Procurement Act struck down by Concourt

The Constitutional Court has struck down the Public Procurement Act that was signed into law in 2024. Illustration: Lisa Nelson

• The Constitutional Court ruled that there had not been proper public consultation on the new Public Procurement Act. It was rushed into law.
• AmaBhungane told the court that the public had only been given four hours to assess changes, including a completely reworked Chapter Four, and then only two minutes each to present their cases.
• The City of Cape Town was concerned that the new act would have created red tape for municipalities, hampering their ability “to resolve urgent water, sanitation, electrical, waste, and environmental issues”.

The Public Procurement Act, which was signed into law in July 2024, has been declared unconstitutional by the Constitutional Court.

This means the act, which has never been implemented, has now been scrapped from the law books.

The court unanimously declared that Parliament had failed in its constitutional obligations to facilitate meaningful public participation during the legislative process.

The bill aimed to regulate how the government procures goods and services and established a framework for how billions of rands of public money are spent every year on service delivery. The court found it had been rushed through the various parliamentary processes.

While no reason had been given for the “haste”, the record suggested that one reason Parliament may have acted carelessly was to pass the bill before the 2024 national elections, the court said.

The act intended to consolidate 34 pieces of legislation concerning procurement and do away with a fragmented procurement regime.

In a ruling handed down by Acting Justice Lister Nuku on Thursday, he said while timeline protocols were not binding on Parliament, if it deviated from them, it must explain why.

He noted submissions by amaBhungane that when the bill came before the Standing Committee, the public had only been given four hours to assess changes, including a completely reworked Chapter Four, and then only two minutes each to present their cases.

“Given the importance of the bill, and the nature and extent of the amendments to Chapter Four, it does not strike me as reasonable …” he said, saying it would have affected the stakeholders’ ability to meaningfully engage with the bill and to express their concerns.

He said that on assessing the complaints raised by amaBhungane and the lack of satisfactory explanation for the truncated time line for public participation process, the court could find no justification for the truncated time frame.

The new chapter four moved from a permissive, enabling framework to a more prescriptive one, with mandatory qualification criteria on which bidders could be routinely excluded as a matter of law.

The applicants were concerned the new act would create red tape. The City of Cape Town, for example, was worried this would hamper the ability of municipalities to “act swiftly to resolve urgent water, sanitation, electrical, waste, and environmental issues”.

AmaBhungane joined the Premier of the Western Cape Government, the City of Cape Town and trade union Solidarity in their constitutional challenge to the act based mainly on the lack of meaningful public participation during the drafting and adoption process.

While the applicants raised several issues, the court focussed on the last-minute amendments to the act, which were done without any prior consultation, the truncated timelines to make submissions, and the admission by the National Treasury that it had not, because of time constraints, considered all the submissions received.

In relation to the new Chapter Four, the respondents, including the Speaker of the National Assembly, the chairperson of the National Council of Provinces, and the Minister of Finance, argued that its content was foreshadowed in the old chapter and its purpose was to unpack and elaborate on those provisions.

They also contended that regulations promulgated in 2017 under the Preferential Procurement Policy Framework Act, contained fundamentally the same concepts, and those had been the product of an extensive research and consultation process.

But the court found these arguments to be “untenable”. This was because the new chapter introduced new mechanisms and categories, raising complex constitutional, economic and practical considerations concerning competitiveness, fairness and cost effectiveness “material enough to warrant additional public participation in Parliament.”

Nuku noted that the 2017 regulations had also been declared unlawful and had been replaced in 2022.

On the issue of meaningful participation, the respondents argued that Parliament gave due consideration to the stakeholders’ submissions and it was not bound by their views or required to accommodate all the demands.

On the measure of “reasonableness”, Nuku said this meant that interested parties must be afforded a reasonable opportunity to know about the bill, the issues, and to have an adequate say, capable of influencing a decision.

“The act is an important piece of legislation … it was crucial that the public be afforded the fullest opportunity to have their voices heard.”

He said National Treasury had conceded that out of 112 submissions it had only considered about 40 due to time constraints.

“This lack of consideration constitutes a serious deficiency in the … process and one that prevented the public’s views from reaching the lawmakers.”

He said the court had concluded that Parliament had failed in its constitutional obligations to facilitate a reasonable public participation process and the act was unconstitutional.

The court awarded the applicants costs.

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