DRAFT PUBLIC PROCUREMENT BILL ISSUED – IS BEE STILL A CONSIDERATION?

Context of the Bill

In February 2024, National Treasury released the draft Public Procurement Bill, which is set to regulate and prescribe a framework for public procurement.

This Bill follows the revision of Preferential Procurement Regulations in November 2022, which omitted references to BEE and local content evaluation criteria. The absence of these criteria raised questions regarding the necessity of BEE and transformation in state-owned entities' procurement processes. Treasury, however, clarified at the time that these Regulations were merely a “placeholder while the Public Procurement Bill was being finalised.

What we know about the Bill so far

• The Bill incorporates elements of transformation and BEE, which aim to advance the protection of previously disadvantaged persons against unfair discrimination in relation to public procurement.
• Revised pre-qualification criteria have been re-introduced into the Bill, which include bidders having a stipulated minimum BEE status contributor level, as well as a requirement to subcontract to previously disadvantaged persons as a condition of bid.
• The Bill also introduces “set-asides” for preferential procurement, whereby organs of state must set-aside a bid specifically for previously disadvantaged persons.
• The Bill also provides for the designation of certain sectors for local production and content.
• There is no indication with regards to how price will be weighted against a BEE status level or specific goals. This will presumably be addressed in the regulations that will accompany this Bill once it is gazetted.
• The Bill is currently in draft and there is no indication of whether public comments can be submitted, when it will finally be gazetted into law or when it will replace the current 2022 Regulations.

It is important to understand the current legislation and proposed changes and how this impacts your BEE strategy. State procurement requirements will ultimately trickle down and impact private procurement. BEE needs to be considered when tendering and remaining competitive in both the public and private space.

Should you need guidance or assistance in navigating the legislation or your BEE strategy, contact Transcend