Constitutional Court declares South Africa’s new tender and procurement laws invalid
The Constitutional Court has declared the Public Procurement Act of 2024 unconstitutional and invalidated it following legal challenges by the Western Cape Government (WCG) and the trade union Solidarity.
The Act aimed to create uniform rules for how government institutions, provinces, and municipalities spend public money on goods and services.
The laws were not yet in effect, but draft regulations were published in April.
Arguments raised by the WCG and Solidarity focused on the implementation of the laws, specifically the public participation process.
They argued that late changes were made to the laws and then hurriedly rubber-stamped through parliament so they could be enacted, without first consulting the public on what had been altered.
The apex court supported these arguments, ruling that the National Assembly failed to fulfil its duty to allow reasonable public participation following significant changes to the law.
“The Western Cape Government has long held the view that sweeping national legislation cannot be rushed through Parliament without giving the public and affected spheres of government a fair opportunity to be heard,” said the WCG.
Before passing the bill, the National Assembly made major edits but did not provide sufficient opportunities for public input.
Instead of meaningful consultations, the process was rushed, treating public feedback as an afterthought, the WCG said.
As a result, citizens, provincial authorities, and affected groups were not given a fair chance to express their views on the changes.
The ConCourt agreed with the provincial government that the lack of proper public participation violated Parliament’s responsibilities.
The WCG said that it made multiple attempts to engage with the President and the Minister of Finance to address their constitutional concerns through intergovernmental channels.
However, because these concerns were unresolved, the WCG felt compelled to pursue legal action as its only remaining option.
The WCG explained that the Act allowed the national Minister of Finance to enforce strict, one-size-fits-all regulations across all state bodies.
It said that this infringed upon the constitutional rights of provincial and municipal governments to design procurement systems tailored to their own local circumstances.
Race rules also questioned
In its challenge, Solidarity raised concerns about the Act’s race requirements, which stipulated that an applicant would be disqualified from a tender process if the race criteria were not met.
Solidarity referred to these requirements as the government’s internal “race rules,” which guide state bodies in using race when distributing public funds.
The Act established national preferential procurement rules, including mandatory “set-aside” provisions.
These set-asides earmarked certain procurement contracts exclusively for designated categories, rather than permitting open bidding.
The WCG argued that mandatory quotas are not needed, as 57.15% of its procurement spending already supports black-owned businesses without set-asides or forced subcontracting.
Solidarity argued that when the state commissions, for example, the construction of a road, it should decide who can do the work best and provide the best value, rather than basing the decision on the provider’s race.
Since the Constitutional Court deemed the Act unconstitutional, race requirements can no longer be used to immediately exclude bidders from state tenders.
“For decades, the government has seen to it that race has become ever more deeply embedded in virtually every corner of the economy. Today, yet another important card in that house of cards has fallen,” said Solidarity Deputy Chief Executive Anton van der Bijl.
Cape Town Mayor Geordin Hill-Lewis said that the Public Procurement Act would slow down local service delivery and undermine the constitutional autonomy of local government.
“This Act would have slowed down local service delivery and infrastructure investment, making it much harder for municipalities to procure quickly for urgent local needs,” said Hill-Lewis.
He explained that municipalities must be able to act swiftly to resolve urgent water, sanitation, electrical, waste, and environmental issues.
“That’s why we’re relieved at the striking down of this Act, which avoids a massive new red tape burden on Cape Town’s critical basic infrastructure investments.”
Hill-Lewis explained that Cape Town’s infrastructure investments amounted to R12.2 billion in the last year, with 75% directly benefitting lower-income households.
Loading ...