Public Procurement Bill: Civil Society concerns & constitutional matters

Meeting report

The Chairperson welcomed all those who were present in the meeting. Thereafter, he asked if the Committee received any apologies.

Mr Nkululeko Mangweni (Committee Secretary) indicated that no apologies were tabled.

The Chairperson also welcomed the chairpersons of the provinces and reminded them that the Committee would need to process their negotiating mandates the following Tuesday. Thus far, seven of the nine provinces have submitted their negotiating mandates, which have been received by the department.

He told the Committee that he had informed the department the previous night that there was still some work to do on the Bill. Nonetheless, he was confident that the department had enough officials at its disposal to resolve all of the problems raised about the Bill.

In addition, he reminded Members that the Committee received a letter from civil society organisations last Friday, and it was being processed. He predicted that the Committee would provide a response within ten days.

After making those brief remarks, he outlined that the Parliamentary Legal Advisor (PLA) would take Members through the various constitutional issues raised by stakeholders. Subsequently, the Committee would be taken through the statistics on the progress of black economic empowerment policy thus far and then deliberate on what it believed should be done regarding the Bill.

Briefing by the PLA on the Constitutional issues raised by civil society organisations in their letter to the Committee

Adv Frank Jenkins (Senior Parliamentary Legal Advisor) indicated that he would deal with the contents of the letter and the constitutional matters concurrently.

The letter contained concerns about the Bill’s public participation process, including the alleged limited time for stakeholders to make submissions.

During separate discussions, the department informed him that it had looked at all the issues in the submissions but did not have time to address each one.

In the letter, the civil society organisations mentioned that they have actively engaged in the preparation of the Bill and set out the level of participation in the National Assembly (NA) and National Council of Provinces (NCOP). Due to this, concerns were raised in the letter regarding whether the Bill would pass the constitutionality test.

He explained that in case law, Parliament is required to act reasonably. To do so, it must create reasonable opportunities for persons to participate meaningfully or effectively in Parliament to the point that they can influence the decisions of the Committee and eventually those of the NA or NCOP.

This test has been applied several times. For instance, in the Doctors for Life Case, Parliament was found to have failed the test because it was seen not to have reached out enough to the public; insufficient time was given to stakeholders; no transport was provided to public meetings, and no translations were given.

In evaluating such a matter, the court will usually look into two factors. One is if a meaningful opportunity was created for the public to participate. This would entail whether people had access to the venue and if they had advance notice. Two, whether they were able to participate effectively in the process. In the Doctors for Life case, the court looked at whether the translation of the legislation was in a language people in the area could understand, and if there were notices given for them to understand the broad aspects of the legislation.

Another area where Parliament can fall foul of the Constitutional test is where it provides no opportunity for the public to participate. There are only two such instances. One was when the South African Veterinary Judgement found that the Veterinary Association never had an opportunity to comment on the Drugs and Controlled Substances Amendment Bill. Two was the South African Iron and Steel Institute Amendment judgement, which found that certain amendments were made at the last minute with no opportunity for stakeholders to participate.

Based on this test, he advised the Committee that it was unlikely that the public participation process in the Bill would fall foul of the test of no translations being provided. Moreover, stakeholders were provided an opportunity to comment on it.

He disputed the claim by the organisations that the interactions on the Bill had been between them and the department, and not with the Committee, as the process had been conducted in Parliament. The Committee is empowered, in terms of the rules, to follow its own process of looking into legislation and to give effect to the House. In dealing with the mandate from the House to consider the Bill, the Committee could decide on its own procedure, which it has done to facilitate and engage between the department and stakeholders. No one had been excluded from this process.

Given this, he did not believe that the complaints were applicable.

Then he addressed the constitutional attack by civil society organisations concerning Chapter 4 of the Bill, which they argue is vague and does not give effect to Section 217 of the Constitution, nor does it embody or explain the constitutional principles.

