Legal battle looms over City of Cape Town's Procurement Act
Cape Town mayor Mayor Geordin Hill-Lewis said the aim to overhaul procurement and fight corruption is undermined by the fatal flaws in public participation and unlawful passing of the Public Procurement Act.
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While the City of Cape Town and Western Cape Provincial Government headed to the Constitutional Court to challenge the Public Procurement Act, trade federation COSATU says keeping the status quo will allow the "wild west that is public procurement to continue".
The Act, which will bring all procurement within the state under a central office housed in the National Treasury, also sets guidelines for preferential procurement in accordance with the government’s Broad-based Black Economic Empowerment policies.
The City of Cape Town argues that as a result, municipalities won’t be able to maintain their own database of accredited suppliers, and payments to suppliers will need to be integrated with a national database.
Cosatu Parliamentary spokesperson, Matthew Parks, said they are not convinced by the arguments presented to the Constitutional Court and fear the City and the province are putting the cart before the horse.
“We believe their concerns would best be addressed by engaging Treasury on the regulations. The risks of their court action would be to allow the wild west that is public procurement to continue.
“Cosatu supports the Public Procurement Act, in particular its objectives to boost emerging SMMEs, historically disadvantaged communities, and local businesses.
"We believe the Act drafted by the government led by the ANC will be a critical weapon in the war against state capture and corruption that has become a cancer across the state, especially in state-owned enterprises (SOEs) and municipalities,” Park said.
Cosatu Parliamentary spokesperson Matthew Parks said they are not convinced by the arguments presented to the Constitutional Court and fear the city and the province are putting the cart before the horse in this instance.
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The City and the province argued in court that Parliament did not extensively consider all the input made on the Bill, especially after amendments were made by the National Council of Provinces in 2023.
They also argued that it will slow down local service delivery and undermine the constitutional autonomy of local government.
In response to Cosatu’s defence, Cape Town Mayor Geordin Hill-Lewis said: “The aim to overhaul procurement and fight corruption is undermined by the fatal flaws in public participation and unlawful passing of the Public Procurement Act.
“Besides this, the Act brings a raft of red tape that will slow delivery, and is a constitutional overreach by the national government into the local sphere.
“Cosatu’s network of members can help the fight against procurement corruption in municipalities without this unconstitutional legislation that will slow service delivery with even more red tape,” Hill Lewis said.
“The fact is local government must be able to act swiftly to resolve urgent water, sanitation, electrical, waste, and environmental issues,” Hill-Lewis said.
“Instead, this Act will slow down municipalities via a massive new red tape burden and interference from other spheres of government. This is unconstitutional and undermines local government’s direct accountability to serving residents.”
He said their concerns about the Act include:
- Centralising all national procurement via a Public Procurement Office (PPO) further runs the risk of nationwide disruptions to municipal procurements if the central system goes offline.
- Municipalities will no longer have the power to lawfully deviate from procurement regulations for urgent service delivery without centralised approval via the PPO.
- Spurious tender appeals may hold up service delivery, as the Bill limits the ability to conclude contracts while tender awards are reviewed.
Hill-Lewis added that the Act will also undermine infrastructure investment by making public-private partnerships too complex and time-consuming.
Parks commented on the City’s statement, saying they appreciate their concerns about excessive red tape and bureaucracy.
“We believe those issues require an urgent engagement between Treasury, the Western Cape Provincial Government, and the City to resolve.
“The intention for the Act is not to suffocate government with unnecessary red tape but to put in place a single online procurement system that is transparent and an effective obstacle to corruption,” Parks said.
Judgment has been reserved.