Private sector says new procurement guidelines are chance to channel R2.4-trillion in public procurement towards local and black-owned suppliers and eliminate fronting
Black Business Council CEO Kganki Matabane . File photo. The private sector has urged the government of national unity to prioritise the implementation of recently released public procurement guidelines to eliminate any ambiguity on the ability of government departments and parastatals to procure from local and black-owned businesses.
The National Treasury published the draft general public procurement regulations and draft public procurement tribunal regulations last week. The private sector says this serves as a critical opportunity to channel more procurement spending — which amounted to about R2.4-trillion in 2024/25 — towards local and black-owned suppliers and eliminate fronting.
The publishing of the draft regulations comes after signals by government departments that they intend to consolidate procurement in some areas, and centralise key functions in ways that have irked the private sector. For example, in a recent written reply to questions from parliament, science, technology & innovation minister Blade Nzimande said the department had engaged the Treasury about the Council for Scientific and Industrial Research and the SA National Space Agency on matters relating to procurement.
He was asked by EFF MP Sophie Thembekwayo whether the department approached the Treasury to request the issuance of an instruction note exempting science councils from open tender requirements to fast-track government uptake of local technology.
“The department ... has engaged the National Treasury, asking guidance on how government departments and public entities can utilise the CSIR for services mandated to the entity in terms of its act within the provisions of the Public Finance Management Act,” Nzimande replied. “The asked the National Treasury whether there are mechanisms that can be afforded to the CSIR similar to the one afforded to the State Information Technology Agency, such as the issuing of the Instruction Note.
The department is still waiting for feedback from the National Treasury in this regard. ” The minister said the department had engaged the Treasury about the possibility of centralising procurement of satellite imagery across government through the agency and to confirm whether Sansa will serve as the sole service provider of satellite imagery on behalf of organs of state.
“To enable consistent implementation, the National Treasury was requested to formally communicate Sansa’s sole service provider status to accounting officers and supply chain management units across government. ” Dr Nicolaou Stavros, chair of Pharmaceuticals Made in South Africa , said the state of localisation at the public pharmaceutical procurement level has been undermined by importers fronting as local producers to get department of health contracts, causing the sector to gradually deindustrialise.
“These draft regulations are important because 70% of all pharmaceuticals are procured through the public sector. That is where the economies of scale reside. If we cannot leverage these, we will struggle to create export markets in Africa and beyond, when we should in fact be the pharmaceutical exporters of choice on the continent,” he said.
Stavros said it was counterintuitive and contrary to the public procurement policy to continue to procure the way that South Africa has been when the country faces a significant disease burden. Black Business Council CEO Kganki Matabane said that since the introduction of the Preferential Public Procurement Framework Act in 2000, there were no set-aside clauses to allow for contracts that only black firms could bid for, and this critical change was introduced in the latest regulations.
“Finally, just before elections, we got the act, and the president signed it just before the GNU came in in 2024,” he said. “Once the legislation was passed, National Treasury was supposed to develop the regulations to guide this legislation. Unfortunately, they dragged their feet, and it’s been nearly two years since the president signed it.
However, we welcome these regulations. ” Matabane said previous legislation did not allow for set-asides with contracts that only black-owned or women-owned businesses could bid for.
As a result, critical transactions, such as Eskom’s development of 14,000km of transmission line and Transnet’s rail line concessioning, could easily be taken up by established and foreign companies. The draft general public procurement regulations seek to bring into effect the Public Procurement Act of 2024, which was approved by President Cyril Ramaphosa in 2024. Submissions on the draft public procurement tribunal regulations are open until May 15.
The draft paper states that a procuring institution may procure goods from a manufacturer if the local manufacturers have been determined in terms of section 20 of the act. It also said a procuring institution must, in donor or grant-funded procurement, prioritise local content and inclusive participation.
“A procuring institution must include in its strategic procurement plan and procurement. policy measures to promote beneficiation and innovation. by advancing local beneficiation rather than procuring imported goods. “A procuring institution must include in its procurement policy measures to advance the creation of jobs, labour absorption, and development of small enterprises within a particular geographic area by subcontracting a specified minimum percentage of the contract value to local small, medium and micro enterprises as a condition of contract.
” The draft policy said ownership and eligibility requirements for set-asides include entities that are 100% owned by black people. Ownership and eligibility conditions under pre-qualification include that suppliers demonstrate that at least 40% of prior procurement was spent on enterprises that are at least 51% owned and managed by black persons.
The basis for the proposed minimum set-aside targets, as derived from the sector codes and the generic B-BBEE framework, includes 30% black people anchored in all codes, particularly the forestry, ICT, and legal sector codes, and the Generic Code’s priority for procurement from 51% black-owned entities. Sign up or sign in now.
Regulations Guidelines Black Economic Empowerment Bee Black Business Council Bbc Department Of Science Technology And Innovation Blade Nzimande Csir Centre For Science And Industrial Research National Treasury South African National Space Agency Sansa Eff Sophie Thembekwayo Nicolaou Stavros Pharmisa Phamaceuticals Manufactured In Sa Kganki Matabane
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Sedibeng top cop admits to attending parties at infamous Joburg venueWhite House on the Hill is the preferred location for meetings between senior police officials and private individuals, allegedly to influence outcomes of criminal investigations.
Read more »
SGT Solutions achieves level one B-BBEEThe company is still recognised as a level one contributor, which means customers will be able to reflect the maximum of 135% of their procurement spend on their scorecard.
Read more »
North West disaster management assesses damages after heavy rains - SABC NewsPublic and private properties were destroyed in Rustenburg, Matlosana and Mahikeng.
Read more »
Public procurement rules polarise business lobby groups along racial linesWhile Black Business Council says transformation should be intensified, Sakeliga is mulling legal action
Read more »
New acting national top cop to focus on weaknesses in procurement processPresident Cyril Ramaphosa announced General Puleng Dimpane’s appointment on Thursday, in light of placing General Fannie Masemola on precautionary suspension.
Read more »
Boost for SMEs as UK high commission and JSE collaborate on finance supportProgramme provides funding through capital matching activities, including access to the bourse’s private placements platform
Read more »