Most countries have public procurement laws that set out the rules and processes to be followed for all forms of state procurement. Public procurement is generally known to be the acquisition of goods and services by the government from the private sector and is underpinned by Section 217 of the Constitution.
Section 217 and the Preferential Procurement Policy Framework Act 5 of 2000 (PPPFA), the regulations published under it in 2011 (PPPFA Regulations) and locally the Local Government: Municipal Finance Management Act 56 of 2003 (MFMA) prescribe requirements regarding state tenders to be in accordance with a system which is fair, equitable, transparent, competitive and cost-effective.
The Preferential Procurement Policy Framework Act 5 of 2000 (PPPFA) also prescribes the framework within which procurement policies may be implemented. Procurement law further includes Treasury Directives and legislation pertaining to black economic empowerment and administrative law.
Given the amounts allocated for State infrastructure projects, tendering for government and SOE services and assets has been fertile ground for litigation, with considerable financial interest at stake.