Answer to Question #213620 in Sociology for Emmanuel Egbuagha

Question

Overview of the framework for public tenders in South Africa

Answer 1

The Constitution of the Republic of South Africa, 1996, is the main piece of legislation that governs public procurement (Constitution). When a governmental organ contracts for goods and services, it must follow the principles of fairness, equitability, transparency, competitiveness, and cost-effectiveness, according to Section 217 of the Constitution. The Constitution allows state organs (such as government and public enterprises) to create a preferred procurement policy that favors people who have been previously discriminated against unfairly. Section 217(3) of the Constitution allows for legislation to be enacted that establishes a framework within which the policy must be executed. The Preferential Procurement Policy Framework Act 5 of 2000 (PPPFA) and the regulations published under it in 2011 (PPPFA Regulations) define requirements for black economic empowerment (BEE) considerations in state tenders, following section 217(3) of the Constitution. The Municipal Finance Management Act 56 of 2003 (MFMA) and the Local Government: Municipal Systems Act, 32 of 2000, regulate, among other things, how municipal powers and functions are exercised and performed, as well as how municipalities and other institutions in the local sphere of government manage their financial affairs. The PPPFA must be followed by the entities to whom they apply. South Africa is a developed country and a founding member of the World Trade Organization (WTO). Despite this, South Africa could get favorable terms and longer implementation periods in the General Agreement on Tariffs and Trade for some of its most sensitive economic sectors (GATT). South Africa is a signatory to the WTO Agreement on Government Procurement (GPA) with few exceptions.