Public Procurement Bill: National Treasury response to public submissions & stakeholder input

Meeting report

The Chairperson remarked that National Treasury (NT) would be responding to the oral comments made in the public hearings and the written submissions received from stakeholders and Members of the Committee. The Committee received and distributed the comprehensive response from National Treasury on issues raised by stakeholders. The Bill is crucial for the people of South Africa.

National Treasury response
Ms Mendo Ntswahlana, Chief Procurement Officer, NT, apologised for the absence of the Director-General who might be joining the meeting later. The presentation included the preferential procurement framework as outlined in Chapter 4 of the Bill.

Mr Willie Mathebula, Chief Director: Supply Chain Management Policy and Legal, NT, presented. National Treasury’s response emanated from the public hearings that were conducted on 12 and 13 September 2023. A large number of submissions were received. National Treasury tried to respond to as many submissions possible, given the time limitations. A comment matrix was compiled and some of the issues were summarised in a report, including Chapter 4, which would be separately presented. A list of all the stakeholders was also compiled and included in the pack of documents that were sent to the Committee Secretary the previous day. He apologised for the late submission of the documents.

The submissions were assessed based on the Constitution and government policy objectives. Certain amendments were made for the consideration of the Committee. The overarching themes emanating from the submissions involved changes to the following key aspects:

Chapter 1 Definitions
Immediate family member was redefined to mean, the spouse, civil partner, children and stepchildren, and parents and siblings.

Transformation was included in clause 1 to mean, the process of change that seeks to redress the imbalances of the past, including the achievement of socioeconomic objectives.

Value-for-money was removed from clause 1 and replaced with the efficient, effective, and economic use of resources in clause 2 of the Bill to retain consistency between the Bill and section 195 of the Constitution.

Chapter 2 Public Procurement Office, Provincial Treasuries, and Procuring Institutions
Stakeholders raised concerns about the location and independence of the PPO within National Treasury. No solution is offered other than it is provided for in the Bill.

Chapter 3 Procurement Integrity, Prohibition of certain Practices and Debarment
Amendments to the Protected Disclosures Act were proposed to enhance the provisions for the protection of whistleblowers.

A proposal was made to avoid automatic exclusion of leaders of political parties and family members.

An amendment to clause 16(1) was proposed to authorise procuring institutions to take responsibility for debarment and the PPO to retain the register.

Chapter 4 Preferential Procurement
Stakeholders argued that Chapter 4 does not represent the framework envisaged in section 217(3) of the Constitution. National Treasury is of the view that Parliament should determine the level of discretion it affords to organs of state to develop their own policies or depart from national policy.

Chapter 5 General Procurement Requirements
Stakeholders wanted the Bill to be extended to the private sector and not to be limited to the public sector. A separate, detailed framework has been suggested that should be discussed separately.

Chapter 6 Dispute Resolution
Concerns were raised about the independence and impartiality of the Tribunal. National Treasury proposed that internal dispute resolution mechanisms should first be exhausted to expedite the process.

Mr Mathebula said he would await guidance from the Chairperson on how to deal with Chapter 4 in the Bill, i.e. the chapter on preferential procurement.

The Chairperson requested Mr Mathebula to summarise Chapter 4 to have it on record that stakeholders were briefed. The matter should not be dealt with under a veil of secrecy.

Mr Mathebula, started reading Chapter 4 from a document in his possession but was interrupted and requested to present the document that he was reading from for the benefit of Members.

Mr M Manyi (EFF) proposed that the Committee adopt the proposal by National Treasury to have a separate presentation on Chapter 4 because it was too complex and Mr Mathebula was having a challenge in presenting the document. He suggested that the matter be dealt with in the following week to allow the Bill to be properly processed.

Mr G Masualle (ANC) said it would be in the best interest of the stakeholders who are part of this session to work through Chapter 4. The stakeholders should be allowed the opportunity to comment on the information shared in this session.
           
The Chairperson agreed that the official should summarise Chapter 4 vocally for the benefit of the stakeholders and the public because it was a crucial chapter. He understood Mr Manyi’s concern but it should be on record that National Treasury responded to issues raised by stakeholders.

