Public Procurement Bill on the way to adoption by NCOP

In a race against time, the National Council of Provinces’ (NCOP) select committee on finance has adopted with amendments the Public Procurement Bill with the aim of it being accepted by parliament before the final end of business of the National Assembly on May 16. 

All provinces, with the exception of the Western Cape, support the bill, which will be voted on by the NCOP on Thursday.

The National Assembly’s standing committee on finance will consider the amendments on Friday and the National Assembly will vote on the amended bill before it rises on May 16. 

The DA and FF+ opposed the adoption of the bill by the select committee, while the ANC and EFF supported it. 

The bill aims to provide a broad preferential procurement framework for procurement by organs of state and includes sections aimed at empowerment and transformation such as set-asides, pre-qualifying criteria and mandatory subcontracting and localisation in certain circumstances.

Preferences must be given to blacks, women, people with disabilities, small enterprises, co-operatives and military veterans, the latter being added by the select committee.

With a new government after the elections and possibly a new minister of finance and new finance committees in parliament, it was considered preferable to finalise the bill during the current parliamentary term.

In this context, the select committee has introduced a clause in the bill requiring a review of the act within 24 months of its being published in the government gazette. The review must include an evaluation of implementation and the need for amendments, and the Treasury must consult stakeholders, including the National Economic Development and Labour Council (Nedlac). 

Within 27 months of the acting being published, the Treasury must make public a report on the review and submit it to parliament.

In its report on the bill, the select committee noted “that there are several issues raised by the stakeholders and the committee that are not addressed in this bill. The committee sees the bill as a “first phase” bill. Further matters can be considered in a “second phase” bill. 

Committee chairperson Yunus Carrim said the committee spent 40 hours processing the bill. “Even if we had another six months, it’s unlikely we would make any further major changes. 

“It’s a ‘first phase’ bill because there might be some challenges in its implementation. Also, stakeholders who took part in the Nedlac process were unhappy with the changes made by the National Assembly committee and wanted the bill to be sent back to Nedlac. While we respect Nedlac, parliament ultimately decides on a bill, taking into account Nedlac agreements. But we compromised and decided that the minister has to review the act within 24 months, after public consultation, and bring any amendments to parliament in the ‘second phase’.” 

Carrim said the main improvements made to the bill by the committee were that constitutional issues had been addressed and the sequential nature of different forms of empowerment clarified, as well as definitions of terms.

“There is clearer alignment between the different sections. Transparency provisions have been enhanced. Tribunals will be set up in the provinces. Time frames for decision-making have been included. There’s a clearer link with the BBBEE Act.” 

The committee believed that the second phase of the bill should consider the extent of the minister’s power to regulate. It also recommended that within six months of the bill becoming law, the National Treasury estimate the financial cost of implementing the bill and report to the committee on this. 

“The committee is concerned about the capacity of National Treasury and the relevant institutions in all three spheres of government to effectively implement the bill. It notes, however, that the bill provides for different sections of the bill to be implemented at different times. The committee recommends that capacity, funding and other resources should also be taken into account when decisions are taken on this phasing in of the bill. The committee recommends that within six weeks of the committee being constituted in the seventh term of parliament, National Treasury must present an implementation programme on this bill to the committee.”

In an 11th hour letter to the committee sent on Tuesday, the Institute of Race Relations objected to the little time given to stakeholders to make submissions on the final draft of the bill. It also argued that the Treasury needed to disclose what the bill would cost provinces in terms of BEE premiums. 

ensorl@businesslive.co.za