Public Procurement Bill gets National Assembly nod

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In June 2023, the Minister of Finance introduced the Bill that seeks to, amongst others, create a single framework that regulates public procurement (including preferential procurement) by all organs of state. The Bill also promotes the use of technology to make procurement processes more efficient and effective, while enhancing transparency and integrity to combat corruption.

The Memorandum on the Objects of the Bill explains that the Bill aims to, among other things, provide for:

• the establishment of a Public Procurement Office (PPO) within the National Treasury and its functions;
  
• the functions of provincial treasuries;
  
• the functions of procuring institutions;
  
• measures pertaining to the integrity of the procurement process;
  
• [a] preferential procurement framework;
  
• general procurement requirements;
  
• enabling regulations on a procurement system including different methods of procurement and different regulations for different types of procurement;
  
• the use of information and communications technology in procurement;
  
• dispute resolution mechanisms; and
  
• the repeal and amendment of certain laws.

During September to December 2023, the Standing Committee on Finance invited and received written submissions, held public hearings and deliberated on the Bill. The National Assembly subsequently passed the Bill on 6 December 2023, whereafter it was referred to the National Council of Provinces (NCOP) for concurrence. The NCOP's Select Committee on Finance (the Select Committee) invited stakeholders and interested parties to submit written submissions on the Bill by 22 February 2024.

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After receiving the feedback, the National Treasury informed the Select Committee on 19 March 2024 about the key points raised in the submissions. These key issues related to preferential procurement, independence of the PPO, integrity, transparency, accountability and anti-corruption measures, among other things.

Following this, the Select Committee deliberated on the Bill and made further proposed amendments to the Bill on 2 May 2024. On 7 May 2024, the Select Committee adopted the Bill with the proposed amendments. The Select Committee's proposed amendments were incorporated into the Bill, which the NCOP passed two days later on 9 May 2024 and referred the Bill back to the National Assembly for its consideration.

Since the Bill has been classified by the Joint Tagging Mechanism as a section 76 Bill (Ordinary Bills that affect the provinces) and was passed by the NCOP with amendments, the National Assembly could either accept or reject the NCOP's proposed amendments to the Bill. On 10 and 13 May 2024, respectively, the National Assembly's Standing Committee on Finance considered and endorsed the Select Committee's proposed amendments to the Bill and adopted the Bill with the amendments.

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"Prescribed" is defined to mean prescribed by regulation. Notably, for various chapters of the Bill to effectively come into force and/or be implemented effectively, the Minister of Finance is required to promulgate regulations.

These include, amongst others, the chapters dealing with procurement integrity and debarment (including a prescribed code of conduct, prescribed procedures to identify automatically excluded persons, their immediate family members and related persons as well as the prescribed declaration of interest to be made by bidders and applicants for database registration), preferential procurement (including developing and implementing a procurement policy which must be in accordance with regulations made in terms of the Bill and must provide for setting aside of bids in accordance with prescribed thresholds and conditions), and general procurement requirements (amongst others, the Minister must prescribe a framework within which a procuring institution must develop and implement its procurement system).

Before the Minister of Finance promulgates regulations; the Minister of Finance is required to:

• consult ministers on draft regulations affecting the portfolio of those ministers;
  
• consult organised local government on draft regulations affecting municipalities or municipal entities, and
  
• amongst others, publish the draft regulations and invite submissions to be made in respect thereof.

The National Assembly passed the Bill without further amendments on 16 May 2024, and it now awaits the President's assent and signature before it becomes an Act of Parliament.