The invalidity of all the regulations under the procurement act causes serious uncertainty
In September 2020 the Supreme Court of Appeal declared that the preferential procurement regulations issued by the finance minister in 2017 were invalid. The minister appealed against this decision to the Constitutional Court, which upheld the SCA decision in a judgment handed down on February 16 2022.
The PPPFA provides that tenders must first be assessed in terms of a preference point system where price is the dominant basis on which procurement decisions must be made. It provides that at least 80 out of 100 points must be allocated based on price for tenders between R30,000 and up to R50m, and at least 90 out of 100 points must be allocated based on price for tenders over R50m. The remaining points may take non-price considerations like BBBEE into account.
Because of the interconnectedness of the regulations, the SCA declared them invalid in their entirety . However, this order was suspended for 12 months from the date of the order to allow the finance minister time to remedy the defects.
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