“Pencil-test procurement” pause proves the point

25 March 2022 - Treasury has granted exemptions from race-based procurement tests for new contracts offered by Eskom and Transnet – as recommended by the IRR – to serve the public interest of South Africa.

Treasury has granted exemptions from race-based procurement tests for new contracts offered by Eskom and Transnet – as recommended by the IRR – to serve the public interest of South Africa.

This is a welcome development following earlier indications that the government was poised to grind itself to a total halt in the name of race-based ideology.

In February the Constitutional Court struck down regulations that disqualified companies from bidding for government contracts on the basis of race. Thereafter, Treasury Director General, Dondo Mogajane, issued an advisory to halt all new government tenders from being issued while Treasury continues to probe exotic routes to reinstate the unconstitutional regulations.

Said IRR head of campaigns Gabriel Crouse: “The message was unfortunately that it would be better to sabotage all essential services by halting their replenishment than to let South African businesses compete on merit. Alarm lights flashed red.”

The IRR proposed instead that Treasury Minister, Enoch Godongwana, should exempt from race-based requirements any department that wished to continue serving South Africans as efficiently as possible, since this would serve the national public interest.

As the IRR suggested, