No tendering: Government bodies can apply for exemptions

  • Following the effective ban on new government tenders since the end of February, the Treasury has relaxed its approach.
  • Government departments and state-owned enterprises can run their own tenders if they get an exemption from the minister.
  • The tenders have been suspended pending the Constitutional Court to clarify the BEE requirements.

Following the effective ban on new government tenders since the end of February, the Treasury has relaxed its approach.

On February 25, the Treasury issued a circular stating that the issuance of bids would be “suspended” after the Constitutional Court dismissed an appeal by Finance Minister Enoch Godongwana to overturn a previous court ruling that it had shelved. the regulations signed in 2017.

The case was initiated by Afribusiness and claimed the 2017 regulations were unfair because they allowed for “pre-qualifications” to be established for tenders. For example, state institutions might declare that only black-owned businesses qualify for the bidding.

The Treasury has requested urgent clarifications from the Constitutional Court on its ruling and, in the meantime, has effectively asked the governing bodies to suspend the new tenders.

This has had a great impact on state bodies and government departments. This was confirmed, for example, by the Department of Water and Sanitation to Fin24 the suspension hit R2 billion in its infrastructure tenders.

The Treasury says state bodies can request exemptions from some provisions of the framework law for preferential procurement, which would allow them to proceed with new tenders.

“Once the minister has made his decision on the exemption requests, the interim procurement manager communicates the decision to the relevant state body. This process generally takes 72 hours from question to answer.”

The Treasury said this process will continue until new regulations are in place or until the Constitutional Court provides clarity on the Afribusiness case.

Treasure released new government procurement regulation for comment in March.

READ | The Treasury releases new rules on public procurement after the cheating of the suspension of tenders

The new regulations restore the system that existed before the 2017 rules iteration and eliminate the pre-qualification rules challenged in court by Afribusiness NPC.

In this system, the tender scoring formula proposes an 80/20 BEE preference points system for the purchase of goods worth up to R50 million and a 90/10 BEE preference points system for assets worth more than R50 million.

On Friday, the Treasury said it is considering public comments and “after due process” will publish the new regulations in the Gazette.

“With regard to the application of the Minister of Finance to the Constitutional Court aimed at clarifying the sentence of February 16, 2022, the Chancellor of the Court had informed that he received the attention of the Court and that the parties will be informed when the sentence is pronounced,” added the Treasure.

on Fridays, Eskom welcomed the Treasury’s easing of some procurement constraintsa move he believes will help it move faster to solve some of the utility’s pressing operational challenges.

Eskom said the amendment now allows it to approve contract changes without approval from the National Treasury and engage directly with original equipment manufacturers and maintenance providers of the most critical equipment and services required in the electricity generation process. The amendments also provide Eskom with flexibility and agility regarding expansions, diversions and handling of pressing issues in its procurement processes.