Mr Manyi said he understood that National Treasury wanted to have a proper discussion on Chapter 4 because it was so complex. He proposed that Chapter 4 should be left as Part B of the discussion for a later date. Dealing with the information at this stage would not do justice to Chapter 4. Stakeholders should be invited to participate in Part B of the discussion. It would not be correct to force National Treasury to work through the information if they are not prepared.

The Chairperson said in terms of the rules, the parliamentary process needed to be adhered to. National Treasury was responding to issues raised by stakeholders and the Committee. This was the correct platform to cover all the issues. Members should have an understanding of what is contained in the documents because it had been distributed earlier. He called on the official to briefly summarise the information and allow stakeholders and Members to comment.

Mr Mathebula said clause 18 of the framework deals with set-asides for preferential procurement. Procuring institutions may set aside a bid to accommodate categories of people listed in subsection (3) according to the prescribed thresholds and conditions. A provision is also made for subcontracting. Clause 19 regulates pre-qualification criteria for preferential procurement. Clause 22 deals with the designation of sectors for local production. The intention is to confer the powers to the relevant Minister in cooperation with the Minister of Finance. Clause 23 provides for measures for sustainable development and clause 24 provides for contracting conditions. The Chapter provides for beneficiation measures and innovation, job creation and labour absorption, and the development of small enterprises within particular geographical areas.

(See Presentation)

Civil society response
The Chairperson allowed each participant two minutes to comment. He requested that they focus on critical issues and not feel prejudiced when he stopped them after the two minutes had been exhausted.

Prof Annamaria La Chimia, from the African Procurement Law Unit (APLU), was pleased that explicit preference has been given to women in Chapter 4. However, she was disappointed that no specific mention was made of the possibility of collecting gender-specific data in clause 25. This opportunity should not be missed. The Bill should make reference to it. It was important the Bill signals that the composition of the Tribunal for Dispute Resolution should be representative of society or it has to be diverse. She asked if there were any plans to address these two issues. She did not note any mention of violence against women in the Bill and said the clause on due diligence should have made reference to violence against women. She wanted to know if further opportunity would be granted to consider the revised amendments.

Ms Elizabeth Jansen van Rensburg, representing the Mining Equipment Manufacturers of South Africa (MEMSA), said due to time constraints MEMSA might follow up with a written response. The redraft of Chapter 4 is a key concern. The inclusion of the designation for local content as an instrument is welcomed. It will have a positive impact on local manufacturing and thereby create employment. MEMSA was concerned that host industries might lose market share if the existing designations under the PPPF were not kept in place. She asked that existing designations should be retained because it would impact the entire supply chain. She noted that the number of local manufacturers is limited to three. She proposed that two local manufacturers might be sufficient for specialised categories of equipment because the local market would only sustain two manufacturers. For example, MEMSA had gone through a long process for the designation of two local manufacturers of yellow metal equipment which required vast research. Such designations are always subject to review and could be withdrawn if found to be leading to a monopoly situation. She sought clarity on some of the wording in clause 22, e.g. locally produced goods versus locally manufactured goods. The pre-qualification criteria in clause 19 where one or more need to apply, e.g. a percentage to a small enterprise with a specific ownership structure, creates an opportunity for abuse of the procurement process. Chapter 6 compels aggrieved parties to exhaust internal processes with the aim of expediting the process. It is noted that internal processes could be lengthy or be subjected to corruption. She sought clarity on what is meant by exhausting internal processes and asked for time limits to expedite the process.

Mr Stephen Woodhall, from the RSA Cluster Group, was interested in the announcement about other different evaluations from 60/40 up to 90/10. It was important to keep matters as simple as possible and come up with mechanisms without getting into too complex detail because of the rules. He recommended different ways of doing evaluations, e.g. by taking the profit portion out of local procurement discussions and considering the real value add portions. This would give the ability to get back to basics and make sure what is needed for a particular purchase. The socioeconomic reference in Chapter 4 should provide for the development of all kinds of businesses to ensure that South Africa is competitive. It does not work to load pricing to accommodate previously disadvantaged businesses. Businesses are selling into global markets but companies are constrained by having to meet many hurdles despite the competitive markets that they are serving. The assessment should focus on quality and price. Performance might be a key issue in some instances but this would require a discussion. The existing process is disabled due to deviations outside the system. Alternative opportunities might be considered to give an evaluation of the type of companies that need to be accommodated and allow industries to do a self-evaluation of companies that they could work with. Supplier development is becoming vital and is equally important in state-owned companies as in small businesses because it would not work if jobs were given to companies that do not have the capabilities.

