06 June 2022

ConCourt rules that Tendering Regulations are still valid for a while

Submitted by Gerrit Davids
ConCourt rules that Tendering Regulations are still valid for a while

The Constitutional Court today, has confirmed that the now declared invalid Preferential Procurement Regulations of 2017 are still in operation and that organs of state are allowed to use it until the transition period runs out in early 2023.

The Court ruled that “As at 16 February 2022, of the 12-month period of suspension, less than a month had elapsed”, following the Supreme Court Appeal (SCA) judgment in November 2020.

It means that National Treasury, in terms of the Superior Courts Act, still has eleven months left or so, until at least January 2023, to allow organs of state to use, the 2017 Regulations.

It must be noted that Treasury has in the interim issued Draft Regulations, with the aim to replace the 2017 Regulations and it would now be in no rush to promulgate it since it has the time to do so, until at least or before the end of January 2023.

What this latest ruling means for organs of state, is that they can continue to use the 2017 Regulations in their tenders, inclusive of aspects like the contentious, Prequalification Criteria as well as who may tender subject to a minimum B-BBEE status level of Contributor, Sub-contracting of a minimum of 30% to EMEs or QSEs and Level 2 black-owned businesses, respectively.

Further, organs of state may continue to use the R50 million threshold under the 80/20 and 90/10 point systems, respectively and where applicable, require goods and services to comply with the Local Content and Production thresholds and stipulations.

Organs of state may also continue, where feasible demand that principal bidders sub-contract a minimum of 30% to EMEs and QSEs as well as entities that are Level 2 black-owned companies, where a contract value would be above R30m.

While awaiting this clarification judgement from the Court, National Treasury granted an exemption to certain organs of state and technically speaking those “Exemptions” would have to be reviewed in order to ascertain whether those applications now truly comply with the stated requirements of the Preferential Procurement Policy Framework Act (PPPFA) of 2000 since the Court has now confirmed that the “Transition Period” will still run until next year.

According to Gerrit Davids, Lead advisor at TaranisCo Advisory, tendering agency, “While a lot of organs of state continued to use the 2017 Regulations post the Court’s ruling in February 2022, this judgment now confirms that organs of state can revert to using it until early next year and bidders would have to comply with these requirements.”

To read a synopsis of the Judgement, visit the “Articles Section” on www.taranis.co.za

For more information on this Ruling, contact: Gerrit Davids. Lead Advisor | TaranisCo Advisory CC  Mobile. +27 (0) 82 496 1657 or E-mail:  This email address is being protected from spambots. You need JavaScript enabled to view it.