ConCourt voids Public Procurement Act as Godongwana warns on tender corruption

The Constitutional Court has declared the Public Procurement Act, 2024 invalid, ruling that it was adopted in a manner inconsistent with the Constitution. Finance Minister Enoch Godongwana has noted the judgment and says he respects it.

The case was brought by the Premier of the Western Cape Government and the City of Cape Town against the Speaker of the National Assembly, the Chairperson of the National Council of Provinces, the Minister of Finance and others.

What the court found

The court’s finding is about process. It held that the Act was adopted in a manner inconsistent with the Constitution, and it declared the law invalid on that basis. The judgment does not turn on whether the country needs procurement legislation. It turns on how this one was passed.

That distinction matters for what happens next, because the instrument at the centre of the state’s purchasing machinery is now void, and the framework it was meant to replace remains in force.

Godongwana’s warning on the current system

Godongwana said public procurement remains a key enabler of economic growth and development. He then set out the condition attached to that.

It cannot be realised, he said, in a weak public procurement ecosystem that is not governed by a legislative framework designed to achieve a system that is fair, equitable, transparent, competitive and cost-effective. Such a system, he added, should also provide for the protection or advancement of persons, or categories of persons, disadvantaged by unfair discrimination.

Public procurement in its current state will not realise these constitutional principles as it is fraught with challenges that include corrupt activities, fraud, financial loss, poor planning, inferior deliverables, weak institutional capacity, irregular expenditure and failure to sufficiently stimulate local industries.

He said this is evident from the various reports, media exposés and Commissions of Inquiry that have taken place or are underway.

The list he read out is the list of what procurement costs

The Minister’s own account of the current system names corrupt activities, fraud, financial loss, poor planning, inferior deliverables, weak institutional capacity, irregular expenditure, and a failure to sufficiently stimulate local industries.

Each of those has a price attached for people who live here. Poor planning and inferior deliverables are a clinic built to the wrong specification, or a road resurfaced and failing within a season. Weak institutional capacity is a municipality that cannot write a specification, so it pays more for less. A failure to stimulate local industries is a contract that could have sustained a South African factory going elsewhere.

That is why the procurement instrument is not an administrative detail. It is the rulebook for how the state spends public money, and the state spends a great deal of it.

Where the accountability sits

The Act was passed by Parliament. The judgment names the Speaker of the National Assembly and the Chairperson of the National Council of Provinces as respondents, along with the Minister of Finance and others. The court has found the manner of adoption defective, and the legislature is the body that adopted it.

The question that now sits with Parliament and with the executive is what replaces the voided Act, and on what timetable. The country needs a procurement framework that is defensible in court and enforceable in a municipal supply chain office, and the current one, on the Minister’s own description, is not doing the job.

What happens next

The judgment leaves the legislative framework for public procurement unresolved. Parliament is the body that must correct the manner of adoption the court found defective, and the Minister of Finance is the member of the executive answerable for the procurement system in the interim.

This report is drawn from the official account of the Minister’s response published by SAnews, the South African Government News Agency, which summarises the judgment and the Minister’s statement rather than reproducing the full text of the ruling. The judgment itself sets out the court’s reasoning and any order on the suspension of invalidity.

Source: SAnews (South African Government News Agency), Godongwana notes Constitutional Court judgment on Public Procurement Act, https://www.sanews.gov.za/south-africa/godongwana-notes-constitutional-court-judgment-public-procurement-act