Another issue raised was whether Chapter 4, read with the Bill, gave enough clarity on who should initiate the process of developing the policy and then implementing it because it only speaks to implementation. In his opinion, Chapter 4 should be read within the context of the Bill and other legislation already in the statute book and the Constitution. This meant that the constitutional principles in Section 217 would continue to apply, and everything in the Bill would be tested against those.

At the moment, Chapter 4, he felt, should be read in conjunction with Section 38 of the Public Finance Management Act (PFMA), which requires that the accounting officers of government departments and constitutional institutions ensure that there is a system of procurement, and that it is maintained, that complies both with the constitutional principles as well as the Preferential Procurement Policy Framework Act (PPPFA). In the case of Parliament, the Financial Management of Parliament and Provincial Legislatures Act (FMPPA) empowers the accounting officer of Parliament to prepare regulations, which must then be issued by the executive authority of Parliament.

Chapter 4 is complained about for not providing clear guidelines on who must initiate the process of developing a policy. However, read together with the PFMA and FMPPA, this becomes clearer. He has been advised that the department is working on new wording to clarify this in the PFMA.

Chapter 4 will be critical for institutions like Parliament and provincial legislatures. The Bill sought to repeal the entire PPPFA, meaning a new framework must be crafted, per Section 217 (3) of the Constitution. The department will propose amendments to Chapter 4 and the Bill to the Committee for consideration and adoption.

Touching on the civil society organisations requesting to see the final text of the Bill, he assured them that this would be provided at a later stage, but he believed that this decision should ultimately be left up to the department. There will be public consultations before the finalisation of the Bill, and Parliament will be given the opportunity to scrutinise the regulations, which may or may not entail further consultation.

Stakeholders also stated that so much had been left to the regulations that it was unclear whether the Bill was constitutional. As it is, the Bill would be tested against the Constitution, specifically Sections 7, 9, 36, 195 and 217. The regulations will flow from that, and as per the Afribusiness case, they will have to comply with the empowering provisions and Act once passed.

He advised that the regulations should be seen as separate and should not be seen to place doubt on the constitutionality of the Bill. Neither could the argument raised about the funding of the Bill cast doubt on its constitutionality.

Usually, once legislation is passed, the department implements it—how it does so is set out within its annual and strategic performance plans. This is then translated into a budget request to the NT. He added that any amendments made by the NCOP will still have to be referred back to the NA.

Regarding the suggestion of a workshop and further discussions in the National Economic Development and Labour Council (NEDLAC), he indicated that an amendment to the legislative process would be required for this.

On the concerns raised around preferential procurement, he mentioned that this was very important for the development of South Africa. Section 195 of the Constitution, he highlighted, spoke to the need to create economic prosperity and sustainable development in the country. Moreover, Sections 7 and 9 deal with implementing the right to equality, which holds a substantive perspective on redress. This means that redistributive action may be implemented to correct the imbalances of the past. Therefore, set-asides, as proposed in the Bill, that seek to deal with past imbalances do not limit anyone’s rights; as such, Section 36 of the Constitution did not need to be referred to.

If set-asides on women, youth and people with disabilities, and what products should be manufactured in the country are challenged, it will have to be shown that there is a legitimate governmental objective to resolve that. There is a threshold which connects the measure applied and the goal that is to be achieved, he explained.

The Chairperson indicated that many of the issues raised by the PLA were contained in the narrative report circulated to Members. He proposed that the Committee respond to some of the issues raised in the letter in general terms.

He then opened the floor discussion.

Discussion

Mr F Du Toit (FF+, North West) thanked the PLA for the thorough presentation.

He asked if there were any criteria on how the government would determine when and how past injustices would be addressed sufficiently. Also, he asked if the Bill contained a sunset clause.

It was well known, he argued, that B-BBEE and other preferential legislation has only benefited an elite owing their allegiance to the ruling party.

