Treasury concedes to Sakeliga: organs of state may proceed with procurement

4 March 2022

The Director-General of the National Treasury, Dondo Mogajane, today conceded to Sakeliga that his circular to organs of state regarding continued BEE prerequirements and stopping tenders was not binding.

This comes after a countrywide crisis was looming over the past couple of days in which virtually all government tender processes would grind to a halt because of a circular issued by Mogajane on 25 February. Organs of state have interpreted Mogajane’s circular as an instruction not to advertise new tenders and also as allowing them to apply BEE prerequirements to tenders that have already been advertised.

This week, Sakeliga pointed out to Mogajane that he did not have the authority to give such instructions to organs of state and that organs of state acting in accordance with Mogajane’s circular would render themselves liable to litigation. There is no reason for the advertising or awarding of tenders to be suspended, provided it is done within the ambit of the Preferential Procurement Policy Framework Act (PPPFA) and, consequently, no BEE prerequirements are imposed.

Sakeliga warned that National Treasury was creating a semblance of lawfulness for the continued application of BEE-based predisqualification of tenders. This while the Constitutional Court now has finally confirmed the invalidity of the BEE-based predisqualification in terms of the 2017 regulations of the Minister of Finance.

Today’s letter by the Director-General to Sakeliga has removed the need for urgent litigation and means that government institutions may now proceed with procurement, regardless of National Treasury’s view of the judgment in favour of Sakeliga handed down by the Constitutional Court on 16 February.

Regarding the Minister’s regulatory role and the internal policies of organs of state, Sakeliga still intends to ensure that the Constitutional Court’s judgment on 16 February – the first major roll-back of BEE by the Constitutional Court – will be honoured. Sakeliga is on standby to resort to litigation again should there be attempts by National Treasury or other government institutions to sidestep the court’s judgment.

Issued by Piet le Roux, CEO, Sakeliga, 4 March 2022