreword, Professor Thuli Madonsela, former Public Protector of South Africa, says, “Procurement has become the Achilles’ heel of state affairs in South Africa and other parts of the African continent. Yet properly handled, procurement can contribute meaningfully towards good governance and state delivery on sustainable development goals and the advancement of social justice and related human rights.”
Editors Geo Quinot and Sope William-Elegbe, both professors of law at Stellenbosch University and co-directors of the African Procurement Law Unit, bring together a number of essays from academics and professionals working in public procurement law, focusing on public procurement regulation in Africa aimed at development in uncertain times.
Working on a social compact for economic recovery, growth and transformation needs to be the focus for both the private and public sector, with compliant procurement playing a pivotal role in this process. Understanding and identifying the many fault lines that exist to allow for procurement irregularities, will serve to red flag fraud and corruption and increase efficiencies and compliance with the law. As the COVID-19 pandemic has clearly shown, there has never been a more urgent time to engage with these issues.