Adv Ntshiluba said she needed more time to dissect the information provided to give an educated opinion. She was concerned about clause 3(a) in Chapter 4 read together with the clause on pre-qualification because it might exclude Military Veterans. She urged that Military Veterans be included in the designated groups. She suggested that strategic issues should be lifted above technical issues. It is not helpful to have capabilities that belong to three Ministries and only one is consulted. She suggested that all three Ministries must be consulted, e.g. as in the case of the Military Veterans Act with various provisions across different sectors. She was concerned that the ICT system, which contains sensitive information, is being used as a one-stop shop but it did not receive particular attention in the Bill. She requested more time to provide an educated opinion.

Dr Ncedo Mkondweni, Technologist at MBSA Consulting, was concerned about the set aside clause which stipulates that procuring institutions ‘may’ set aside a bid to accommodate categories of previously disadvantaged people. The wording should change to ‘must’ instead of ‘may’. The functionality in the previous legislation makes provision for bids to not be unreasonably restrictive. He noted that it does not appear in the Bill and was concerned that some state agencies might use the functionality for gatekeeping. He asked for functionality to be defined and included in the Bill because it was protecting the abuse of functionality for gatekeeping as a gatekeeping tool for service providers. Complimentary goals were introduced but it is unclear how the goals are to be determined. He welcomed the definition of transformation and the redefinition of value-for-money requirements.

Mr Simon Eppel, the COSATU representative, said the time was not enough to make meaningful comments. Written comments will be provided in the following week. He noted that only 20% of stakeholder comments had been considered to date which raised concerns about the integrity of the process and the extent to which stakeholder participation is being considered. The addition of the local content designation in clause 22 is welcomed. However, it is unclear how it would work in practice because it was still not a pre-qualification criterion. He stated that it must be a pre-qualification criterion and it must apply to all contracts. He supported MEMSA’s insights that in some instances it might be useful to have fewer than three competitors in the market. For example, it would not have been possible to have vaccines during COVID-19 under these rules because we only had one manufacturer. Although the intention is clear about competition, it is not practical in all instances. COSATU was concerned about the watering down of the clause on political interference and the removal of politically exposed people. Clause 14 no longer empowers officials to refuse instructions that are inconsistent with legislation. He noted there is still no national disclosure mechanism in the Bill to expose politically connected people in the tender market. It is a challenge that the Bill still does not contain whistleblower provisions. It is unclear where the responsibility for procurement development lies. Some of the changes are weakening the centralised powers of the public procurement office (PPO) to intervene and overturn bad tenders. The decentralisation of the allocation of debarment powers is a major concern.

Prof Ron Grace, from the National Research Foundation (NRF), said National Treasury had not received their submission because it was excluded from what had been provided. The few hours that were granted to comment on the responses from National Treasury were highly inadequate. He would comment on issues from memory but would need an additional two minutes later in the programme to comment on other issues. He suggested that innovation be elevated to a preference category which had been ignored in the high-level presentation of National Treasury. In the scope of what constitutes procurement, National Treasury did not consider the NRF’s recommendation that asset and contract management be excluded from the scope and that it should be changed in line with international practices. The major section on checks and balances had been ignored. A number of substantial recommendations were made. Critical definitions are missing from the Bill while others are defective, e.g. the definition of innovation is excluded and the definition of strategic procurement is fundamentally flawed and out of line with normal or academic practice. It needs to be in line with a standard definition. The recommendation to consider the Kenya Model has not been addressed. Emergencies had not been removed as recommended. Deviations should be done by the appropriate organ of state. He proposed that National Treasury formally acknowledge receipt of the written 60-page presentation and respond to each of the points made. He requested the right to respond to National Treasury comments and to submit it to Parliament. He requested a clarification of the process to provide written submissions at a later stage.

