The Finance Bill 2017 seeks to amend the Public Procurement and Asset Disposal Act, 2015 (the "PPADA") to provide for a new method of public procurement referred to as Specially Permitted Procurement.  The procurement methods currently available under the PPADA include open tender, two-stage tendering, design competition, restricted tendering, direct procurement, request for quotations, electronic reverse auction, low value procurement, force account, competitive negotiations, request for proposals and framework agreements. 

The proposed amendment seeks to allow the use of a procurement procedure specially permitted by the National Treasury in the following circumstances:

(i)Where exceptional requirements make it impossible, impracticable or uneconomical to comply with the PPADA and the Regulations made thereunder;

(ii)Where the market conditions or behavior do not allow effective application of the PPADA and the Regulations;

(iii)For specialized or particular requirements which are regulated or governed by harmonized international standards or practices;

(iv)Where strategic partnership sourcing is applied;

(v)Where credit financing procurement is applied; or

(vi)In such other circumstances as may be prescribed.

Some of the circumstances envisaged above – in particular, (i) and (ii), allow for extremely wide interpretation and could be used to circumvent the existing framework under the PPADA, if appropriate checks and balances are not put in place.  The proposed amendment empowers the Cabinet Secretary, National Treasury to prescribe procedures for carrying out Specially Permitted Procurements and such procedures, if prescribed, would provide more clarity on the use of this procurement method.   

We shall provide a further update in case of any significant development in this matter