The Public Procurement Act 28 of 2024 is signed but not yet in force. However, the Constitutional Court is yet to rule on a challenge by the Western Cape Government, the City of Cape Town and amaBhungane. They argue that Parliament failed to facilitate reasonable public participation on material amendments, as required by section 59(1)(a) of the Constitution. That judgment is still pending.
On 16 April 2026, the National Treasury published the draft General Public Procurement Regulations, 2026 (the Regulations), and the draft Public Procurement Tribunal Regulations, 2026, for public comment. The comment period was extended to 15 July 2026. This extension reflects the breadth of what was being proposed.
The new evaluation model
South Africa is in the midst of one of the most significant reforms of its public procurement framework since democracy. Whatever the court decides, these regulations signal the direction of travel. Therefore, businesses that bid for government work should start paying attention now.
The most material shift lies in how authorities will evaluate bids. Under the current system, price drives the outcome. A bidder offering the lowest price will often prevail, provided it meets the basic threshold requirements and scores sufficient preference points. However, the proposed framework signals that price is losing its primacy in procurement decisions.
Regulation 25 establishes a mandatory threshold-based model that departs materially from the current system. Procuring institutions must now assign weight across four criteria: capability and capacity to deliver, functionality and technical requirements, preference, and price. The first three criteria are each subject to a mandatory minimum threshold of 70%. A bidder who fails any one of these thresholds is excluded before officials even consider price. This confirms that price is losing its primacy as the dominant factor in public procurement.
For contracts below R20 million, Regulation 56 requires procuring institutions to reserve certain procurement exclusively for identified categories of persons. These include black people, black women, women, persons with disabilities, military veterans, youth and small enterprises within a particular geographical area. However, the bidder must demonstrate 100% ownership by the qualifying category.
Where no qualifying bids are received, the procuring institution must re-advertise the bid or proceed without preferential procurement. Before doing so, it must make reasonable efforts and report the matter to the Public Procurement Office and the relevant provincial treasury.
Expanded transformation and subcontracting requirements
For contracts of R100 million and above, successful bidders must subcontract at least 25% of the total contract value to enterprises that South African citizens own 100%.
Draft Regulation 64(6) introduces a direct payment mechanism. If a supplier defaults on payment to a subcontractor, the procuring institution may pay the subcontractor directly. It may then deduct that amount from what it owes the supplier. This mechanism provides meaningful protection for smaller businesses that have historically faced delayed or defaulted payments from main contractors. However, it also introduces a new layer of financial risk for suppliers.
Regulation 60 adds a retrospective eligibility requirement. To qualify under section 18, bidders must show that they spent at least 40% of their previous procurement expenditure on enterprises that are at least 51% owned and managed by black people. They must also provide proof of that compliance. As a result, past procurement behaviour, rather than only a current B-BBEE certificate, now forms part of eligibility. Together with the new evaluation framework, these requirements reinforce that price is losing its primacy in favour of broader transformation and delivery objectives.
One significant tension remains unresolved. The regulations seek to advance transparency and redress. At the same time, they add layers of threshold compliance, documentation, and risk allocation. Consequently, these additional requirements will likely lengthen procurement timelines. This will particularly affect relatively small bidders that lack dedicated compliance resources. Whether this trade-off is justified is, in part, what the public comment process aims to determine.
The constitutional question mark
The current constitutional challenge is procedural. It targets how Parliament passed the Act, not what the Act does. If the challenge succeeds, the court would send the Act back to Parliament for proper public participation. It would not completely bury the reform agenda.
Whatever the Constitutional Court decides, the policy instinct behind the legislation remains clear. Tighter entry controls, traceable transactions and accountability for how preference is actually delivered are unlikely to disappear.
For now, businesses that bid for government work would do well to start mapping their current B-BBEE spend and subcontracting arrangements against the new thresholds. In addition, they should review their compliance systems and procurement practices before the framework takes effect. The public comment window closed on 15 July 2026.
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| Sarah Moerane | Director | mail me | | Amogelang Magano | Senior Associate | mail me | |
| | Werksmans Attorneys | | |
