Rules relaxed for 100 SOEs
PROCUREMENT: EXEMPTION GRANTED TO STOP DELAYS
Constitutional Court in February declared 2017 regulations unlawful.
More than 110 organs of state have been granted exemption by National Treasury from the provisions of the Preferential Procurement Policy Framework Act (PPPFA).
These exemptions were granted following the Constitutional Court’s decision in February that the 2017 Preferential Procurement Regulations (PPR) issued by the minister of finance were unlawful.
National Treasury highlighted the steps it has taken to ensure that public procurement is not delayed and service delivery is uninterrupted.
It stressed: “National Treasury has never prevented, nor prohibited organs of state from procuring goods and services.”
Economist Dr Roelof Botha previously warned that if government entities waited before putting out a tender or spending money “they are postponing economic activity and ultimately that is going to impact GDP growth”.
The Constitutional Court’s declaration was suspended for 12 months, but the majority judgment was silent about the date on which the suspension expires.
To address this uncertainty, the minister of finance lodged an urgent Constitutional Court application on 4 March to seek confirmation and establish whether the 2017 regulations remain valid until 15 February 2023, unless repealed sooner, or are no longer valid from 16 February 2022, the date of the Constitutional Court judgment.
National Treasury said the registrar of the court had advised that the application is receiving the court’s attention.
Following the declaration of invalidity of the 2017 PPR, National Treasury advised organs of state that, while awaiting clarity from the Constitutional Court:
▶ Tenders advertised before 16 February this year be finalised in terms of the 2017 regulations.
▶ Tenders advertised on or after 16 February be held in abeyance.
▶ No new tenders must be advertised and made available on National Treasury’s website.
It stressed it was only advising organs of state – and not instructing or directing them – and its advice was to curtail the risk of awarding tenders based on regulations that may be invalid.
It said on Friday that it recognised the urgency of the requests for exemption in terms of Section 3 of the PPPFA and rapidly put internal processes in place to ensure that the requests were dealt with expeditiously.
“Once the minister has made his decision on the exemption requests, the acting chief procurement officer communicates the decision to the organ of state concerned. This generally takes 72 hours,” it said. “Organs of state that are granted exemptions may procure goods and services using their procurement policy.”
National Treasury added that the exemption process will continue until new regulations are in place or the Constitutional Court has provided clarity on the matterst, and that it has never prevented or prohibited organs of state from procuring goods and services.
The new draft Preferential Procurement Regulations were published in the national and provincial gazettes for public comment on March 10, with a closing date of April 11.
National Treasury said it is considering all the public comments received on the draft regulations and, after due process, including seeking clarity where required, will publish the new regulations in the Government Gazette and on its website.
National Treasury confirmed to Moneyweb on 26 April that 111 organs of state had to date been granted exemption from the provisions of the act as at 29 March.
It said it was unable to divulge the names of the organs of state “due to confidentiality reasons”.