On Thursday the Constitutional Court unanimously declared the Public Procurement Act of 2024 unconstitutional and invalid.
The reason was not its substance but the process by which it was passed. Parliament failed to comply with its constitutional obligation to facilitate meaningful public participation.
The judgment is a major setback for procurement reform. But it is not the end of procurement reform.
What the court actually decided
The most important point is what this case was not about. The court did not find that any provision of the act was unconstitutional. It did not criticise the policy choices underpinning the legislation. It did not rule on preferences, set-asides, local content requirements, subcontracting obligations or the proposed Public Procurement Tribunal.
The judgment was entirely procedural. The court found that parliament failed to facilitate meaningful public participation in three key respects: material amendments to chapter 4 were introduced without adequate public consultation; not all public submissions were properly considered; and consultation timeframes were unreasonably short.
Because these defects affected the legislative process itself, the court invalidated the entire act. This judgment is in keeping with other recent judgments from the court emphasising public participation as nonnegotiable (such as the recent Wild Coast case). It is more a comment on the importance of this issue than on the substance of the Public Procurement Act.
Why this matters
The act represented the first serious attempt to consolidate South Africa’s notoriously fragmented procurement system. Instead of a single procurement code, government institutions must continue navigating a maze of legislation, including the Public Finance Management Act, the Municipal Finance Management Act, the Preferential Procurement Policy Framework Act and a range of regulations and Treasury instructions.
The immediate practical consequence is therefore simple: nothing changes. The existing procurement framework remains in place, and the Public Procurement Act falls away before it ever comes into operation. The draft regulations published under the act likewise fall away because they no longer have an enabling statute.
The silver lining
While the judgment is undoubtedly a setback, it is not a rejection of procurement reform. If anything, the court has provided parliament with a roadmap for how to do it properly, namely consult meaningfully, consider all submissions, allow adequate time for participation, and avoid treating public consultation as a box-ticking exercise.
Importantly, all the policy work that went into the act has already been done. The debates have been had. The drafting largely exists. The intellectual investment has not been lost. Based on the public procurement regulations that have been released, we know the National Treasury’s appetite for these reforms has not dimmed, and we could see a similar act presented fairly quickly.
A different political reality
The act was passed in a quite different political environment. Today, major procurement reforms must be navigated through the dynamics of the government of national unity. Provisions that previously attracted political support may face renewed scrutiny and negotiation. That may slow reform. It may also improve it.
A fresh legislative process presents an opportunity to revisit some of the more controversial aspects of the act and build broader consensus around a new procurement framework.
The greatest risk arising from the judgment is not that the act was struck down. It is that government uses the judgment as a reason to do nothing. That would be a mistake. Procurement reform is not dependent on a new act.
The Treasury already has tools available to improve procurement practices, including the publishing of Treasury instructions, Treasury regulations and municipal procurement regulations, which do not require parliamentary assent. Those instruments can and should be used while a replacement statute works its way through parliament.
The government now has two choices. It can treat the judgment as a setback and delay reform indefinitely, or it can view it as an opportunity to produce stronger, more durable legislation through proper constitutional processes.
The act may be gone. The need for procurement reform certainly is not. For now, South Africa’s procurement framework is exactly where it was before the act was passed.
• Tucker is head of public law & regulatory and an Nhlapo partner at Bowmans.
Business Day
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