Notice to Introduce - Public Procurement Amendment Bill (PMB) (Mr G. Michalakis DA)

South Africa currently has a public procurement system — meaning the rules that govern how government buys goods and services — that is shaped by two main pieces of law. The first is the Public Procurement Act (the principal Act), which sets out how government institutions must go about spending public money on contracts. The second is the Broad-Based Black Economic Empowerment Act (BBBEE Act), which requires that race-based criteria be used in deciding who gets government contracts, as a way of correcting the economic inequalities caused by apartheid.

Section 217 of the South African Constitution requires that government procurement be fair, equitable, transparent, competitive, and cost-effective. However, section 217(2) of the Constitution also allows for procurement policies that advance certain categories of people or address past disadvantage. The current system uses tools like set-asides (reserving certain contracts exclusively for specific groups), prequalification criteria (requiring bidders to meet race-based standards before they can even compete), and subcontracting conditions (forcing winning bidders to bring in certain partners) to give effect to these preferential policies. There are also rules that designate certain industries where local production must be used. This framework has been in place for many years and is central to how transformation policy has been implemented in government spending.

Government departments, municipalities, state-owned entities, and any other institution that spends public money on contracts (collectively called 'procuring institutions') would be directly affected, as they would need to overhaul the policies they use to choose suppliers and award contracts.

Businesses and suppliers that currently benefit from preferential procurement — particularly Black-owned businesses, women-owned businesses, and businesses owned by people with disabilities — would be significantly affected, as the mechanisms that give them a leg up in bidding for government contracts (set-asides, prequalification, and subcontracting conditions) would be removed.

Businesses that have historically been excluded or disadvantaged by race-based criteria — such as white-owned small businesses — could find it easier to compete for government contracts under the new system.

Industries that have been designated for local production and content requirements would also be affected, as those designations would fall away, potentially opening those sectors to more competition from imported goods or foreign suppliers.

Members of the Public Procurement Tribunal — the body that handles disputes about procurement decisions — would be affected because the bill proposes to expand who qualifies to serve on that body.

Finally, ordinary South Africans as taxpayers and citizens are affected indirectly, since public procurement determines how government spends billions of rand of public money every year.

The bill, introduced by DA (Democratic Alliance) Member of Parliament Mr G. Michalakis under section 73(2) of the Constitution (which allows individual MPs to introduce legislation), proposes several significant changes to how government procurement works in South Africa.

First, it wants to replace the current race-based preferential procurement system with a new framework built around the United Nations' Sustainable Development Goals (SDGs) — a set of 17 global goals adopted in 2015 covering things like ending poverty, reducing inequality, promoting decent work, and protecting the environment. Procuring institutions would be required to develop and implement procurement policies that contribute toward achieving these SDGs. The bill describes this as an 'objectively measured, race-neutral and socio-economically progressive' alternative to the current system.

Second, the bill proposes to scrap several specific tools currently used in preferential procurement: set-asides (contracts reserved for particular groups), prequalification criteria linked to preferential procurement (race-based entry requirements for bidding), subcontracting as a condition to bid (forcing suppliers to partner with certain businesses), and the designation of sectors for local production and content.

Third, the bill proposes changes to the Public Procurement Tribunal by expanding the range of people who can qualify to be appointed as members — though the bill does not spell out exactly what those expanded criteria are beyond what is mentioned in the notice.

Fourth, the bill would remove 'a threat to national security' as a reason that can be used to exempt a procuring institution from having to follow any provision of the principal Act — closing what the bill's backers apparently see as a loophole.

Fifth, and most dramatically, the bill proposes to completely repeal (cancel) the BBBEE Act — the Broad-Based Black Economic Empowerment Act — in its entirety. This would mean the whole legal framework for BBBEE as it currently exists would be abolished. The bill also proposes consequential amendments to other related laws that would be affected by the removal of the BBBEE Act.

Public comments on the draft bill must be submitted to the Speaker of the National Assembly at ppab-bee@parliament.gov.za, with a copy to legislation@da.org.za, by no later than 6 September 2026.

This bill goes to the heart of one of the most debated questions in South Africa: how should the country address the deep economic inequalities left behind by apartheid? The current BBBEE system and race-based procurement policies exist specifically to try to correct that historical injustice by directing government spending toward Black-owned and previously disadvantaged businesses. If this bill passes, that entire legal framework would be dismantled and replaced with something that does not use race as a factor at all.

For supporters of the bill, this matters because they argue the current system has not achieved broad economic transformation and instead benefits a small connected elite, while race-neutral criteria based on the SDGs could lift up poor and disadvantaged communities across racial lines in a more measurable and objective way.

For critics, the removal of BBBEE and race-conscious procurement could mean that the structural advantages that white-owned businesses still hold — built up over generations under apartheid — would remain unchallenged. Without race as a criterion, they argue, South Africa's economic inequality could deepen rather than narrow.

For ordinary South Africans, the stakes are real and practical. Government procurement is one of the biggest levers the state has to shape who gets economic opportunity. Changes to these rules affect who gets contracts worth billions of rand, who can build a business, and ultimately who has a shot at economic participation. The repeal of the BBBEE Act would also affect private sector transformation scorecards and obligations far beyond just government contracts, touching many areas of economic life.

Because this is a Private Member's Bill (introduced by an individual MP rather than the government), it faces a more difficult path through Parliament — but it still represents a serious legislative proposal that Parliament is obliged to consider, and the public has until 6 September 2026 to make their voices heard.