South Africa: Draft public procurement regulations met with criticism and constitutional uncertainty

South Africa's public procurement system sits at the centre of the state's ability to deliver services, develop infrastructure and achieve broader socio-economic objectives. It is therefore unsurprising that the publication of two sets of draft regulations under the Public Procurement Act, 2024 (the Act) earlier this year, generated significant interest and engagement from both the public and private sectors.

The public comment period on the Draft General Public Procurement Regulations, 2026 and the Draft Public Procurement Tribunal Regulations, 2026 has now closed. The consultation process represents an important milestone in giving practical effect to the Act and provides National Treasury with an opportunity to consider a wide range of views before finalising what will become the foundation of South Africa's new procurement framework.

At a high level, the objectives of the reforms are difficult to dispute. Greater transparency, more consistent procurement practices, improved accountability and better dispute-resolution mechanisms are all important features of a modern procurement system. The discussion generated during the consultation period has therefore been less about whether reform is needed and more about how best to achieve it.

The promise of a specialised procurement tribunal

One of the most notable features of the new framework is the establishment of the Public Procurement Tribunal.

For many years, procurement disputes have frequently found their way to the courts, often resulting in lengthy and costly litigation. The introduction of a specialist tribunal has the potential to improve both the speed and consistency of procurement dispute resolution. It may also contribute to the development of a coherent body of procurement jurisprudence and provide procuring institutions and bidders with greater certainty regarding the application of the Act.

The Tribunal's ultimate success, however, will depend on more than the appointment of suitably qualified members. It will require a clear procedural framework, adequate administrative support and governance arrangements that promote confidence in its independence and effectiveness. Questions raised during the consultation process regarding appointment procedures, operational readiness, publication of decisions and transitional arrangements should be viewed in this context. They reflect a desire to ensure that the Tribunal is fully equipped to perform its intended role from the date it becomes operational.

If implemented effectively, the Tribunal may prove to be one of the most significant and lasting institutional reforms introduced by the Act.

Striking the right balance in the General Regulations

The Draft General Regulations seek to introduce a unified procurement framework applicable across a diverse range of public institutions. That is an ambitious task.

South Africa's procurement landscape includes national departments, municipalities, state-owned entities, implementing agents and specialised institutions that operate in very different environments and procure vastly different categories of goods, services and infrastructure. Creating a regulatory framework capable of providing consistency while remaining sufficiently flexible to accommodate these differences is therefore a complex exercise.

One of the recurring themes emerging from the consultation process is the need to strike the right balance between national regulation and institutional autonomy. The Act itself establishes a national framework while recognising that procuring institutions must continue to exercise discretion in designing and implementing procurement systems appropriate to their particular circumstances. The challenge for policymakers lies in ensuring that the regulations provide clear guidance without unintentionally constraining legitimate operational decision-making.

Clarifying procurement methods and evaluation criteria

A number of stakeholders have identified the interaction between procurement methods, evaluation criteria and bid-scoring mechanisms as an area where additional clarity may be helpful.

Procurement methods and evaluation methodologies are closely linked. To operate effectively, institutions and bidders need to understand how procurement processes are intended to function from beginning to end. Where multiple provisions address overlapping aspects of evaluation, uncertainty can arise regarding how the various components fit together and how procurement decisions should ultimately be made.

Particular attention has been directed at the relationship between regulations 24 and 25 and the bid evaluation matrix contained in Annexure 1. As currently drafted, the framework appears to require bidders to achieve a minimum 70% threshold against certain criteria before progressing through the evaluation process. At the same time, the regulations permit significant flexibility in allocating weightings between price, functionality, capability and preference considerations. Further clarification of how these provisions are intended to operate together would assist both procuring institutions and bidders.

The objective should not necessarily be to prescribe a single approach applicable in every procurement environment, but rather to ensure that the framework is coherent, transparent and capable of consistent application.

The debate around preferential procurement

Perhaps the most significant discussion generated by the draft regulations concerns the provisions dealing with preferential procurement.

Transformation remains a central objective of South Africa's procurement framework, and the draft regulations seek to advance that objective through measures including set-asides, prequalification criteria and subcontracting requirements. These measures reflect a policy choice aimed at broadening economic participation and supporting historically disadvantaged enterprises.

At the same time, commentators from across the spectrum have raised important questions regarding implementation. Some have expressed concerns that highly prescriptive eligibility requirements and set-aside mechanisms may reduce competition in certain sectors, particularly where the pool of qualifying suppliers is limited. Others have noted that institutions with varying levels of procurement capacity may find some of the requirements challenging to administer consistently.

The set-aside provisions have attracted particular attention. Questions have been raised regarding how institutions will determine whether sufficient qualifying suppliers exist, how annual procurement targets should be measured and how overlapping beneficiary categories should be treated. These are not simply technical issues. They go to the practical functioning of the regime and its ability to achieve transformation objectives while maintaining competition, value for money and efficient procurement outcomes.

More broadly, the public debate has highlighted an important policy question: how best to advance transformation while preserving the benefits that flow from competitive procurement. That conversation is likely to continue long after the regulations are finalised.

Implementation will be critical

Another theme emerging from the consultation process is the importance of implementation.

The draft regulations introduce substantial reforms affecting procurement planning, evaluation, infrastructure procurement, governance arrangements and reporting obligations. Whatever form the final regulations take, successful implementation will require institutions to update policies, systems and governance structures and to build the necessary administrative capacity.

Procurement reform is often judged by the quality of the regulatory framework. Equally important, however, is the ability of institutions to implement that framework effectively in practice. A well-designed implementation process may therefore prove just as important as the content of the regulations themselves.

Looking ahead

The close of the public comment period marks the beginning of the next phase of the reform process. National Treasury now has the opportunity to consider a substantial body of stakeholder feedback and to refine the regulations before promulgation. The consultation process has highlighted areas where clarification, simplification or further guidance may improve the operation of the framework without detracting from its underlying objectives.

The broader direction of travel is clear. South Africa is moving towards a more structured and comprehensive procurement regime. The challenge will be ensuring that the final framework promotes accountability and transformation while remaining practical, flexible and capable of supporting effective service delivery. If that balance can be achieved, the new procurement framework will represent a significant step forward for public procurement in South Africa.