The Democratic Alliance (DA) has welcomed the decision by the Supreme Court of Appeal (SCA) to set aside and declare invalid the 2017 Preferential Procurement Regulations.
The appeal case brought forward by a non-profit organization, Sakeliga.
In a statement on Wednesday, DA MP Geordin Hill-Lewis described the court ruling as “a victory against BEE corruption”.
Hill-Lewis said the DA believed that the BEE pre-qualification criteria application was “one of the biggest drivers of corruption in public procurement”.
“The judgment will help to combat corruption and end the uncompetitive exclusion of suppliers,” he said.
The SCA found that the minister of finance at the time – Pravin Gordhan – had acted illegal and exceeded his powers when he used section 5 of the Preferential Procurement Policy Framework to introduce the Preferential Procurement Regulations of 2017.
The regulations were therefore declared invalid as a result of their inconsistency with the provisions of the procurement policy framework.
Hill-Lewis said the party believed that the judgment would have “far-reaching” consequences for public procurement as it would cast doubt on the continued use of BEE pre-qualification criteria.
He further argued that business owners had been denied the opportunity to do business with the government because of the requirement to meet a pre-determined threshold of BEE scores.
“In addition to engendering exclusion, the use of pre-qualifying criteria has in the past resulted in the arbitrary application of BEE criteria, inflation of prices from the limited pool of suppliers, and corruption.
“Some suppliers have continued to use BEE’s exclusion criteria to constantly benefit from government tenders whilst denying access to new entrants,” he continued to say.
Hill-Lewis added that the DA would continue to ensure that public procurement was “transparent, corruption-free, competitive, and respectful of public money”.
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