Ms Caroline James, representing Amabhungane, echoed previous comments about having only two minutes to respond and receiving the documents late. It places difficulty on stakeholders to respond meaningfully. She asked for an opportunity to submit a written submission and analyse the feedback from National Treasury to examine how the information had been incorporated. She appreciated that Amabhungane’s submission had been incorporated in National Treasury’s response document but comments from other stakeholders had not been considered. She was concerned that only about 20% of submissions had been considered because it raised concerns about whether the process had been meaningfully followed. The proposal of having the information set up in regulation mode had been partly considered but public participation in drafting regulations, as set out in various transparency measures, does not seem to be enshrined in the Bill. The recognition of transparency around the drafting of regulations is welcomed but it should be formally included in the Bill. It is concerning that the weaknesses highlighted in the Bill had been further weakened, e.g. the exclusion of the automatically excluded people and other measures to ensure that the system is strongly able to respond to corruption.

Ms Motlatsi Komote, representing Corruption Watch, said the time was not sufficient to engage with the proposals and responses from National Treasury. She requested an opportunity to make a written submission. She raised concerns about the centralisation of power to National Treasury because it creates a gap in effective checks and balances. The position of the PPO within National Treasury is of concern as it affects independence and the ability for impartial oversight. The dispute resolution mechanisms should be tightened. It is reported that National Treasury did not have time to consider all of the 112 submissions made. She sought clarity on the process to engage with the rest of the submissions. She called for the automatic exclusion of politically exposed persons. The absence of this mechanism was undermining transparency, accountability, and anti-corruption.  A decisive decision about automatic exclusions must be made.

Mr Gabriel Crouse, representing the South African Institute of Race Relations (SAIRR), requested an opportunity to make a written submission given the time constraints. The connection between the existing procurement framework and state capture as articulated by the Zondo Commission appeared not to have been recognised. The kind of preferential procurement fixated on race contributed to ambiguity and confusion and the inability to account for and therefore, incentivise rent-seeking. This is not being addressed. He noted with great alarm the 70/30 and 60/40 price compromise, increasing the premium for non-value-added considerations. Chapter 4 was going in the wrong direction. He noted the provision that the Bill has no power to consider any instance of procurement. But the power does exist in the term equitable distribution. The Constitution refers to equitable distribution across provinces and does not mention race. Non-racialism and value-add are being violated. This is a scheme whereby the rich get richer while poor South Africans of all races are left behind. No reference is made about how much preferential procurement has already cost the fiscus and how much it is expected to cost under the new dispensation which would render it procedurally unworkable in terms of Constitutional requirements for transparency. There is also no mention of how much the extra BBBEE premium would amount to which is a violation of transparency as stipulated in section 216 of the Constitution. Given the lack of transparency, it is not surprising that money goes missing.

The Chairperson noted the DG had joined the meeting and called on him to comment.

Dr Duncan Pieterse, DG, NT, replied that he had been following the proceedings closely and would consult with the team on taking matters forward. He had another meeting to attend and asked to be excused.

The Chairperson said the team would advise the DG on what had been agreed upon in terms of processing the Bill.

Ms Nicqui Galaktiou, from the International Women’s Forum of South Africa (IWFSA), supported the other organisations in terms of the time afforded to consider the documents and the need to make further written comments on what National Treasury had provided. The IWFSA focuses on women’s involvement in black-owned businesses. She did not believe that their submission had been considered nor was the amendment to clause 18 of Chapter 4 sufficiently explained. The review team did not agree that the provision for preferential procurement was not discretionary. This was not dealing with the fact that black women-owned businesses continue to remain an option in terms of the wording in clause 18. Nothing had been done about the commitment made by the President to set aside 40% of procurement for women-owned businesses in a bid to achieve equality. Clause 18 in its current form does not mean that a percentage would be given to black women-owned businesses which meant that the IWFSA submission had been completely ignored. More time was needed to discuss the failure to give the required attention to all submissions.

