- The Mayor of Cape Town Geordin Hill-Lewis has approached the Constitutional Court to have the Public Procurement Bill declared unlawful.
- The city argues that the passage of the bill was procedurally flawed.
- It also argues that it will slow down procurement in the city and allow interference in municipal procurement.
- For more financial news, go to the News24 Business front page.
The City of Cape Town has launched a legal challenge to the Public Procurement Act in the Constitutional Court, arguing that several procedural requirements were not met when it passed through Parliament last year.
The Public Procurement Act will apply to all government departments and state entities. It establishes a unified public procurement system across the government and introduces new preferential procurement requirements to make it easier for previously disadvantaged groups to win state contracts.
The act has been criticised for raising the cost of procurement and adding to red tape, which will compound inefficiencies. While the DA opposed it, the ANC and black business groups have championed it.
Said Cape Town mayor Geordin Hill-Lewis:
We believe this act should be invalidated due to fatal shortcomings in public participation and Parliament’s procedures. Beyond these issues, it is vital that any new consideration of the Act takes into account the massive red tape burden it will place on local government and the unconstitutional interference it permits in municipalities.
The procedural shortcomings include:
- Seven of nine provinces did not have lawful final mandates to vote on the bill in the National Council of Provinces (NCOP);
- Inadequate public participation timeframes in the provinces and the NCOP;
- Incorrect information in reports considered by the NCOP and National Assembly; and
- The National Assembly failed to consult on changes made to the chapter on preferential procurement, did not consider all public comments, and did not meet the public participation requirements in terms of the rules.
Hill-Lewis said that the act would slow down procurement, which is frequently urgent to deal with crises in services, and would allow interference from other spheres of government in municipal procurement.
“This inefficiency will directly impact service delivery to residents,” he said.
The act will also create a unified procurement system across the government for the first time. Hill-Lewis says that provisions of the act would enable provincial treasuries to interfere in municipal procurement and allow the national Public Procurement Office (PPO) of the National Treasury to dictate instructions to municipalities without proper cooperative governance arrangements or consultation.
“This is unconstitutional and undermines local government autonomy and direct accountability to serving residents.”
Hill-Lewis added that municipalities would no longer be allowed to maintain their own database of accredited suppliers, which would need to be integrated with a national database. If the centralised system goes offline, the municipal requirement could be disrupted nationwide.
In addition, the act will:
- Take away the power of municipalities to lawfully deviate from procurement regulations for urgent service delivery without centralised approval via the PPO;
- Allow spurious tender appeals to hold up service delivery; and
- Be cumbersome for public-private partnerships, which are the best way to deliver infrastructure development.
Notice of the application has been served on Parliament and President Cyril Ramaphosa. While the act has been signed into law, it has not yet been enacted.