In his view, preferential legislation would not produce the desired outcomes, and he asked when it should be expected for B-BBEE and affirmative action to be removed from the Constitution to provide every citizen economic opportunities on an equal basis, as black Africans were not the only segment of society that was experiencing poverty and hunger. The legislation, he felt, was discriminatory to other racial groups.

Mr D Ryder (DA, Gauteng) also thanked the PLA for its submission to the Committee. He highlighted that he received the letter this morning and not last week.

The Chairperson pointed out that the letter was sent to all Members shortly after the Friday meeting concluded.

Mr Mangweni confirmed that the letter was sent to all Members on Friday.

Mr Ryder said that concerns were raised about the number of changes made between the A-List and B-Version of the Bill and the impact this had had on its content and thrust. Nevertheless, he was left pleased by the NCOP’s processing of the Bill thus far, which has allowed ample public engagement.

Having to unpack the amendments brought about at the end of the NA process in two months has left stakeholders behind the curve. He agreed that too many issues were left to the regulations and that too much power would be given to the Minister. This, he thought, would create problems in the future.

While the process had been rushed, he believed that the Committee had conducted several meetings and engaged on all the issues raised by stakeholders. However, he felt that the engagements at the provincial level were not handled as well.

The Chairperson assured the stakeholders that they would receive a response from the Committee. He then outlined several inputs he had to make.

One, he felt that the civil society organisations had been unfair towards the Committee through their letter as it hosted public hearings, engaged with stakeholders during the meetings, and requested the department to provide responses. The Committee went even further, which it was not obliged to do, and advised that either they could meet with the department, engage further with them, or have consultations in NEDLAC.

The NT met from April 8th to 10th and presented a report to the Committee on what stakeholders had submitted and its responses to those submissions. The department, he stressed, had made more concessions than it had ever done before.

When it announced that it would bring the public hearing to closure, the Committee did not state that civil society organisations could not write to it posing further questions or making additional inputs on the Bill. To him, it seemed that, in this case, civil society had sought to co-govern and not assist Parliament in executing its fiduciary duties. This was incorrect as civil society was not united on the Bill, with some advocating for it and others disagreeing.

Second, he asked the department if the Bill had been debated in NEDLAC for six months.

Third, he asked the department if the Bill had been in the pipeline for the past ten years.

Fourth, he asked if the department had gazetted the Bill and allowed stakeholders to comment.

Fifth, he asked if the department had ever been requested by stakeholders to meet with them. To him, this seemed odd as Parliament had the final say on what amendments should be included in the Bill.

It was important, he emphasised that the Committee made changes to the Bill where it deemed necessary, given the criticism that the majority party has been subordinate to the executive.

He pointed out that the Committee had already said it would consider sending the Bill back to NEDLAC for further consultation.

He wondered if anyone believed the majority party was using the Bill as an electioneering tool.

While the Committee welcomed public input, from this point on, it will have to define the parameters within which submissions can be made on the Bill. This was the first time that he had encountered the tone and attitude expressed in the letter.

At this stage, the Committee could not determine whether to continue processing the Bill. Furthermore, he added, it was up to the courts to decide its constitutionality.

Mr Willie Mathebula (Chief Procurement Officer of the NT) confirmed that the Bill was before NEDLAC for six months, between April and October 2022. The heads of all social partners present, the department, business, and labour produced and signed a report, which was then presented to the Ministers of Labour and Finance.

Moreover, he confirmed that the Cabinet instructed the department in 2014 to initiate the Bill. After approval was granted to publish the bill for public comments, a further extension of the public comments was granted. The department received an excess of 4000 comments, which it duly considered.

The Chairperson asked the PLA if any of his comments had transgressed any norm of the public participation process or processing of legislation in terms of the rules of Parliament, or undermined the constitutional role of committees and public participation in particular.

Adv Jenkins said they had not, as the Committee had followed due process.

The Chairperson said that the Committee and PLA would draft a response letter to the civil society organisations in the next day or two. He asked if members from the majority party agreed with the proposal.

Ms D Mahlangu (ANC, Mpumalanga) supported the proposal.

