New procurement law 'must be changed to raise transparency'

15 October 2020

South Africa’s draft Public Procurement Bill contains loopholes that mean it will fail to lead to improved transparency and accountability, lawmakers were warned.

The Standing Committee on Appropriations was told by the Parliamentary Budget Office (PBO) the draft bill must be changed to produce the positive effect on public procurement desired by the government.

PBO economic analyst Rashaad Amra told the committee bid transparency should be mandatory for procuring bodies, but in the bill this transparency was at the regulator’s discretion.

Amra said non-sensitive bid information, including the bidding company’s name, directors, shareholders and bid prices, should be publicly available at all stages of the bid process.

South Africa has been rocked by several public procurement scandals. Most recently this has led to many contracts for emergency PPE supplies being investigated after they were directed to politically well-connected business people.

In September civil society group Corruption Watch wrote an open letter to president Cyril Ramaphosa and finance minister Tito Mboweni asking them to fast track the bill.

Corruption Watch executive director David Lewis said the bill was a golden opportunity to reform the procurement system.

The committee also heard the bill needed to make more efforts to advance local production and create opportunities for women, young people and disabled people.

Chairperson of the committee Sfiso Buthelezi said it was important to include localisation as part of the bill itself rather than as a later add-on in a framework.

The committee said it was also concerned the bill failed to address how challenges with regard to value for money would be addressed.

Buthelezi said while price was a key determining factor in the awarding of tenders, in many instances the prices of goods and services were adjusted once tenders were awarded.

In many cases these changes were approved by middle management officials and were worth billions of rand.

The committee also questioned whether under the bill companies that were found to have defrauded the government could be disbarred from doing business with the state.

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