This could cost the firm hundreds of millions of rand a year.
Scopa said it would create problems for KPMG if it bids for state work while a cloud was hanging over its head.
KPMG was paid hundreds of millions of rand from state contracts in the past three years. This year, it received R577million; last year government departments and entities paid it R485m and the year before the state paid the firm R456m.
The firm came under fire in Parliament on Thursday for failing to respond to the red flags while doing work for the Guptas over 14 years.
It audited 35 companies belonging to the Guptas.
The auditing firm was also roasted for creating a crisis in the country with its Sars rogue unit report, which implicated former finance minister Pravin Gordhan.
But KPMG promised to come clean on all it has done and believes various investigations, including an independent inquiry, would shed light on what happened.
KPMG’s acting chairperson Gary Pickering and its chief executive Nhlamu Dlomu tried to defend some of the firm’s decisions.
When asked by DA MP David Maynier if it would consider not bidding for government contracts until all the investigations had been completed, Dlomu said they would consider the proposal.
“We have no evidence on risk. We are open to considering your suggestion and we will reflect on it,” Dlomu said.
Parliament fired KPMG as the auditors of its medical aid scheme.
Finance Minister Malusi Gigaba also instructed the government to review all the work carried out by KPMG over the past few years.
Scopa chairperson Themba Godi asked KPMG to co-operate with the Independent Regulatory Board for Auditors (IRBA) on its investigation.
He also called for the firm to stop tendering for state contracts until all the investigations had been completed.
“Regarding the independent investigator you want to appoint, it is important for the public to know your time-frames and not to tender for public work until you have cleared your name.
“With this hanging over your head, it creates problems,” said Godi.
Pickering and Dlomu also denied that they have not been co-operating with the IRBA.
Pickering said they had issues with the IRBA over its jurisdictions in the handing over of some documents.