The Chairperson highlighted that the Committee had not decided to complete the Bill and that there was still enough time to do so. Furthermore, he indicated that the letter would include a text of the Bill on which they could provide comments. He asked the PLA if it was compulsory for the Committee to do so.

Adv Jenkins explained that the Committee would have to return any proposed substantive amendments to the public.

The Chairperson asked the department how much economic empowerment and transformation had occurred in the country.

Mr Mathebula said that the department was still unpacking the statistics submitted on B-BBEE. Once it has, it will send a report to the Committee. If called upon, the department will appear before the Committee to present the report.

The Chairperson acceded to the request but asked if the department had to edit its presentation in light of the public submissions to the Bill.

Mr Mathebula confirmed that this was the case.

The Chairperson asked if the report could be presented on Thursday afternoon. Furthermore, in its presentation, he mentioned that the department only had to provide a broad overview of the statistics to Members.

Mr Mathebula responded that the department would try to be ready in time.

The Chairperson stressed that the department had to be ready by that time.

Mr Mathebula said that the department would be ready.

The Chairperson mentioned that the Committee would go through a policy document sent to it yesterday.

Mr Ryder asked if the planned meeting for tomorrow would still take place, as a number of Members were unavailable.

The Chairperson mentioned that the meeting could be possibly postponed to Friday.

Afterwards, he said that the Committee, in its report, could recommend that the 7th Administration of Parliament review the FMPPA to consider what is relevant in the Bill to Parliament. He asked the Joint Committee on Financial Management Chairperson if this could be done.

Ms Mahlangu stated that she would have to run the proposal with the Joint Committee on Financial Management, however, she did not feel there was any harm with the suggestion.

The Chairperson also suggested that the report state the Committee’s acknowledgement of the challenges raised around the Bill and that it viewed it as transitional. Further, he would like to suggest that the Bill be reviewed within the next 18 months, including being re-tabled in NEDLAC. He asked for Members' opinions.

Mr Ryder indicated that greater thought had to be put into the proposal.

The Chairperson asked if Members believed the department’s claim that the Bill had no financial implications.

Mr Ryder said he did not.

The Chairperson said the Committee's report would state that it is a matter of considerable concern that the Bill has not been costed by the department. It would also highlight the Committee’s belief that the department had serious capacity issues at the national level down to the local government to implement the Bill. Moreover, within eight weeks of establishing parliamentary committees, a report has to be given on the progress of the Bill and its implementation programme.

While he accepted that minor changes may have to be made to the Bill, he did not believe that it undermined the powers and privileges of provincial and local government.

Regarding how descriptive and discretionary the Bill should be, he noted that the department had made some concessions, which the Committee could debate. Parliament has the right to provide the norms and standards as well as the national framework, but this cannot undermine the Constitution's powers and functions.

Touching on the Public Procurement Office (PPO) 's location within the department, he felt that there was nothing wrong with this.

He also recommended that the report state that, given the complex constitutional issues the department’s legal advisors, state law advisors, and PLA raised, which the Committee itself could not come to a conclusion on, those who oppose the Bill can take it to the courts. He added that the debate on its constitutionality should be left to when the Committee goes through the clauses.

After those remarks, he briefly took the Committee through a document sent by the department.

Adv Empie Van Schoor (Chief Director: Legislation, NT) explained that because the Bill refers to the implementation of preferential procurement policy by a procuring institution in Chapter 4, the stakeholders wondered what the procuring institution's role would be and whether it was clear how to determine procurement policy, including preferential procurement policy. To resolve this, the department proposed inserting in the text that procuring institutions are responsible for developing and implementing preferential procurement policy.

Stakeholders also raised concerns that it should be made clear that a policy cannot be done without complying with Chapter 4, as stated in the Bill, that the role of the procuring institution is to develop and implement that policy in accordance with the Act and regulations. The extent of powers given to the Minister by the Chapter of the Bill to make gazette regulations.

