Monday, 24 February 2020

Draft Procurement Bill published for comment

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The long-awaited Draft Procurement Bill has been published giving the public until 31 May 2020 to submit their input and comments. 

According to Gerrit Davids, Lead Advisor at TaranisCo Advisory, "The Bill deals with various critical issues such as regulating the general procurement environment for organs of state, creating an enabling framework for preferential procurement as well as seeking to manage the total procurement process through delegated powers for officials while also aiming to repeal a number of existing pieces of legislation."  

Davids says, "However from a bidder’s point of view, a number of key issues are of importance, in that once the Bill is accepted, it will instruct the Minister of Finance to create a set of regulations authorising organs of state to give preferences through a “Pre-Qualifying Criteria”, to “persons, or categories of persons, previously disadvantaged by unfair discrimination, in procurement.” 

"The intended framework would use the B-BBEE enabling legislation as its foundation when setting a revised “preference point system and thresholds”, as well as “measures to advance a category or categories of persons or businesses or a sector.” 

Davids also points out that, "The Draft envisages that the applicable “preferences” for government contracts, must be inclusive of considerations like the promotion of certain categories of people in a particular sector, goods made in SA, preferences for local technology, services rendered by SA citizens, contracts which will have high levels of job creation, preferences given to enterprises based in townships and underdeveloped areas as well as the promotion of businesses located in a particular province or municipality respectively."

"Consideration will also be given to the role of manufacturers, the promotion of industrial development and making it compulsory to include SMMEs in high value procurement with a specific focus on women, youth and people with disabilities." 

However, before the Minister of Finance create these Regulations as outlined above, it must consult with the “Minister responsible for women, youth, people with disabilities, small businesses, trade, industry, competition or infrastructure before making a regulation”, which will include these pre-requisites for categories of preference. 

The Draft Bill also seeks to create a mechanism for organs of state to set a minimum “Qualifying Criteria” for all bidders in relation to aspects like, experience, available financial and material resources to execute the contract, profiles of personnel and managerial capacity, past records of similar contracts, professional licensing, or any other set of criteria it may deem necessary to asses the bidder’s capacity.  

The Bill also aims to make it compulsory for organs of state, before awarding a contract, to conduct a due diligence and a verification process, especially in relation to where the bidder or its shareholders have been debarred from doing business with the State. 

Overall, the Draft Bill has a deep bias towards a clear mandate to “advance economic opportunities for previously disadvantaged people and women, the youth and people with disabilities, small businesses, and promote local production.”  

Davids says that, "It seems that larger suppliers doing business with the state would be well advised to be proactive and forge real and sustainable partnerships with these “categories of persons”, which will clearly be the biggest consideration, before a contract is awarded in future." 

For further information on how to create effective and well-planned joint ventures, contact Gerrit Davids at This email address is being protected from spambots. You need JavaScript enabled to view it. or visit (www.taranis.co.za) | Mobile:  082 496 1657

The Draft could be downloaded at: (https://tinyurl.com/sxkcs4z)