Senior attorney Verlie Oosthuizen has spoken out about the abuse of South Africa's 30% procurement policy, which was meant to help smaller, previously disadvantaged businesses get a share of government contracts. The policy was started with the goal of changing the dynamics of who was getting government work, but Oosthuizen says it has been hijacked by criminals and politically connected individuals. These individuals are making money without doing much work, she says.
Oosthuizen explained that the policy was initially well-intentioned, aiming to address the historical imbalance in government contracts. However, it has become an opportunity for organized crime groups and politically connected people to benefit from lucrative government contracts. In some cases, businesses are awarded contracts despite having little evidence of the skills or resources needed to deliver. Oosthuizen described cases she has dealt with where companies had been awarded contracts despite being ill-equipped to fulfill them.
In one instance, Oosthuizen said a company had set up an office in a container with virtually nothing inside. The company's tender department was allegedly controlled by a person who was getting money from someone within a shadow state setup. This kind of setup allows criminals to control how contracts and tenders are awarded, often in local communities. Oosthuizen described this situation as "fairly terrifying."
The problem, Oosthuizen argues, is that many people treat Broad-Based Black Economic Empowerment (BBBEE) requirements as a box-ticking exercise. As long as people are not really engaging with what it means to empower people, there will be space for criminals to come through. Oosthuizen emphasized that having rules and actually following them are two very different things. Government procurement processes are supposed to involve checks and documentation for businesses given tenders.
Oosthuizen's comments come as South Africa's government procurement processes face scrutiny. The Public Procurement Bill and Public Procurement Act aim to regulate government tenders, but their effectiveness are being questioned. The Constitutional Court recently struck down the government's Public Procurement Act over public participation failure. This has raised concerns about the government's ability to manage procurement processes effectively.
The issue of dodgy government tenders is also linked to corruption and the abuse of power. Oosthuizen said that as long as people are doing it as a tick-box exercise, without checking whether people have the skills to fulfill projects, these kinds of situations can develop. This leaves space for criminals and allows them to control how contracts and tenders are awarded.
The South African government needs to start enforcing existing laws to prevent dodgy government tenders, Oosthuizen said. This requires a more nuanced approach to procurement, one that prioritizes empowerment and checks and balances. The government needs to ensure that procurement processes are transparent and fair, and that businesses are held accountable for their actions.
Key points
- The abuse of South Africa's 30% procurement policy has led to organized crime groups and politically connected individuals benefiting from lucrative government contracts.
- The policy was initially well-intentioned, aiming to address the historical imbalance in government contracts, but has been hijacked by those seeking to exploit it.
- Effective enforcement of existing laws is necessary to prevent dodgy government tenders and ensure that procurement processes are transparent and fair.