The Chairperson wondered how the department did not note this issue before it was raised in the submissions, especially as it has been working on the Bill for ten years.

Adv Jenkins felt that the proposed change clarified the issue raised by the submission.

The Chairperson asked if the Joint Strategic Resource (JSR) was pleased with the proposed amendment.

Adv Van Schoor said she was unsure.

Mr Mathebula mentioned that despite the department’s proposal to include the term ‘develop’ in clause 16, the JSR still had misgivings with the text.

The Chairperson asked what the misgivings were.

Mr Mathebula said that the JSR did not believe that the word cured the problem raised.

The Chairperson asked what word was suggested in its place.

Mr Mathebula stated that no other was proposed.

The Chairperson indicated that the Committee was content with the word used. However, once the bill is sent, the JSR will be given another opportunity to comment on it.

He noted that the civil society organisations sought explicit inclusion of the constitutional principles in the Bill itself. He asked for more details on this from the department.

Adv Van Schoor explained that the submitters proposed that an interpretation clause be included in the Bill that would define the five principles found in Section 217 of the Constitution: equitable, transparent, competitive, cost-effective, and fair. However, the department believed that because those terms were not defined in the Constitution, the effect should be given to the provisions in the Bill and regulations. Furthermore, the department felt the proposed interpretation clause may encounter interpretation disputes.

Adv Jenkins indicated that the courts would examine whether the procurement policies applied to the Act and regulations. To provide each of those constitutional principles in the legislation would restrict their interpretation going forward – not doing so would not make the Bill unconstitutional. If cost-effectiveness was included in the Bill, then the issues related to price, which were made in relation to the PFA, would be raised once more. The task team report argued that the price issue had been used to prevent the achievement of the specific objectives of preferential procurement. Hence, the set-asides were proposed in the Bill.

Mr Ryder felt that the PLA’s input presupposed that the Bill would eventually be challenged in the courts, which the Committee had to prevent. South Africans wanted efficiency and value for money, he stressed.

He felt that the Bill did not offer a middle ground as it over-emphasised Section 217 (2) of the Constitution while ignoring Section 217 (1), which has been repeatedly raised by opposition parties and stakeholders. Given this, he did not believe the department’s proposed changes had gone far enough to limit the requirements for a procuring institution to pay a premium for preferential procurement. He added that price and value for money had to be part of the procurement process.

He felt it would be important to benchmark the country internationally on how premiums are done.

The Chairperson indicated that all members agreed that value for money was important. However, he believed that the transformation of the economy was even more critical for the country.

Leaders of the ruling party have also acknowledged that a small politically connected elite has been the biggest beneficiaries of preferential procurement policies, he pointed out.

While he understood the concerns around potential challenges to the Bill, he felt that no matter what Members did, the matter would be taken to court, as not all stakeholders would be satisfied.

He agreed with the PLA’s advice that it was better to avoid giving meanings to terms contained in the Constitution. He asked why the stakeholders were insistent on this recommendation.

Mr Ryder mentioned that the country’s economic reforms had mostly benefited a select few, which the Bill continues to do. In order for the government to achieve a re-invention of the economy, it would need to run its affairs efficiently and well. Further to that, he said that money should be reprioritised to critical areas such as education to provide real reform in the country’s economy. The enforcement of B-BBEE had a history of failure, he added.

The Chairperson noted that Members shared different views on certain aspects of the Bill on ideological lines. Despite that, he agreed that issues of transformation could not be solved by the Bill on its own, and with the observation that if government efficiency were improved, the progress of reforming the economy would be much further than it is now.

He felt that price was an issue that could not be ignored. He proposed that a system be found that allows price to be a major consideration but also seeks to provide broad-based redress, not the enrichment of white and black elites. Moreover, he encouraged the DA members to provide a written submission regarding their opinion on price.

Thereafter, he posed four questions to the department.

