Whilst the Minister of Finance, Mr Tito Mboweni, stated again in his Budget Speech, that the Draft Public Procurement Bill, will be passed into law before the end the year, it seems that the Standing Committee on Appropriations in Parliament, is not impressed with the content of the Bill.
Mboweni said, “Finalisation of the Public Procurement Bill is urgent. The National Treasury is fast tracking it. The bill addresses fragmentation in procurement legislation. We aim to table this reform before Cabinet before the end of this year.”
However, in October 2020, the Committee heard input from the Parliamentary Budget Office (PBO) and it is of the opinion that the, “Bill in its current form will not result in improved transparency and accountability as intended.”
The aim of the draft Bill is to consolidate numerous other laws and supply chain management regulations, but it has now been labeled as, “limited in its scope”, since the Committee believes that it is not aligned with Section 217(3) of the Constitution, which demands that all tender processes to be, “Fair, Equitable, Transparent, Competitive and Cost-effective”, respectively.
The Committee is also of the view that the Draft Bill, “Does not speak to the advancement of local production (localisation) and the creation of opportunities for women, youth and persons with disabilities.”
It was also pointed out that the, “Bill is silent on how challenges with regard to value for money will be addressed.”
Also, that, “Price is a key determining factor in the awarding of tenders, but in many instances, the prices of goods and services are adjusted after the tender has been awarded.”
Further, the practice of “Deviation” was also highlighted as a concern and the fact that the Draft Bill should address this contentious aspect, in more detail.
The Committee also insisted that the Bill must address the sanction given to companies who’ve defrauded the state, as well broadening the regulations to cover the, “Issue of fronting, and companies found guilty of fronting practices.”
“The committee resolved to call on National Treasury, which is the custodian of the Bill, “to brief it on the many issues raised”, pertaining to the Draft.
According to Gerrit Davids, Lead Advisor at TaranisCo Advisory, a specialist tendering agency, it remains to be seen if Parliament is going to promulgate the desired legislation before the end of the year, since Treasury has yet to appear in front of the Committee.”
Davids says, “On the other hand, Treasury is also faced with a November 2021 deadline, which was given by the Supreme Court of Appeal in November 2020, when it declared the 2017 Procurement Regulations as invalid.”
“Also, despite Parliament not being happy with the current Draft Bill, it is almost a given that it will align the final version, not to what Treasury prefer, but according to the prevailing mood around economic transformation, in terms of the existing B-BBEE legislation,” said Davids.