IRR unveils draft legislation to save SA billions every year through “value-for-money” focus

South Africa must choose between continuing a procurement system that rewards connections at the cost of service delivery and adopting one that puts those in need first and rewards value and actual delivery.

This is the message from the Institute of Race Relations (IRR) at a webinar launching the Value for Money Bill – a new groundbreaking legislative proposal to overhaul the way government spends public money.

Hosted by IRR head of Strategic Communications, Hermann Pretorius, with IRR Fellow, Gabriel Crouse, the author of the Bill, as guest, the event unveiled what the IRR calls a “clean, constitutional, and pro-growth replacement” for the current procurement regime.

Says Pretorius: “The point system of the last 20 years of picking favourites based on race-based discrimination has failed South Africans. It has inflated costs, encouraged corruption, and slowed service delivery to those most in need. The IRR’s pioneering yet common-sense Value for Money Bill finally gives full effect to section 217 of the Constitution by making value for money the decisive criterion for every cent of public procurement spending in the country.”

The Value for Money Bill replaces the complex points-based preference system with a single, transparent standard: the tender that offers the best value over its full life cycle wins. It retains limited and transparent tie-break preferences, such as proven delivery, employment intensity, financial soundness, and a short transitional race-based tie-break, for cases where bids are equal on value.

The Bill also mandates:

• Digital transparency: publication of all awards, reasons, and contracts on a public repository managed by National Treasury.
• Monthly reporting: open data on all tenders, enabling media and civil society oversight.
• Fast payments: an e-invoicing system requiring government to pay valid invoices within five days.
• Strict accountability: criminal penalties and debarment for bid-rigging, collusion, and falsification.

“True transformation comes when taxpayers’ money buys quality, efficiency, and opportunity,” Pretorius added. “The people most reliant on public services, especially the poor, benefit most when corruption and waste are eliminated. BEE premiums in public procurement has not only entrenched an elitist form of fake transformation, but has also cost the country hundreds of billions. South Africa today is a poorer country with fewer services delivered to vulnerable people because of the fake transformation designed into the rigged procurement system that eschews value for money.”

The webinar also outlined the IRR’s vision of the necessity for a national debate on value-for-money procurement reform.

Says Pretorius: “The ice is broken. The conversation must now happen. We call on Parliament, business, and civil society to back the constitutional standard of fair, competitive, cost-effective procurement over patronage politics.”

A full copy of the Value for Money Bill and explanatory notes are available on the IRR’s website at: https://irr.org.za/whatsacanbe/files/value-for-money-bill.pdf

A recording of the webinar has been posted on the IRR’s social media platforms, or can be accessed here: https://www.youtube.com/watch?v=a-IdnAPfL_g

Media contacts: Gabriel Crouse, IRR Fellow Tel: 082 510 0360 Email: gabriel@irrlegal.org.za

Hermann Pretorius IRR Head of Strategic Communications Tel: 079 875 4290 Email: hermann@irr.org.za

Media enquiries:

Anneke Burns

IRR Public Relations

+27 71 423 0079

anneke@abpr.co.za