TIME TO GO BACK TO FIRST PRINCIPLES: A CRITICAL ANALYSIS OF THE 2017 PROCUREMENT REGULATIONS REVEALS THEM TO BE SHORT OF THE LEGALITY-CUM-RATIONALITY MARK

Lauren Kohn

Abstract


Tendering has become an increasingly messy, high-stakes business; a disconcerting fact given the essential role public procurement plays in ensuring the delivery of vital goods and services to the public (using public money). The new (2017) Procurement Regulations complicate matters through, in particular, their allowance of pre-qualification criteria based on preference. In this article, I analyse three key ways in which the new Regulations seek to go further in the name of empowerment at the expense of competitiveness and hence cost-effectiveness. I illustrate that while not all of these new tools fall short of the legal mark, the use of tender conditions based upon preference for the purposes of pre-qualification, is unlawful and irrational given the methodology under the empowering Procurement Act and the need to give effect to all the constitutional procurement principles in a balanced way. I consider the likely practical knock-on effects of this; namely a perverse increase in fronting practices and hence diminished substantive empowerment, and an increase in litigation for non-compliance with tender conditions. On the latter score, I provide a jurisprudential snapshot of our courts’ varying approaches to this assessment, culminating in an analysis of the AllPay test which I caution should be applied correctly and consistently to reduce the increasing lack of certainty in the procurement arena – recently aggravated by our highest court’s greenlight in Gijima for state self-review via the flexible principle of legality. I conclude by making some suggestions for reform that would be congruent with our blueprint constitutional ‘1st principles’ and perhaps alleviate some of the pressure on our resource-stretched courts.

Keywords


public procurement; preferential procurement regulations; South Africa

Full Text:

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References


Books

Bolton, P. 2007. The Law of Government Procurement in South Africa. Durban: LexisNexis

Hoexter, C. 2012. Administrative Law in South Africa. Cape Town: Juta

Williams-Elegbe, S. & Quinot, G. 2018. Public Procurement Regulation for 21st Century Africa. Cape Town: Juta

Chapters in edited collections

Hoexter, C. 2011. The rule of law and the principle of legality in administrative law today. In Carnelley, M. & Hoctor, S. (Eds.). Law, Order and Liberty: Essays in Honour of Tony Mathews. Cape Town: Juta

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Journal Articles

Boonzaier, L. 2018. A decision to undo. South African Law Journal 135(4): 642

Cachalia, R. 2015. Clarifying the exceptional circumstances test in Trencon: an opportunity missed. Constitutional Court Review 7:115

De Beer, M. 2018. A new role for the principle of legality in administrative law: State Information Technology Agency Soc Ltd v Gijima Holdings (Pty) Lt.’ South African Law Journal 135(4): 613

Hoexter, C. 2000. The Future of Judicial Review in South African Administrative Law. South African Law Journal 117: 484

Klare, K. 1998. Legal Culture and Transformative Constitutionalism. South African Journal on Human Rights 14(1): 146

Kohn, L. 2013. The burgeoning constitutional requirement of rationality & the separation of powers: Has rationality review gone too far? South African Law Journal 130: 810.

Kohn, L. & Cachalia, R. 2017. Restitutionary Measures properly understood & the extension of the Quota Ban – Locating SARIPA in the s 9(2) Van Heerden Framework. Acta Juridica 146

Kohn, L. 2016. The Bashir judgment raises the red flag for the Rule of Law and the Judiciary. South African Law Journal 133(2): 246

Kohn, L. 2015. The Test for ‘Exceptional Circumstances’ where an Order of Substitution is sought: An Analysis of the Constitutional Court judgment in Trencon against the backdrop of the Separation of Powers. Constitutional Court Review 7: 91

Langa, P. 2006. Transformative Constitutionalism. Stellenbosch Law Review 17: 351

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Quinot, G. 2014. The role of quality in the adjudication of public tenders. Potchefstroom Electronic Law Journal 1112

Quinot, G. 2016. Strict compliance with tender conditions and tax clearance certificates. JQR Public Procurement.

Quinot, G. 2017. The New Preferential Procurement Regulations. JQR Public Procurement.

Cases

ABET Inspection Engineering (Pty) Ltd v The Petroleum Oil and Gas Corporation of South Africa [2018] ZAWCHC 7

Aero-Duct Moya CC v Minister of Public Works (936/2019) [2019] ZAECPEHC 32

Afriline Civils (Pty) Ltd v Minister of Rural Development And Land Reform; In re: Asla Construction (Pty) Ltd v Head of the Department of Rural Development and Reform [2016] 3 All SA 686 (WCC)

AllPay Consolidated Investment Holdings (Pty) Ltd v Chief Executive Officer of the South African Social Security Agency (No. 1) 2014 (1) SA 604 (CC)

AllPay Consolidated Investment Holdings (Pty) Ltd v Chief Executive Officer of the South African Social Security Agency (No. 2) 2014 (4) SA 179 (CC)

Contour Technology (Pty) Limited v Chairperson of the Bid Adjudication Committee: Modimole Local Municipality [2017] ZAGPPHC 496

Democratic Alliance v Public Protector; Council for the Advancement of the South African Constitution v Public Protector [2019] ZAGPPHC 132