Ms Motlatsi Komote, representing the Budget Justice Coalition (BJC), noted the risk of the PPO being undermined by pure provision of shared services. The Zondo Commission made recommendations about the need for independence and specialised oversight mechanisms. This critical part was still missing from the Bill. She found it problematic that provisions that should have been incorporated in the draft Bill are being left to regulations. Some definitions require further clarification to avoid any misinterpretation. Matters of conflict of interest must be decisively dealt with. If not, it would deepen the lack of transparency and the high levels of corruption. She requested the opportunity to make further written submissions.

Mr Dumisani Mphafa, of the Black Business Council (BBC), welcomed the changes to Chapter 4. Although some of the changes were not satisfactory, the framework is in place and the provisions are much more progressive. The provision of complimentary goals should be clearly defined to avoid any ambiguity. The BBC was satisfied with the preference point system and saw no need to change the terminology. The word ‘may’ in clause 18 was problematic from the perspective of the BBC due to the experience with procuring institutions that would be reluctant to comply if it remains an option. The onus should be on the procuring institution to demonstrate where the set aside is not feasible. The Bill lacks strategic intent in terms of driving the socioeconomic objective in the country, especially regarding industrialisation. The government does not appear to be using its fiscal power to enforce industrialisation. The procurement officer should be able to publish procurement reports in the interest of transparency, for example, to indicate the BEE and set aside spending. Where the principles of procurement spending are not complied with, procurement officers must be able to implement measures to correct the misapplication of the law. He would appreciate the opportunity to make further submissions.

Prof Geo Quinot, on behalf of the APLU, echoed the previous comments that the time given since National Treasury provided the responses was inadequate specifically with reference to the Constitutional Court judgment on public participation in legislative processes. Parliament should give due consideration to the parameters within which consultation must take place. He urged the Committee to provide further opportunity to consider the feedback. The APLU was extremely concerned that, based on the documents provided, selective attention was paid to a small number of submissions. National Treasury did not comment on the APLU submission which was raising concerns that it had not been considered. Far too much is being left to regulation. He urged the Committee and Parliament to seriously consider the role of the executive in the law-making process. It was inadequate to allow the executive broad decision-making powers by way of regulation within the parameters of this Bill. He addressed the empowerment dimension of Chapter 4 as set out in clauses 17 to 21. The APLU noted with great alarm that these provisions were a cut-and-paste of the PPPFA provisions which prompted the law revision that the Committee is currently engaged in. The inadequacy of those rules necessitated the review of the Bill. This would result in a repeat of the struggles of the past 23 years and the many court cases that undermined the use of procurement for empowerment purposes. He had serious concerns about whether Chapter 4 could be viewed as a framework. Many of the provisions could be described as a set of rules. It is unclear how the different mechanisms would work in practice. The difference between a set aside in section 18 and pre-qualification in section 19 is unclear. Both result in the preservation of a contract for a particular category of people. It is also unclear whether the preferences in section 20 are mandatory or optional. The structure and system of subcontracting in section 21 is unclear. In terms of the methodology, using price as the only criterion is problematic. It has been documented worldwide that using price to award tenders is a very bad idea because it will not result in value-for-money. He urged the Committee to allow stakeholders adequate opportunity to respond to the comments.

Adv Lufuno Khorommbi represented Orizur Consulting Enterprises (OCE) which specialises in cyber law, ICT security, and public sector ICT procurement. She believed there should be a second draft of the Bill to ensure completeness and consideration of the written input provided. The Bill does not indicate how it would integrate the fragmented regulatory framework. She proposed that the Bill must provide for methodologies and strategies for managing subcontracting to ensure that it is not a paper exercise but a reality. A further proposal is made to include a subsection that would guard against piracy and provide guidelines to this effect. Most small businesses in the ICT space, experience challenges and do not get access to the 30% set aside provided for in the Bill. In terms of designation, the term ‘may’ suggests an optional exercise. There must be an intention to develop own content and prioritise localisation. The Bill does not sufficiently address the issues of innovation and development in the manner that it is understood in the industry. Information from the perspective of OCE would be submitted in writing. The organisation had developed a system but is unable to bring it to the government due to the lack of support for innovation. The Bill does not provide equal economic inclusion to progress from a paper-based exercise to a space where economic inclusion is promoted.

