ISS Analysis

Public procurement is one of the principal ways in which the state converts public resources into services, infrastructure and goods. Its effectiveness directly affects healthcare, education, policing, infrastructure, municipal services and other public functions.

It is also one of the areas of government most exposed to corruption, patronage and waste. The State Capture Commission documented how procurement processes were manipulated to divert public resources, favour connected suppliers and weaken institutional controls. President Ramaphosa subsequently identified procurement abuse as one of the principal mechanisms through which public resources were diverted during state capture.

A credible procurement framework therefore matters for more than administrative efficiency. It must make procurement decisions easier to scrutinise, reduce opportunities for manipulation, strengthen accountability and enable meaningful consequences for misconduct, while allowing public institutions to purchase what they need efficiently.

Procurement also has an important constitutional role in advancing transformation. Section 217 of the Constitution requires public procurement systems to be fair, equitable, transparent, competitive and cost-effective, while permitting procurement policies that provide preferences for categories of persons disadvantaged by unfair discrimination.

The Constitutional Court judgment adds another constitutional dimension. Procurement legislation must not only comply substantively with constitutional requirements. Parliament must also enact it through a legislative process that allows meaningful public participation.

The immediate future legislative model is not yet settled.

Before the Constitutional Court judgment, Act 28 of 2024 provided the intended foundation of the new system. It established the Public Procurement Office within National Treasury, provided a common framework for procurement and preferential procurement, established mechanisms for debarment and exclusion of suppliers and created a Public Procurement Tribunal.

The draft General Public Procurement Regulations were intended to provide much of the operational detail. Separate draft Tribunal Regulations dealt with matters including Tribunal fees, security vetting and appointment procedures for Tribunal members and a code of conduct.

Following the Constitutional Court judgment, government and Parliament must determine how the reform should proceed. Finance Minister Enoch Godongwana has confirmed that government remains committed to procurement reform but has not yet announced whether substantially similar legislation will be reintroduced, whether the existing policy model will first be revised or what timetable will apply.

Several 2026 amendment initiatives also require reconsideration.

Public Procurement Amendment Bill B22-2026 is a private member’s bill introduced in August 2026. It proposes substantial changes to the framework that had been established by Act 28 of 2024, including changes to set-asides, prequalification criteria, compulsory subcontracting, designated sectors for local production and content, sustainable development provisions, debarment, Tribunal membership, national security exemptions and parliamentary scrutiny of regulations. It also proposes repeal of the Broad-Based Black Economic Empowerment Act with consequential arrangements. The earlier B7-2026 contained substantially the same amendment programme but was withdrawn.

Public Procurement Second Amendment Bill B9-2026 is another private member’s bill. It proposes a statutory mechanism for whistleblower disclosures relating to procurement infringements or offences, potential financial rewards where disclosures lead to recovery of state funds, new offences, increased penalties and provision for private prosecutions.

The government’s General Finance Laws Amendment Bill B21-2026 contains a considerably narrower procurement amendment concerning the timeframe within which the Minister must review implementation of the Public Procurement Act, make the review public and report to Parliament.

Because the principal Act has now been declared invalid, the future treatment of all three initiatives will need to be clarified.

• Lead institution: National Treasury.
• Political lead: Minister of Finance.
• Legislative actor: Parliament, particularly the Standing Committee on Finance and the relevant National Council of Provinces structures responsible for processing future procurement legislation and facilitating public participation.
• Principal implementation structures envisaged by the invalidated Act: Public Procurement Office and Public Procurement Tribunal. Their future statutory basis now depends on replacement legislation or another lawful legislative arrangement.
• Procuring institutions: National and provincial departments, municipalities and municipal entities, constitutional institutions and public entities operating under the existing procurement framework.
• Oversight institutions: Parliament, provincial legislatures, Auditor-General and relevant treasury structures.
• Constitutional actor: Constitutional Court, whose 17 September 2026 judgment invalidated the Public Procurement Act because of defects in the parliamentary public participation process.
• Other influential actors: Business organisations, professional bodies, civil society organisations, organised labour, suppliers and organisations concerned with transformation, industrial policy, procurement integrity and open government.

