DEVIATIONS AND VARIATIONS IN SOUTH AFRICAN PUBLIC PROCUREMENT

[A NOTE ON SCM INSTRUCTION 3 OF 2021/22]

Abstract

The article discusses the approach to deviations from the norm of an open bidding process and contract expansions and variations, as set out in SCM Instruction 3 of 2021/22 issued by National Treasury, entitled Enhancing Compliance, Transparency and Accountability in Supply Chain Management. The author contends that the instruction grants public institutions a wide discretion to determine their own policies in relation to deviations and variations, without providing sufficient guidelines for the exercise of the discretion. Unguided and unguarded discretion is an anathema in a constitutional state and cannot be justified based on National Treasury’s newly found deference to the “PFMA functions” of accounting officers and accounting authorities. The degree of discretion vested in public entities ought to be in proportion to the maturity of their control environments.  The stronger the internal control environment within institutions and the greater their capacity for self-governance, the greater the degree of discretion and vice versa.  The author further contends that in the face of the gross abuses of deviations and variations which have occurred in the recent past, it is inappropriate to vest high levels of discretion in public bodies at this stage. The public interest in fair and ethical procurement processes is compromised by the absence of appropriate “safety rails”.