IRR Legal applauds ConCourt decision on public procurement

The Constitutional Court has struck down the Public Procurement Act (PPA), of 2024, due to Parliament’s failure to facilitate public participation.

This is a major victory for South Africans, service delivery recipients, voters, municipalities and other organs of state. It opens the path towards finally allowing South Africa to maximise value for money in public procurement.

The PPA, which never came into force, would have governed how roughly R1.2 trillion is spent every year. It would have required “set asides”, and “pre-qualification” in government contracts based on features such as race, and MK-veteran status.

IRR Legal opposed this law at every stage of its development, including by giving written arguments to the Constitutional Court upon its invitation. There, IRR Legal focused on the false claim by National Treasury in its legally required memorandum to the original Bill that the PPA would have “[n]o substantial financial implications for the State”.

In relation to that, the court went on to rule that IRR Legal's specific challenge to the PPA based on this falsehood under the Public Management Finance Act could be heard separately.

In his oral summary of the judgment against the PPA, Acting Justice Lister Gcinikaya Nuku focused on two points; the public not being given an opportunity to participate at the National Assembly after the Bill was substantially changed, and Parliament’s deviation from its own standards on timelines.

As an example of such a deviation, IRR Legal and all other stakeholders had only four hours between receiving copies of the amended Bill and the opportunity to present at a Parliamentary meeting on it. Moreover, each presenter was given only two minutes.

In those two minutes, IRR Legal founding director Gabriel Crouse noted that the Bill’s flaws “render it completely procedurally unworkable in terms of the constitutional transparency requirements”.

It would have been better for Parliament to heed the warning then, in November 2023, and spare the public the heavy court costs that followed.

While Justice Nuku did not comment on the merits of the PPA, he did identify a material change that IRR Legal repeatedly singled out as a major danger: “Specific preference targets for military veterans,” he noted, “should warrant public scrutiny.”

What Next?

South Africa will operate under its current procurement laws, that allow for 25% BEE “preference premiums”, in the words of treasury official Willie Mathebula.

IRR Legal will continue its drive to make public the overall cost of BEE premiums to every organ of state in the country.

IRR Legal will continue to motivate for reducing BEE premiums to R0.00, as is indicated to be the supermajority’s preference in multiple independently conducted opinion surveys.

The Institute of Race Relations will continue to promote the adoption of the Value For Money Bill to improve service delivery for those who need it most, while stimulating inclusive economic growth.

Media Contact: Gabriel David Crouse, Founding Executive Director, IRR Legal Tel: 082 510 0360 Email: gabriel@irrlegal.org.za 

Media enquiries: Michael Morris Tel: 066 302 1968 Email: michael@irr.org.za