Mr Francis Chemaly, on behalf of the Group of Construction and Engineering, expressed the same concerns about time constraints as previous participants. He agreed that far too much is left to regulation. Projects of size and scale require uniformity and predictability in the market. The market is capital intensive and the lack of predictability would scare investors and the industry would decay further until all infrastructure is built by foreigners. Sections 19 to 21 of Chapter 4 appear to be confusing and need more time to be fully understood. The present draft is inadequate to serve as a solid foundation to grow the economy.

Ms Phelisa Nkomo said her organisation wanted to make sure that the Bill impacts transformation as intended. She argued that the Bill is not gender-responsive because it does not recognise the 40% set aside that the President had announced. Economic transformation has to be driven by government and public procurement is an important lever to drive economic transformation. Her organisation supports the practice notes that are issued by National Treasury but it should be subjected to public participation as it is sometimes autocratic. She is concerned about the silence on the issue of whistleblowing considering the experience of the Zondo Commission and the nature of corruption. The use of price as the only criterion to approve any business opportunity is fundamentally flawed. South Africa had declined to 19% of industrial capacity, meaning that so many things are being imported. The issue of assembly versus manufacturing needs clarification. Manufacturing needs to be prioritised because it is unsustainable to be an assembly economy. The issue of gender-based violence should be classified to afford women, who have been subjected to violence, the opportunity to benefit from the set aside provision. Any public procurement policy that applies a one-size-fits-all criterion, is problematic. The Bill needs to create space for municipalities to participate in local procurement activities. The local procurement policies must be used to build local resilient economies and government is a critical partner in this regard.

Ms Mahadi Buthelezi, represented the Women’s Economic Assembly (WEA), which was birthed from the NSP. She concurred with Ms Nkomo that the 40% procurement is not clear in the Bill. It is important that the Bill clearly specifies previously disadvantaged persons. She did not notice any mention in the Bill about persons living with disabilities and would want it to be included in the Bill.

Discussion      
Ms M Mabiletsa (ANC) said the concept of small enterprises owned by black women should be defined. Businesses that continue to grow should not be considered small enterprises. Most subcontracting companies are owned by women, but this was not mentioned in the presentation. She asked if consideration would be given to Military Veterans who are entrepreneurs.

Mr G Masualle found it worrisome that only 20% of the public submissions had been responded to. He sought clarity on how responses to the remaining submissions would be remedied. He was concerned that allowing voices to be ignored could place doubt on the legitimacy of the process. He agreed that the Committee should allow for reflection on Chapter 4.

Mr J De Villiers (DA) said the idea of public participation is to allow everyone a fair chance of a response to their submissions. The time being granted to stakeholders was not complying with the public participation standard. To ensure transparency, National Treasury should respond to all submissions.

Mr Manyi thanked stakeholders for prioritising the opportunity to observe how their submissions are being dealt with. He suggested that stakeholders were being short-changed and should be allowed another round for feedback. He sympathised with the women’s group that took the President seriously about the 40% participation for women-owned businesses and said the women were conned by the President. He should have issued a directive to National Treasury if he was serious about the matter. It was unfair to expect National Treasury to respond to public utterances. He stated that the definition of transformation in the presentation omitted important issues of demographic representation as stipulated in the Constitution, i.e. the judiciary, Chapter 9 institutions, and public administration should be broadly representative of all South Africans. National Treasury was missing the point by focusing on price as a major consideration. He suggested that the value-for-money proposition must be removed. The Bill was referring to further regulations although stakeholders had made it clear that more regulations were not what was needed because it resulted in matters being postponed. Businesses that did not embrace transformation should not be allowed to do business with the state, which was consistent with existing legislation. Procurement regulations should be dealing with both the public and private sectors. National Treasury did not have the competence to interpret the law and the Constitution, and their interpretation was not binding. The matter should be taken to court for proper interpretation. The Construction Industry Development Board (CIDB) was not creating uniformity and should not be allowed to continue operating in its current form. The purpose of Chapter 4 is to advance transformation. He agreed that the word ‘may’ in section 18(1) should be replaced with ‘must’. He found the formulation in section 19 (1) about the minimum level of compliance problematic. Businesses should not be allowed to continue doing things that are inconsistent with legislation. He regarded the preferential point system as an introduction of the PPPFA through the backdoor. He suggested that Prof Quinot could assist with the proper formulation of the provisions.

