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It is becoming increasingly clear that a number of additional changes are likely to be introduced to the way in which the public sector undertakes procurement.
Already the regulations associated with the Preferential Procurement Policy Framework Act, or PPPFA, have been amended to align the rules with South Africa’s industrial and black economic-empowerment policies.
This has also resulted in the Department of Trade and Industry beginning to ‘designate’ products for procurement from local manufacturers.
In addition, State-owned companies have been told to amend their procurement systems to support the reindustrialisation thrust, with a number of the products identified in the ‘first wave’ of designations, such as power pylons and rail rolling stock, applicable mainly to entities such as Eskom, Transnet and the Passenger Rail Agency of South Africa.
But other procurement changes are also on the cards, with government finally coming to terms with serious and systemic failures – failures that have undermined government’s ability to secure value for money and which have also facilitated widespread procurement-linked corruption.
In his February Budget address, Finance Minister Pravin Gordhan indicated that government had started taking steps to strengthen efficiency in public spending, to eliminate wastage, to improve the alignment between allocations and policy priorities, and to root out corruption.
Gordhan also announced that some specific steps were being taken by the National Treasury to improve government’s procurement capability, including the appointment of a chief procurement officer, who will have overall responsibility for monitoring procurement across government. He also hinted at more rigorous tender procedures.
What is not yet certain, though, is the form these new tender procedures will take.
There have been some suggestions that there could be greater centralisation and even the re-establishment of the State Tender Board. The options are still the subject of a review.
However, Economic Development Minister Ebrahim Patel says that, while the details are still being worked out, the guiding principle will be the introduction of a procurement system that reduces the cost for government and, by extension, taxpayers.
“That means that not every entity should cling on to the [procurement] power that they have.”
It is possible that centralised, or common, tender arrangements could emerge on a fit-for-purpose basis, where it could make sense to procure in a manner that “goes beyond one city, one municipality, one province”.