National Treasury moved closer to seeing the Public Procurement Bill become law after the draft legislation, aimed at regulating a fragmented and complex tender system, was tabled in Parliament earlier this week.
Treasury’s acting director-general Ismail Momoniat told Parliament the current public procurement system was too decentralised.
They wanted to establish a single regulatory system, with a single point of authority in a Public Procurement Office.
Momoniat said the current system was also open to massive corruption.
“We want to establish a single regulatory system, not a fragmented one, and a single oversight authority – the Public Procurement Office of the Chief Procurement Officer, with jurisdiction over the entire public procurement system, and this includes entities that fall under both the Public Finance Management Act and the Municipal Finance Management Act,” he said.
Momoniat also told members of Parliament’s standing committee on finance there was currently a lack of transparency in the system.
The bill, once it became law, was intended to not only improve transparency, but compel parties to adhere to it.
“We will compel reporting on various aspects of the procurement system. Chair, you heard about the murder of Babita Deokaran. We had to read in the papers what was happening. Our system is not automated. We don’t get that information unless you go and look for that information in the system,” he said.
Deokaran was a Gauteng senior health official who was killed outside her home in Johannesburg in 2021. Six men are in court for her murder.
She had raised red flags about tenders that were awarded in hospitals.
Momoniat said anyone could register five or 10 companies in the system by three individuals, and the next day they get a tender.
“If the data transparency is out there, there can be more red flags,” he said.
Treasury’s aim was to fix the public procurement system to avoid all such problems.
The National Procurement Bill took a strategic approach towards how public procurement is conducted.
Momoniat said the public procurement system was currently not working for a number of reasons.
He said this had rendered government unable to deliver services effectively and efficiently.
“That is what we want to fix. We want to fix the procurement system. It’s been abused, it’s opaque and it’s prone to massive corruption at the moment. Many goods and services are overpriced. That is the problem. We pay too much and we have scarce resources. To pay two or three times the price is really making it impossible for the state to maximise its ability to deliver,” said Momoniat.
The system was also too decentralised.
“Our system is too highly decentralised. It’s delegated to tens of thousands of divisions, field officers, schools, hospitals, hundreds of thousands of registered suppliers entering over two million transactions annually,” said Momoniat.
The system was also not flexible. Treasury wanted to create a single point of authority to deal with all the problems in the public procurement system.