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The Black Business Federation (BBF) is planning a legal challenge to the National Treasury's newly released draft Preferential Public Procurement Framework guidelines, saying that the draft guidelines leave black South Africans and their businesses at a disadvantage when bidding for government tenders.
National Treasury released updated tender regulations in terms of the Preferential Public Procurement Framework Act (PPPFA) two weeks ago, ending the uncertainty after government put tenders on hold in mid-February.
The Constitutional Court had dismissed an appeal by Finance Minister Enoch Godongwana to overturn an earlier court judgment that set aside regulations signed off in 2017, after Afribusiness NPC brought a legal challenge, arguing that the 2017 regulations were unfair to white South Africans and their businesses.
National Treasury's draft regulations – released pending clarity from the Constitutional Court on its ruling – bring procurement back in line with the system that existed before 2017, which proposes an 80/20 BEE preference point system for the acquisition of goods with a value of up to R50 million and a 90/10 BEE preference points system for goods valued higher than R50 million.
READ | Treasury releases new public procurement rules after tender suspension imbroglio
BBF president Malusi Zondi told Fin24 that the business lobby group was consulting with its legal advisors on a challenge to the Constitutional Court's dismissal of the finance minister's appeal.
Zondi said the draft "seriously disadvantaged" small black businesses when compared with big corporations, whereas the previous regulations set aside a percentage ring-fenced for local and small black businesses.
"The Black Business Federation has decided to organise a team of procurement and legal experts to examine the judgment and provide us with well-informed advice, after which we will proceed in challenging the constitutional court judgment in a well-guided manner," said Zondi.
READ | Transnet, Eskom seek procurement rules exemption from National Treasury, MPs told
"Black Business Federation recommends that the National Treasury should support small businesses, particularly those that are owned by Africans, by aligning the Act with the regulations through constitutional procedures so that the recent regulations rendered are being corrected through the right channels so that they can be reinstated and achieve their intended objectives," Zondi said.
Zondi said the foundation would also establish a task team of procurement and legal professionals to formulate a comprehensive action plan towards the adoption of the draft Public Procurement Bill.
The federation said in a statement that the procurement process remained fragmented and hindered by inadequate planning a lack of coherence between "demand planning and budget alignment".
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