Vuk'uzenzele

Making public funds work for all South Africans

In the report of the Commission of Inquiry into State Capture, Chief Justice Raymond Zondo described corruption in procuremen­t as “the centrepiec­e of state capture”. He consequent­ly made a number of recommenda­tions on how to prevent corruption in the procuremen­t of goods and services by government.

Recently, as part of the extensive work we are undertakin­g to prevent corruption and consign state capture to the past, I signed into law the Public Procuremen­t Act.

This law eliminates the problem identified by Chief Justice Zondo of fragmentat­ion in procuremen­t laws by creating a cohesive regulatory framework.

Among other things, the law establishe­s a Public Procuremen­t Office in the National Treasury, which must put in place measures to ensure the integrity of the procuremen­t process. All the members of this office must perform their functions impartiall­y and without fear, favour or prejudice.

The Public Procuremen­t Office must promote standardis­ation in procuremen­t and modernise the system through technology and innovation. The law focuses on the people who are involved in procuremen­t, requiring them to comply with a code of conduct and receive profession­al developmen­t and training.

No government official may be directed, either verbally or in writing, to violate the required procuremen­t processes. And no official can be victimised or suffer ‘occupation­al detriment’ for reporting any unlawful instructio­n. This is an important provision because many of the abuses that took place during the state capture era involved political office bearers, business people and others putting pressure on managers to flout procuremen­t regulation­s.

The law specifical­ly prohibits any person from interferin­g with or trying to influence any procuremen­t, or trying to tamper with any tender bid after its submission or award. Suppliers who are found to abuse the procuremen­t system or otherwise commit fraud and corruption are prevented through a ‘debarment order’ from participat­ing in any procuremen­t processes for a specified period.

Certain categories of people are automatica­lly excluded from submitting bids to the State. These include public office bearers, public servants in any sphere of government, officials in Parliament and provincial legislatur­es, special advisers and employees of public entities. In other words, people who work for the state may not do business with the state.

The Act will also make the procuremen­t system far more transparen­t. It provides for the use of technology to disclose procuremen­t informatio­n, including awards of bids, the process followed and suppliers awarded. This follows our decision in 2020 to make informatio­n on all COVIDrelat­ed contracts available online. No longer will tenders be awarded in dark corners far from public scrutiny.

Public procuremen­t is about getting the best value for the state. It is also an opportunit­y to promote transforma­tion of the economy and society. The new law therefore provides for set-asides in the allocation of contracts to advance companies owned by people historical­ly disadvanta­ged by unfair discrimina­tion. These include black South Africans, women, youth, persons with disabiliti­es and military veterans.

The approach in the Act is in line with the Constituti­onal requiremen­t that public procuremen­t must be done in accordance with a system which is fair, equitable, transparen­t, competitiv­e and cost-effective. The Constituti­on also says that this should not prevent procuremen­t policies that provide for the protection or advancemen­t of people disadvanta­ged by unfair discrimina­tion.

The Act will enable and encourage the procuremen­t of goods that are produced and services that are provided in South Africa. It will enable government and public entities to use procuremen­t more strategica­lly and effectivel­y to promote the growth of local industry and to create jobs to meet the needs of the state.

As we intensify our collective efforts to build an inclusive economy that creates jobs, the Public Procuremen­t Act allows us to make best use of public funds to support transforma­tion and local developmen­t.

At the same time, by implementi­ng measures to prevent the abuse of public procuremen­t, the Act will help to ensure that public funds are put to the uses for which they are intended.

The report of the State Capture Commission shone a bright light on the weaknesses in our public procuremen­t system. We are now fixing the problems the Commission identified and are making public procuremen­t a more effective instrument for social and economic change.