Dr JS Moroka Municipality v Betram (Pty) Limited [2014] 1 All SA 545 (SCA)

Electronic Media Network Limited Others v e.tv (Pty) Limited 2017 (9) BCLR 1108 (CC)

Eskom Holdings SOC Limited v McKinsey and Company Africa (Pty) Ltd [2019] ZAGPPHC 185

Esorfranki Pipelines (Pty) Ltd and Another v Mopani District Municipality 2 All SA 493 (SCA)

Fedsure Life Assurance Ltd v Greater Johannesburg Transitional Metropolitan Council 1999 (1) SA 374

Glenister v President of the Republic of South Africa [2013] ZACC 20

Intsimbi Industrial Manufacturing CC v Municipality Manager of the Nelson Mandela Metropolitan Municipality [2015] ZAECPEHC 64

Joburg Market SOC Ltd v Aurecon South Africa (Pty) Limited [2017] ZAGPJHC 145

Logbro Properties CC v Bedderson NO [2003] 1 All SA 424 (SCA)

Masetlha v President of the Republic of South Africa 2008 (1) SA 566 (CC)

MEC for Health, Eastern Cape and Another v Kirland Investments (Pty) Ltd 2014 (3) SA 481 (CC)

Minister of Social Development v Phoenix Cash & Carry Pmb CC [2007] 3 All SA 115 (SCA)

Mobile Telephone Networks (Pty) Ltd v Transnet Soc Ltd [2018] ZAGPJHC 454

Moseme Road Construction CC v King Civil Engineering Contractors (Pty) Ltd 2010 (4) SA 359 (SCA)

Pharmaceutical Manufacturers Association of South Africa and Another: In re Ex Parte President of the Republic of South Africa 2000 (2) SA 674 (CC)

Passenger Rail Agency of South Africa v Swifambo Rail Agency (Pty) Ltd 2017 (6) SA 223 (GJ)

Sanyathi Civil Engineering & Construction (Pty) Ltd and Another v eThekwini Municipality, Group Five Construction (Pty) Ltd v eThekwini Municipality (KZP) [2012] 1 All SA 200 (KZP)

State Information Technology Agency SOC Limited v Gijima Holdings (Pty) Limited 2018 (2) SA 23 (CC)

Steenkamp NO v Provincial Tender Board of the Eastern Cape 2007 (3) SA 121 (CC)

Swifambo Rail Leasing (Pty) Limited v Passenger Rail Agency of South Africa (1030/2017) [2018] ZASCA 167

Trencon Construction (Pty) Limited v Industrial Development Corporation of South Africa Limited 2015 (5) SA 245 (CC)

VDZ Construction (Pty) Ltd v Makana Municipality [2011] ZAECGHC 64

Viking Pony Africa Pumps (Pty) Ltd t/a Tricom Africa v Hidro-Tech Systems (Pty) Ltd 2011 (1) SA 327 (CC)

Legislation

Constitution of the Republic of South Africa, 1996

Broad-based Black Economic Empowerment Act 53 of 2003

Electoral Act 73 of 1998.

Local Government: Municipal Systems Act 32 of 2000

Local Government: Municipal Finance Management Act 56 of 2003

The Promotion of Access to Information Act 2 of 2000

The Promotion of Administrative Justice Act 3 of 2000

The Public Finance Management Act 1 of 1999

The Preferential Procurement Policy Framework Act 5 of 2000

The Preferential Procurement Regulations, 2011, published in Government Notice No. R502 of 8 June 2011.

The Preferential Procurement Regulations, 2017, published in Government Notice No. R32 of 20 January 2017.

Internet Sources

Kohn, L ‘State procurement: The changing face of Public Procurement in SA’ (2018) http://www.caveatlegal.com/state-procurement-the-changing-face-of-public-procurement-in-sa/?fbclid=IwAR3mr4W3b3nRnQG_0hRGrjd2ADj7GPdo99fCSxJQd2hrGDU_ooQEhoFmlzg.

Van Wyngaardt M ‘Public Procurement aligned to more stringent regulations as Bill goes to Cabinet’ (2018) https://www.polity.org.za/article/public-procurement-aligned-to-more-stringent-regulations-as-bill-goes-to-cabinet-2018-02-21

World Bank The World Bank Group and Public Procurement: An Independent Evaluation International Bank for Reconstruction and development / The World Bank (2014) https://openknowledge.worldbank.org/handle/10986/16673

The National Treasury Public Sector Supply Chain Management Review (2015)

http://www.treasury.gov.za/publications/other/SCMR%20REPORT%202015.pdf

The National Treasury’s ‘Frequently asked Questions Brochure’ on the 2017 Procurement Regulations http://www.nwpg.gov.za/treasury/procurement2/documents/Frequently%20asked%20Questions%20and%20Generic%20%20Answers%20-%20Preferential%20Procurement%20Regulations%202017%20-%20Version%201%201.pdf

Gauteng Provincial Government: Supply Chain Management Policy Model http://www.treasury.gpg.gov.za/Documents/Supplier%20Chain%20Management%20Policy%20Model.pdf.




DOI: https://doi.org/10.14803/6-1-24

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