First, he asked the department what changes it had made to the text of the Bill regarding price. Second, he asked what provisions were included in the Bill that ensured the same companies did not continue benefiting from state procurement. Third, he asked what the department had done to ensure that the government obtained value for money and prevented corruption.

Fourth, he asked the department to provide the Committee with the clause that civil society organisations indicated was not enough: ‘develop’ and ‘implement’.

Adv Jenkins mentioned that the PLA's advice was to ensure that the legislation was not challenged in the courts. Based on case law and the provisions of the Bill, he did not believe that the Bill would be challenged in the courts.

The Chairperson repeated Mr Du Toit’s earlier question on how long redress policies would remain in place.

Adv Van Schoor mentioned that Section 217 (1) is mentioned in the preamble and objects clause of the Bill, where it states that the objects referred to Section 217 (2) must, among other things, ensure efficient, effective, and economical use of public resources through the assessment of the cost benefits and risks.

Referring to the measures put in place to prevent the charging of exorbitant prices, she stated that the Bill had provisions related to disbarment, specifically on price fixing, for service providers and offences associated with corruption. In its recent report, the department proposed to amend Clause 25, which states that the minister must determine a framework for the procuring system that procuring institutions must implement. The new clause read as the criteria for evaluation, which may include, where applicable, price, experience, reliability, professional and managerial competence of the supplier or contractor and of the person involved in providing the services, functional characteristics of goods and environmental characteristics.

Touching on the sunset clause, she explained that it could be placed in the Bill in relation to aspects of preferential procurement through the review of the legislation or a notice in the gazette which may state ‘subject to consultation’ or ‘Parliament’s approval’ it would be implemented.

Mr Mathebula, on what mechanisms have been put in place to ensure that disadvantaged companies benefit from preferential procurement, outlined that the stakeholders submitted over and above what already exists in terms of beneficial ownership. Furthermore, clause 13 of the Bill provides a category of people automatically excluded from participating in or submitting bids to the government. Other provisions in the Bill also prescribe the action that should be taken against those who collude to steal or defraud the state.

The Bill should explain the recommendation by civil society organisations that the five principles contained in Section 217 (1) be incorporated into the legislation.

The Chairperson wondered why the civil society organisations made that submission.

Mr Mathebula felt that the proposal was not feasible as the terms are subject to interpretation, which may cause issues going forward. Moreover, he argued that the proposal conflated Sections 217 (1) and (2), which was incorrect as the latter speaks to transformation and the former the general principles of what procurement should be.

He disagreed with the notion that the Bill was more biased to Chapter 4 and felt that it went beyond that.

On price and value for money, he pointed out that in its presentation, the department took a broader view by including Section 195 (1) (b) of the Constitution, which speaks to efficient, economical and effective use of the state resources. One of the pillars of the Bill states that it is premised on Sections 195 and 217. The department presented the price issue, and stakeholders rejected this, pointing out that it had been discredited worldwide as a mechanism for evaluating tenders. Members of the Standing Committee of Finance (SCOF) also disagreed with the proposal to use price as it would exclude small and medium businesses.

Regarding who then determined preferential procurement, he said that the Committee would have to decide whether the word ‘develop’ should be included in clause 16 of the Bill. The department has proposed in the Bill that there be a system or framework in which the procuring institutions develop their policies.

Mr Ryder indicated that value for money, which included the capability of a service provider to do the work, was a better measure than price. However, he believed that price should still be maintained but with less emphasis placed on it. He felt that doing so would create a balance in the legislation.

He added that overreliance on regulations was one of the core issues in the Bill.

Mr Du Toit thought that B-BBEE had to be scrapped to ensure equality between people of all races and ethnicities.

The Chairperson said the Committee agreed with the department’s proposal to include the words ‘develop’ and ‘implement’ in clause 16 of the Bill, and its disagreement on the suggestion that the five principles in Section 217 (1) be defined in the Bill.

