KZN revises procurement rules to transform economy

Tuesday, April 11, 2017

Pretoria - The KwaZulu-Natal Provincial Treasury has launched the revised Regulations of the Preferential Procurement Policy Framework Act (PPPFA) of 2017 to transform the economy of that province.

The revised regulations are meant to address the wide economic gap through a carefully skewed government procurement process, taking into account the plight of black-owned enterprises, which have not been benefitting properly from government tenders. 

The Provincial Treasury is now on a province-wide campaign to workshop officials from municipalities, provincial departments and government entities on the revised regulations that were promulgated on 20 January 2017.

Launching the revised regulations, KZN Provincial Treasury Head of Department, Simiso Magagula, said the revised regulations seek to pave the way for the majority of African service providers, who remain excluded from the centre stage of economic transformation.

He said the revised regulations are not an amendment to the PPPFA, but a “step in the right direction”.

Revised regulations

The revised regulations prescribe new changes that increase the threshold for the application of preference points during the tender process. For tenders between R30 000 and R50 million, an 80/20 principle applies, while the 90/10 principle applies in tenders valued above R50 million.

The regulations allow government to enforce partnerships between big and emerging businesses through sub-contracting. The new regulations prescribe that 30% of the value of a particular contract has to be given to the designated group, as mentioned in the procurement regulations.

The revised regulations enforce localisation. Government departments will have to procure goods and services within the area where the project is and not transport goods and services from outside that particular locality when they can be sourced within.

"This is not a milestone as far as radical economic transformation is concerned but it is the beginning.

"Government is looking at supply chain as the tool to bring about radical economic transformation for African enterprises. The status quo on the economic front still remains. Those who were empowered before, remain empowered and government continues to empower them with the procurement expenditure that we incurred when procuring goods and services. The idea is to change that and focus on entrepreneurs that are black and African in general," said Magagula.

He called on the public to monitor if government departments and municipalities comply with the new regulations.

Training officials on revised regulations

Head of Provincial Supply Chain Management, Advocate Siza Mthethwa, said government has a mandate to give effect to radical economic transformation.

Mthethwa said Provincial Treasury had started rolling out roadshows to all districts in KZN to train SCM practitioners in municipalities, departments and government entities on the revised regulations.

“We also train suppliers so that they are empowered in how to do business with government," said Mthethwa.

Engagements between KZN Treasury, municipal officials and businesses on these new tender processes have started, with the first one having been in KwaDukuza on Monday. The second one is being held in Richards Bay today.

These engagements will continue until early May. –