Abstract
This chapter investigates the effect of overlayered regulatory policy on public procurement practice. Litigation brought forth in Allpay Consolidated Investment Holdings and Others resulted in a better formulation of preferential procurement in South Africa. Thus, Jenkins revisits the case to draw implications for administrative decentralization. The author argues that the Allpay Consolidated case reveals a lacuna in parliamentary and administrative regulatory powers at the municipal, provincial, and national levels. More particularly, the essay identifies the practice of swapping public servants between different agencies and the function of the accounting officers in provincial and municipal bid committees as problematic because they contribute to a dysfunctional public procurement accountability system.
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Notes
- 1.
Ambe, Joanna & Badenhorst-Weiss. “Procurement Challenges in the South African Public Sector” Journal of Transport and Supply Chain Management Vol. 6 no. 1(2012): 243; Bolton, Phoebe. “The regulatory framework for public procurement in South Africa.” In Public Procurement Regulation in Africa, edited by Geo Quinot and Sue Arrowsmith, 178–199. Cambridge: Cambridge University Press, 2013, 178.
- 2.
Ambe, Joanna & Badenhorst-Weiss. “Procurement Challenges in the South African Public Sector” Journal of Transport and Supply Chain Management Vol. 6 no. 1(2012): 242.
- 3.
Bolton, Phoebe. The Law of Government Procurement in South Africa. Cape Town: LexisNexis Butterworths, 2007, 3.
- 4.
Constitution of the Republic of South Africa, 1996 (the “Constitution”), section 217.
- 5.
Constitution, Subsection 40(1) provides: “In the Republic, government is constituted as national, provincial and local spheres of government which are distinctive, inter-dependent and interrelated.”
- 6.
Bolton, Phoebe. Bolton, Phoebe. “The regulatory framework for public procurement in South Africa.” In Public Procurement Regulation in Africa, edited by Geo Quinot and Sue Arrowsmith, 178–199. Cambridge: Cambridge University Press, 2013.
- 7.
Constitution of the Republic of South Africa Act, 1993 (Act No. 200 of 1993) (the “Interim Constitution”), came into effect on 27 April 1994.
- 8.
Klaaren Jonathan and Glen Penfold. “Just Administrative Action.” In Constitutional Law of South Africa. 2nd edition, edited by S. Woolman and M. Bishop, chapter 63. Kenwyn: Juta, 2006. See Revision Service 5 2013, 63–1.
- 9.
Act 3 of 2000. Section 33 of the Constitution provides:
-
1.
Everyone has the right to administrative action that is lawful, reasonable and procedurally fair.
-
2.
Everyone whose rights have been adversely affected by administrative action has the right to be given written reasons.
-
3.
National legislation must be enacted to give effect to these rights, and must
-
(a)
provide for the review of administrative action by a court or, where appropriate, an independent and impartial tribunal;
-
(b)
impose a duty on the state to give effect to the rights in subsections (1) and (2); and
-
(c)
promote an efficient administration.
-
1.
- 10.
Bolton, Phoebe. “The Committee System for Competitive Bids in Local Government” Potchefstroom Electronic Law Journal Vol. 12 no. 2 (2009): 57.
- 11.
Section 111 of the Local Government: Municipal Finance Management Act, 2003 (Act No. 56 of 2003), read with the Municipal Supply Chain Management Regulations, Government Gazette, No. 27636 of 30 May 2005.
- 12.
In this case the municipality adopted a supply chain management policy in line with the legislative framework. However, none of the members of the committee were officials of the department concerned, although the department employed at least experts which could have been members. On objective grounds, the Court found that the policy provision was peremptory and non-compliance resulted in the award being set aside.
- 13.
- 14.
Section 172(1)(b) of the Constitution provides that when a court decides a constitutional matter a court may make any order that is just and equitable.
- 15.
AllPay Consolidated Investment Holdings (Pty) Ltd and Others v CEO of the South African Social Security Agency and Others (678/12) [2013] ZASCA 29; [2013] 2 All SA 501 (SCA) (27 March 2013) at para [19].
- 16.
Ibid, para [21].
- 17.
Allpay Consolidated Investment Holdings (Pty) Ltd and Others v Chief Executive Officer of the South African Social Security Agency and Others (CCT 48/13) [2013] ZACC 42 (29 November 2013), paras [22]–[30].
- 18.
Pars [38]–[40].
- 19.
Par [65].
- 20.
Par [70]. Empower requirements refer to the statutory framework for preferential procurement discussed briefly in this paper as part of the regulatory framework for public procurement in South Africa.
- 21.
Par [92].
- 22.
Section 55(2). The section refers specifically to the National Assembly. South Africa has a bicameral parliament. For the purpose of this chapter the reference to parliament is preferred.
- 23.
Sections 73 to 82 deal with the national legislative process.
- 24.
Constitution, sections 57(1) and 70(1).
- 25.
Parliament’s Oversight and Accountability Model, published in the Announcements, Tablings and Committee Reports (ATC), 27 January 2009, p. 64, was approved by the National Assembly on 17 February 2009, and by the National Council of Provinces on 19 March 2009.
- 26.
Ibid, p.70.
- 27.
Ibid, p.71.
- 28.
In this respect see Prof G Erasmus, “Is parliamentary oversight a political function?” http://www.tralac.org/2013/05/22/is-parliamentary-oversight-a-political-function/.
- 29.
Section 1.
- 30.
Section 2.
- 31.
Fedsure Life Assurance and Others v Greater Johannesburg Transitional Metropolitan Council and Others 1998 (12) BCLR 1458 (CC) at para. [56].