He agreed with Mr Ryder’s sentiments on the importance of balancing price and value for money. Furthermore, he did not believe that Clause 25 did not have to regulate prices. As such, he proposed that the department craft a clause that took into account price – and the ability to deliver – and value for money but that would not exclude black Africans from applying for preferential procurement opportunities. He suggested that this be deferred to the Minister’s regulations if this could not be done.

While the NA may dismiss this proposal, he stressed that the NCOP had the right to make it. Also, he suggested that more preventative measures be placed in the Bill to deal with corruption.

Referring to the proposed sunset clause, he wondered how that would be done. Nevertheless, he recommended that the Committee’s report on the Bill state that as the economy is progressively transformed and reasonably representative of the population groups the government could incrementally exist from some of the provisions of B-BBEE. This also depended on how prepared established businesses were to open space for companies owned by disadvantaged black Africans.

Adv Van Schoor read out the clause that dealt with this, which said: the Minister must prescribe a criteria for evaluation in the framework, which may include, where applicable, price, experience, reliability, and professional and managerial competence of the supplier or contractor and of the personnel involved in providing the goods and services, the functional characteristics of goods, and environmental characteristics.

The Chairperson said that the Bill had to have compulsory things in its text.

Mr Mathebula indicated that the department would investigate the recommendations on preventative measures as well as punitive ones.

The Chairperson indicated that the department could begin drafting parts of the amendments to the Bill on the sections where the Committee has provided guidance. The ultimate decisions will be taken at a later stage.

Adv Van Schoor mentioned that the department would look into the proposal for the Bill to be prescriptive regarding the procurement system.

One of the preventive measures in the Bill was transparency, for which the department would have to rely on civil society's help. The department would consider other preventive measures that could be included in the Bill.

The Chairperson asked that the department note all the recommendations made by the Committee in the meeting.

He asked what the EFF’s position on the Bill was and whether it voted for or against it in the NA.

Mr Mathebula recalled that the EFF did not support the Bill. One issue the party raised during the SCoF process was the value for money and price. The department has held that value for money and transformation were not mutually exclusive. However, it had to re-look at its position on the matter due to the comments made by Members of the SCoF and civil society, contained in the proposed amendment of Clause 25.

Another issue raised by the EFF was strengthening the capacity of the state to undertake certain services internally.

Adv Van Schoor was unsure as to whether the EFF supported the Bill or not.

Mr Mangweni mentioned that it was written in the report that the DA and EFF reserved their position on Bill.

The Chairperson pointed out that this differed from the House process to either vote in favour or not.

Mr Ryder indicated that in the speech delivered in the House, the EFF reserved its position, as shown in the Hansard.

The Chairperson presumed that the EFF must have abstained.

Mr Ryder highlighted that the phrase ‘cost-effective’ is from Section 217 (1) of the Constitution and should be included in the Bill.

Adv Van Schoor indicated that the department proposed including the word develop in the provision of developing policy. Stakeholders said this would raise concerns about the role of the procuring institution and the Minister of Finance (MoF) and Public Procurement Officer (PPO). The MoF does have a role, through the regulations, but not the PPO, in relation to the procurement policy. The stakeholders are also concerned that the Bill may be taken to court like the PPFA.

The department argued that the legislative scheme in the Bill was different from the one in the PPPFA and is more detailed on the matters that the Minister may prescribe. The PPPFA was very limited as the Minister prescribed a formula for the points system and then the necessary and expedient provision that the department relied on to make the 27th regulations, which were found to be unconstitutional. This was not the case in this Bill, as there would not be a reliance on general provisions but on the regulations gazetted by the Minister.

It is also made clear in the Bill that when procuring institutions determine the policies, they will be bound by what is in the Act and its regulations. As such, the department did not believe there was the same risk for the Bill to be found unconstitutional on the same basis as with the PPPFA.

Adv Jenkins agreed with the department’s opinion.

The Chairperson added that while the developed countries offered the country a guide on these issues, it was important to understand their unique challenges.

He thanked the department for its input and indicated that the Committee would meet again at 14:00 on Thursday.

The meeting was adjourned.