ConCourt: South Africa Public Procurement Act 2024 Unconstitutional

• The South Africa Public Procurement Act, signed in July 2024, has been declared unconstitutional by the Constitutional Court.
• The court found that Parliament failed to facilitate meaningful public participation during the legislative process, particularly regarding a reworked Chapter Four.
• Intended to consolidate 34 procurement laws, the Public Procurement Act 2024 was never implemented and is now scrapped.
• The ruling stemmed from a challenge led by amaBhungane, highlighting truncated timelines for public input and last-minute amendments.
• This decision reinforces the critical importance of public involvement in South African legislative procedures, leaving the existing fragmented procurement framework in place.

This landmark decision underscores the critical importance of meaningful public participation in South African legislative processes, setting a significant precedent for future lawmaking.

The Constitutional Court has delivered a significant blow to South Africa's efforts to streamline government spending, declaring the Public Procurement Act unconstitutional. This pivotal legislation, which was signed into law in July 2024, aimed to consolidate 34 disparate pieces of legislation governing how the government procures goods and services, thereby replacing a fragmented procurement regime. However, the Act, intended to regulate the annual expenditure of billions of rands of public money on service delivery, was never actually implemented.

The unanimous ruling by the ConCourt effectively scraps the Public Procurement Act 2024 from the law books, rendering it invalid. The court's primary finding was that Parliament had failed in its fundamental constitutional obligation to facilitate meaningful public participation during the legislative process. Evidence presented suggested the bill had been rushed through various parliamentary stages, with the court noting that while no explicit reason for this haste was provided, records indicated a possible motivation was to pass the bill before the 2024 national elections.

Acting Justice Lister Nuku, in delivering the judgment, highlighted severe deficiencies in the parliamentary public participation process. While acknowledging that timeline protocols are not strictly binding on Parliament, he stressed that any deviation from them requires a clear explanation. Submissions from the investigative journalism unit amaBhungane, a key applicant in the amaBhungane procurement challenge, revealed that the public was afforded a mere four hours to assess substantial changes to the bill, including a completely reworked Chapter Four, and then only two minutes each to present their cases.

Justice Nuku found this timeframe unreasonable, particularly given the bill's importance and the extensive nature of the amendments to Chapter Four. This new chapter significantly altered the procurement landscape, shifting from a permissive, enabling framework to a more prescriptive one that introduced mandatory qualification criteria, potentially leading to the routine exclusion of bidders as a matter of law. The court concluded that Parliament offered no satisfactory justification for such a truncated timeline for public engagement, which severely hampered stakeholders' ability to meaningfully engage with the Public Procurement Act and voice their concerns.

The applicants, which included the Premier of the Western Cape Government, the City of Cape Town, and trade union Solidarity alongside amaBhungane, raised several issues, but the court primarily focused on the last-minute amendments made without prior consultation, the severely truncated timelines for submissions, and the National Treasury's admission that it could not consider all submissions due to time constraints. The City of Cape Town, for instance, had expressed concerns that the new Act would create excessive "red tape," potentially hampering municipalities' ability to swiftly address urgent issues like water, sanitation, electrical, waste, and environmental problems.

Respondents, including the Speaker of the National Assembly, the Chair of the National Council of Provinces, and the Minister of Finance, argued that the content of the new Chapter Four was merely an elaboration of provisions foreshadowed in the old chapter. They also contended that regulations promulgated in 2017 under the Preferential Procurement Policy Framework Act (PPPFA) contained fundamentally similar concepts, which had been developed through extensive research and consultation. However, the court found these arguments "untenable," asserting that the new chapter introduced novel mechanisms and categories that raised complex constitutional, economic, and practical considerations regarding competitiveness, fairness, and cost-effectiveness. These issues were deemed material enough to warrant additional public participation in Parliament. Justice Nuku further noted that the 2017 regulations themselves had previously been declared unlawful, undermining the respondents' defense.

The ConCourt Public Procurement Act struck down ruling means that the South Africa Public Procurement Act is now invalid, leaving the country's government procurement law in its previously fragmented state. This outcome ensures that the existing patchwork of procurement legislation remains applicable, rather than the consolidated framework envisioned by the invalidated Act. The decision serves as a powerful reinforcement of the constitutional imperative for meaningful public participation in all legislative processes.

This landmark decision underscores the critical importance of meaningful public participation in South African legislative processes, setting a significant precedent for future lawmaking. It sends a clear message that legislative haste, even if politically motivated, cannot override constitutional duties to ensure robust public engagement. For lawyers and compliance officers, this means the anticipated unified procurement framework will not materialize, and adherence to the current, diverse set of regulations remains paramount.

Lawyers and compliance officers should note that the Public Procurement Act 2024 is not in force, meaning the existing fragmented procurement legal framework remains applicable. This ruling reinforces the critical importance of meaningful public participation in South African legislative processes, setting a precedent for future challenges to new laws.

Source: Reporting based on original coverage.