Preferential Procurement Regulations revised by Treasury

14717299_1285654774818921_9166014725803891467_nNational Treasury has revised the Preferential Procurement Regulations, 2017, which were gazetted on 20 January 2017. According to the National Treasury, the regulations were initially promulgated in 2001 and revised in 2011, making this the second revision since the initial promulgation. “The revision of the Preferential Procurement Regulations of 2011 was largely influenced by the need to provide for a mechanism to empower categories such as small medium and micro enterprises (SMMEs), co-operatives, township and rural enterprises, all of this through procurement,” said Treasury in a statement on Monday.

“To this end, the commitment made by government was to leverage public procurement. “The revised regulations are also aligned to President Jacob Zuma’s pronouncement in his 2015 State of the Nation Address, where he said that government will set aside 30% of the appropriate categories of State procurement for purchasing from entities prescribed above,” Treasury said.

Finance Minister Pravin Gordhan said the regulations aim to use public procurement as a lever to promote socio-economic transformation, empowerment of small enterprises, rural and township enterprises, designated groups and local industrial development. This, he said, is in line with the current dialogue on inclusive economic growth in South Africa.

Some of the revisions include, introducing the prequalification criteria that allow the advancement of these selected categories of people by limiting competition only amongst themselves, addressing the outcry of the categorised groups who felt that the threshold of R1 million is too insignificant for them to grow to a level of established companies. “While not all comments and suggestions could be incorporated in the final set of regulations, they did provide valuable insight and assistance in finalising the regulations,” said Minister Gordhan.

The Black Business Council’s President, Dr Danisa Baloyi, said efforts to accelerate economic transformation had regressed since the global financial crisis in 2008. One of the levers government has used to achieve transformation is through procurement. “Allowing small black businesses to take part in big projects will allow the economic benefits to be shared throughout the value chain of the project where these businesses are involved”, she said.

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