Is it an impossible feat to address the woes of the apartheid legacy through public sector procurement?

Procurement Law . 04 Mar 2016

The advancement of persons disadvantaged by discriminatory laws of our past has long been an objective recognised by the founding fathers of our current Constitution. The Preferential Procurement Policy Framework Act 5 of 2000 (“PPPFA”) was promulgated to give effect to s217(3) of the Constitution, which provides for an implementation mechanism, through national legislation, for the preferential procurement policy referred to in s217(2). The latter section states that the five principles of procurement (fairness, equitability, transparency, competitiveness and cost-effectiveness) embodied in s217(1) do not prevent organs of state from implementing a preferential procurement policy providing for “categories of preference in the allocation of contracts” and “the protection or advancement of persons or categories of persons disadvantaged by unfair discrimination”.

The PPPFA was enacted as an empowerment tool to encourage increased economic participation of black people and marginalised groups through public sector procurement.

The scoring system was one of the mechanisms put in place to address that goal. However, one of the unintended consequences thereof is that it has failed to adequately attain that objective.  The unfortunate reality of the application of the preference point system is that it has the effect of perpetuating discrimination rather than the intended eradication thereof.

Perhaps a bolder solution could be to utilise a preference point system which allocates more points for categories of preference across the price board.

National Treasury is currently conducting an extensive review of the legislative framework governing procurement and supply chain management.  The proposition is that legislation pertaining to supply chain management is too fragmented hence the draft Procurement Bill.  Some of its stated objectives are to fully establish the Office of the Chief Procurement Officer; to ensure that public sector supply chain management is consistent with the five principles embodied in s217(1) of the Constitution; and to effectively implement socio-economic transformation objectives through public sector procurement. We trust that the proposed legislation will achieve the intended objectives.