- 32.
Ibid, para. [58].
- 33.
Pharmaceutical Society of SA and Others v Minister of Health and Another; New Clicks SA (Pty) Ltd v Tshabalala-Msimang NO and Another 2005 (6) BCLR 576 (SCA).
- 34.
Section 217 of the Constitution, 1996. The Interim Constitution also provided for procurement in section 187.
- 35.
Act 1 of 1999 (as amended by the Public Finance Management Amendment Act 29 of 1999).
- 36.
Act 32 of 2000 (as amended by the Local Government: Municipal Systems Amendment Act 44 of 2003).
- 37.
Act 56 of 2003.
- 38.
Act 53 of 2003.
- 39.
Act 5 of 2000.
- 40.
National Treasury: Regulations for Departments, Trading Entities, Constitutional Institutions and Public Entities: Issued in terms of the Public Finance Management Act 1999, Government Gazette, No. 27388 of 15 March 2005. Public Finance Management Act: Draft Treasury Regulations were published in the Government Gazette (No. 35939) for public comment on 30 November 2012.
- 41.
Section 38(1)(a)(iii) of the Public Finance Management Act provides that the accounting officer must ensure that the department, trading entity or constitutional institution has an appropriate procurement and provisioning system that is fair, equitable, transparent, competitive and cost-effective.
- 42.
Act No 86 of 1968.
- 43.
The amended regulations to the State Tender Board Act, which remains on the statute book, provided a choice to an accounting officer to either procure through a tender board, or in accordance with the policy and regulations made in terms of the Public Finance Management Act. This choice and dual nature of procurement will remain until the repeal of the State Tender Board Act.
- 44.
This could either be the State Tender Board or regional tender boards established by the Minister of Finance in consultation with the State Tender Board.
- 45.
Bolton, Phoebe.“The regulatory framework for public procurement in South Africa.” In Public Procurement Regulation in Africa, edited by Geo Quinot and Sue Arrowsmith, 178–199. Cambridge: Cambridge University Press, 2013, 181.
- 46.
In terms of the Public Finance Management Act, a “department” is a national or provincial government department; a “constitutional institution” is an institution established by the Constitution; and an “entity”, “public entity” or “trading entity” is a national or provincial public entity established and functioning in terms of legislation, but excluding universities.
- 47.
Section 55.
- 48.
Sections 6 and 18.
- 49.
Constitution, section 216.
- 50.
Concise Oxford Dictionary. 9th ed., Oxford University Press, 1995.
- 51.
- 52.
Article 5(3) of the Treaty on European Union (consolidated version following the Treaty of Lisbon, which entered into force on 1 December 2009):“Under the principle of subsidiarity, in areas which do not fall within its exclusive competence, the Union shall act only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the Member States, either at central level or at regional and local level, but can rather, by reason of the scale or effects of the proposed action, be better achieved at Union level.”
- 53.
Bolton, Phoebe. “The regulatory framework for public procurement in South Africa.” In Public Procurement Regulation in Africa, edited by Geo Quinot and Sue Arrowsmith, 178-199. Cambridge: Cambridge University Press, 2013, 195.
- 54.
Sections 59 and 72.
- 55.
King and Others v Attorneys Fidelity Fund Board of Control and Another 2006 (4) BCLR 462 (SCA); Doctors for Life International v Speaker of the National Assembly and Others 2006 (12) BCLR 1399 (CC); and, Matatiele Municipality and Others v President of the RSA and Others 2007 (1) BCLR 47 (CC). See also Minister of Health and AnotherNO v New Clicks South Africa (Pty) Ltd and Others (Treatment Action Campaign and Another as Amicus Curiae) 2006 (1) BCLR 1 (CC); and, Merafong Demarcation Forum and Others v President of the RSA and Others 2008 (10) BCLR 968 (CC).
- 56.
At para. [102].
- 57.
At para. [105].
- 58.
At para. [125].
- 59.
At para. [129].
- 60.
Ibid.
- 61.
Ibid.
- 62.
At p. 108.
- 63.
For a more detailed discussion see Jenkins, Frank. “The Budget Process and Strategic Civic Interventions.” In Mobilizing Social Justice in South Africa: Perspectives from Researchers and Practitioners, edited by Jeff Handmaker & Remko Berkhout, 41-70. Pretoria: Pretoria University Law Press, 2010, 49.
- 64.
Bolton, Phoebe. “The regulatory framework for public procurement in South Africa.” In Public Procurement Regulation in Africa, edited by Geo Quinot and Sue Arrowsmith, 178–199. Cambridge: Cambridge University Press, 2013, 186.
- 65.
Ibid.
- 66.
Act 88 of 1998.
- 67.
Act 38 of 2000.
- 68.
Act 12 of 2004.
- 69.
Act 3 of 2000.
- 70.
Act 2 of 2000.
- 71.
Item 20.1.
- 72.
Item 16A(6.4).
- 73.
Act 10 of 2009.
- 74.
Section 40.
- 75.
Section 65, read with Schedule 3 to the Act.
- 76.
Government Gazette No. 36130, 4 February 2013. As required by section 65(5) of the Financial Management of Parliament Act.
- 77.
Constitution, section 217.
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Jenkins, F.S. (2016). Decentralization and Accountability Challenges to Appointing Independent Bid Committees in the Public Sector. In: Nyeck, S. (eds) Public Procurement Reform and Governance in Africa. Contemporary African Political Economy. Palgrave Macmillan, New York. https://doi.org/10.1057/978-1-137-52137-8_7
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