Public procurement in South Africa is guided by constitutional provisions and a number of legislation which include the Public Finance Management, Municipal Finance Management, Promotion of Equality and the Prevention of Unfair Discrimination, Construction Industry Development Board, Preferential Procurement Policy Framework, and Broad-based Black Economic Empowerment Acts, among others.
The constitution stipulates that the procurement system should be fair, equitable, transparent, competitive and cost effective. Further, the constitution requires that national legislation should prescribe a framework for the implementation of a preferential procurement policy.
The system is highly decentralised, with the Public Finance Management Act establishing a regulatory framework for procurement in national and provincial departments and state-owned enterprises while the Municipal Finance Management Act establishes a regulatory framework for procurement in municipalities and municipal entities.
Based on this decentralised structure, the National Treasury regulation stipulates that organs of state should establish three kinds of committee: bid specification, bid adjudication and bid award committees to ensure segregation of duties, greater efficiency and risk management. Some departments have combined the bid specification and adjudication committees.
In 2013, National Treasury established the Office of the Chief Procurement Officer with the overarching regulatory responsibility to monitor and evaluate public procurement performance in government.
The Office is seized with reviewing legislation to modernize and simplify the legal framework, reviewing preferential procurement legislation to enhance economic opportunities for industrial supplier development through public procurement. Further, the Officer administers a Register for Tender Defaulters and Restricted Suppliers which is open to the public and for government to consult for contractors prohibited from doing business with government for various reasons.
Challenges have been noted in public procurement especially with the awarding of the huge construction contracts ahead of the 2010 soccer world cup.
Civil Society has established a corruption watch which has received numerous reports across the country’s provinces. For the period January 2012 - January 2014, 465 complaints were lodged alleging corruption in public procurement. 32% of the reports came from Gauteng, implicating its three metropolitans (municipalities) in graft allegations.