• Restoring a legislative foundation: Government and Parliament must determine how to replace the invalidated Act and whether to retain, revise or substantially reconsider its policy architecture.
• Constitutionally compliant public participation: Any replacement legislation must be subjected to a reasonable and meaningful public participation process, including renewed consultation where material amendments are made.
• Managing the interim framework: Procurement must continue under the existing legal and regulatory arrangements while the replacement reform process is developed.
• Preserving useful implementation work: National Treasury must determine which regulatory, institutional, digital and technical preparations undertaken for Act 28 of 2024 can lawfully continue or be adapted for replacement legislation.
• Legislative coherence: The future of B22-2026, B9-2026 and the procurement provisions in B21-2026 must be reconsidered following invalidation of the statute they seek to amend.
• Balancing competing procurement objectives: Future legislation must reconcile value for money and competition with transformation, localisation, industrial policy, support for smaller businesses and other developmental objectives.
• Institutional capacity: A new statutory framework will not by itself remove substantial differences in procurement capability across national departments, public entities, provinces and municipalities.
• Digital implementation: Treasury’s end-to-end electronic procurement programme could materially improve transparency and oversight, but its legal, institutional and technical relationship with the future statutory framework will require clarification.
• Integrity and enforcement: Any replacement framework will need effective transparency, debarment, oversight and enforcement mechanisms capable of identifying procurement misconduct and imposing meaningful consequences.

• Publication of the full implications of government and Parliament’s response to the Constitutional Court judgment.
• The legislative route selected to replace or revive the procurement reform programme.
• Whether government reintroduces substantially the same procurement framework or revises important policy choices before doing so.
• The timetable and design of a renewed parliamentary public participation process.
• The future status of the draft General Public Procurement Regulations and Public Procurement Tribunal Regulations.
• The future of the proposed Public Procurement Office and Public Procurement Tribunal.
• Progress or reconsideration of Public Procurement Amendment Bill B22-2026 and Public Procurement Second Amendment Bill B9-2026.
• The treatment of the procurement amendment contained in General Finance Laws Amendment Bill B21-2026.
• Whether substantive constitutional objections not determined in the September judgment re-emerge during the replacement legislative process.
• Continuation of National Treasury’s end-to-end electronic procurement programme and other procurement modernisation initiatives.
• Whether replacement legislation strengthens transparency, procurement data disclosure, conflict of interest controls, debarment and other anti-corruption safeguards.

The Constitutional Court judgment fundamentally changes the immediate outlook for public procurement reform. Before 17 September 2026, implementation had progressed from enactment towards operational design. Draft regulations had been published, National Treasury was preparing the Public Procurement Office and Public Procurement Tribunal, and electronic procurement systems were being developed. The principal uncertainty was when and how the Act would commence.

That position no longer applies. The Act has been declared unconstitutional and invalid, and government must restore a lawful legislative foundation before the statutory model it created can be implemented.

The setback need not end the procurement reform programme. Finance Minister Enoch Godongwana has already reaffirmed government’s commitment to procurement reform. Much of the policy and technical work undertaken since 2020 could potentially inform replacement legislation. The judgment nevertheless means that Parliament must undertake a constitutionally compliant process and may create an opportunity for renewed consideration of contested aspects of the framework.

For anti-corruption purposes, the central question remains whether the eventual system improves transparency and accountability in practice. Formal consolidation of procurement law will have limited value unless procurement information becomes easier to access and analyse, conflicts and hidden interests are identified earlier, problematic suppliers can be excluded effectively, review mechanisms work promptly and public institutions acquire the professional and technical capacity to procure efficiently.

The immediate test is therefore whether government and Parliament can respond to the Constitutional Court judgment without allowing procurement reform to stall, while using the renewed legislative process to improve both the constitutional legitimacy and substantive quality of the future framework.