The Chairperson said the women’s organisations were representing their constituencies and their submissions should be respected. He called on Mr Manyi to apologise for stating that women have been conned by the President because it was undermining the input of women.

Mr Manyi replied that it must be on record that the President lied when he said 40% women representation would happen. The women took his word and had high hopes. This was the truth and not political correctness.

The Chairperson disagreed and said Mr Manyi was undermining the intelligence of women. Mr Manyi was asked to reflect on his statements.

Mr G Skosana (ANC) said the Bill was long overdue and had been in the making for a long time in the Sixth Parliament. He urged National Treasury to provide the means for considering all submissions. Chapter 4 sought to remedy some defects and concerns raised by some stakeholders. The Bill deals with the prevention of corruption and the aspect of transformation. It was the responsibility of the Committee to ensure that these two goals were met. It was unfortunate that the country was still dealing with the challenges of an unequal society. Everyone should be able to opportunities that they deserve. He welcomed that set asides for preferential procurement for specific categories of persons. He proposed that section 18 of Chapter 4 must be reviewed to strengthen the wording to ensure enforceability and that previously disadvantaged people benefit from the provisions. The Bill should be explicit on transformation. The value-for-money provision and transformation should not be mutually exclusive. He did not see the need to remove it from the Bill. The Bill was silent on consequence management for non-adherence to the expectations of the Bill. The Bill should be explicit on the actions that would be imposed against non-complying institutions. It was important that the private sector is also regulated in terms of procurement, but the matter should be dealt with separately. This Bill should be passed before the end of this term therefore the processes to conclude this Bill should proceed.

Ms P Abraham (ANC) appreciated the wisdom of the input from stakeholders. It was critical to understand that when the President has spoken, the task lies with the Department to interpret his statements. The processing of the Bill is allowing the stakeholders the opportunity to hold the Department to account. National Treasury must ensure that what the President had outlined, finds interpretation in legislation. Efforts to ensure transformation should be deliberate. The transformation of the economy will be the legacy of this Bill. She appreciated the serious efforts of the government and the President in placing women and previously disadvantaged people at the centre of economic activity. She drew attention to a proposal by one of the stakeholders for a workshop to be arranged to ensure that everyone was on the same page about the steps that would guarantee that transformation takes place. The redrafting of Chapter 4 was critical to outline how procurement should be dealt with at the local government level.

National Treasury response
Mr Mathebula welcomed the comments from the stakeholders and Members. Due to time constraints, it was not possible to thoroughly respond to all the submissions. He sought guidance from the Committee on how to complete the responses to the remaining submissions. He called on the stakeholders to consult the comment matrix before following up with National Treasury. He undertook to relook the gaps in the legislation as pointed out by the stakeholders and the Committee.

Adv Empie van Schoor, Chief Director: Legislation, NT, agreed that all submissions should be considered. She asked how much time would be allowed to consider the remaining submissions.

Ms Ntswahlana, said it was important for stakeholders to view the comment matrix provided. The value-for-money provision is focused on obtaining the best possible outcome for procurement activities. But National Treasury would be unpacking the provision once more and consider the efficient, effective, and economic use of resources. The process will become more strategic and outcome-orientated. The Committee will be updated in the next session. She took note of the proposed transformation workshop and sought guidance from the Committee in this regard.

Chairperson’s closing remarks
The Chairperson thanked Members for their clarity-seeking questions and stakeholders for their constructive input. He proposed that a special meeting with National Treasury should be scheduled for Friday, 24 November 2023, to deal with outstanding issues. He asked stakeholders to bear in mind that the government will not agree 100% with the submissions. National Treasury would consider the submissions and Parliament would process the Bill. The Committee will be considering the Bill on a clause-by-clause basis from 28 to 29 November 2023, the report will thereafter be adopted and then tabled in Parliament.

The meeting was adjourned.