Public Procurement Law
We assist businesses in all areas of Public Procurement Law
Public Procurement Law is an arm of Administrative Law and regulates the use of public funds in the procurement by organs of state of goods and services required to fulfill their service delivery obligations and outcomes. As per section 217(1) of the Constitution, all public procurement must be done in accordance with a system that is fair, equitable, transparent, competitive and cost-effective, which will usually be given effect to in a tender process.
Procurement law, and supply chain management in the public sphere is highly regulated and is underpinned by fundamental public law principles which regulate the interaction between the private and public sectors when dealing with the application of public funds in the state’s delivery of services. Specialist expertise in the field of public procurement and administrative law is essential to ensure that the processes underpinning these relationships meet the constitutional standards set. This may be given further impetus by the regulatory changes proposed by the Draft Public Procurement Bill, particularly in relation to preferential public procurement policy.
Our specialist panel members are well placed to advise both public- and private-sector clients to ensure compliance with the myriad applicable regulatory provisions that underpin public procurement, and where irregularities are present, to advise on the appropriate remedial actions to take.
The State is the largest consumer of goods and services. Public procurement has the potential to boost the economy and drive meaningful social change through the adoption of innovative service delivery solutions. A comprehensive understanding of the applicable regulatory framework is central to participation in this sector of the economy.
- Raisa Cachalia, Caveat Panel Member
Frequently asked questions on Public PROCUREMENT LAW
Public procurement is the purchasing of goods and services by an organ of state from the private sector. This usually finds expression in the advertising of tenders for contracts which are then adjudicated and awarded in line with regulatory prescripts.
Section 217 of the Constitution is the overarching constitutional provision that underpins all public procurement in that it places a positive obligation on the state to ensure that it applies a procurement system that is fair, equitable, transparent, competitive and cost-efficient. It finds expression in legislation such as the Public Finance Management Act, 1999 the Municipal Finance Management Act, 2003 and various Treasury Regulations, Practice Notes and Instructions. It is also the original authority for the creation of a legislative framework for preferential procurement which aims to ensure redress of past economic imbalances when putting state contracts out to tender. This has found expression in the B-BBEE Act, the Preferential Procurement Framework Act, and the 2020 Public Procurement Bill, should it be signed into law.
The purpose of the draft bill is to introduce a comprehensive regulatory framework to govern public procurement in South Africa across local, provincial and national governments as well as for state-owned enterprises and other public entities listed in the Public Finance Management Act, 1999. It also seeks to prescribe a regulatory framework to govern preferential procurement policy going forward.
Tender fraud is when a bidder deliberately submits a tender that contains false or misleading information.
This generally occurs where the award of a tender violates legal prescripts, particularly the requirements of section 217 of the Constitution.
The responsible and lawful application of public funds is imperative not only to ensure that those in need of government services receive the best value for money, but also to ensure that market competitors are treated fairly in competing for the chance to offer services.
- Nico Boshoff, Caveat Panel Member