A while back a new law was introduced by finance minister Enoch Godongwana, basic state-owned organisations no longer need to rely entirely on BEE-compliant companies during procurement procedures.
Years of resistance from big industry players, which claimed that the government’s preferential procurement policy drove up prices and hurt the economy have finally paid off.
The purpose of the new law is to nullify some provisions of the Preferential Procurement Regulations 2017, which were published five years ago.
Here is a closer look at these new laws to understand what they mean for businesses
going forward.
State-owned businesses can determine their own preferential procurement The new rules provide state agencies with more leeway to set their own preferred procurement policies within the bounds of the Preferential Procurement Policy Framework Act.
The new rule states that the date of 16 January 2023 will be the day the law is changed. Neither the BEE standards nor any provision allowing the minister of trade and industry to compel particular industries to purchase local products are mentioned in the new laws.
As a result, state-owned organisations like Eskom, Transnet, Sanral, and others may not be required to only buy from businesses that meet all of the BEE requirements, simplifying the industrial relations solutions of these State-Owned Enterprises.
A focus on technology-driven procurement March of 2023 is when the government is expected to present the Public Procurement Bill to Parliament, along with the revised Preferential Procurement Regulations of 2022.
The minister has stated that the measure will increase openness and honesty in government purchasing and will encourage the use of technology to increase the efficacy and efficiency of government contracts.