Treasury has gazetted draft preferential procurement regulations under the Preferential Procurement Policy Framework Act for public comment in order to address the declaration of invalidity by the Constitutional Court of the 2017 regulations.
New regulations are necessary so that organs of state can implement their own preferential procurement policies.
The court found that the minister of finance did not have the power to impose preferential procurement regulations on organs of state which must determine their own policies and that the BEE pre-qualification requirements of the 2017 regulations were unlawful because they fell outside the ambit of the framework provided for in the act. The proposed draft regulations exclude these pre-qualification requirements.
Treasury said in a notice published on Friday that finance minister Enoch Godongwana had filed an application to the Constitutional Court to obtain clarity as to whether the court upheld the Supreme Court of Appeal’s suspension of its declaration of invalidity of the regulations for 12 months. Papers have also been served on all parties and the registrar of the Constitutional Court has given directions to the parties on the filing of papers during March.
Last Friday Treasury director-general Dondo Mogajane caused panic when he issued a circular to all organs of state saying they must not advertise new tenders, that tenders advertised since the February 16 court judgment must be held back and that tenders advertised in terms of the regulations prior to the judgment could continue. While this appeared to be an instruction the Treasury later clarified that it was only advice.
“This advice was furnished to curtail the risk of awarding tenders based on regulations that may no longer be valid,” Treasury said.
The draft regulations gazetted for public comment propose to prescribe the threshold amounts in which the 80/20 and 90/10 preference point system must be used together with the formula to be applied. Written comments must be submitted by April 11 by which time the Treasury hopes to have obtained clarity from the Constitutional Court as to whether it upholds the Supreme Court of Appeal's suspension of invalidity.
The 80/20 point system (80 points for price and 20 points to achieve the goals specified in the act) will be used for tenders for acquisitions or disposals with a rand value equal or above R30,000 and up to R50m and the 90/10 point system for tenders purchases or disposals with a rand value equal to or above R50m
The Treasury said in a notice released on Friday that until the new regulations take effect or the Constitutional Court’s clarity on the suspension of the invalidity of the 2017 regulations is provided (whichever occurs first) an organ of state may request an exemption from the provisions of the act for a specific procurement or category of procurement requirements. “Such requests should be limited to procurement requirements that cannot await the new regulations or the Constitutional Court’s clarity,” the notice said.
The Treasury acknowledged that there was a need to process requests for exemption as quickly as possible and said that a process was in place for the submission of requests for exemption for the consideration of finance minister Enoch Godongwana. Provision is also made for the acting chief procurement officer Molefe-Isaac Fani to communicate to an organ of state the minister’s decision on its exemption request.
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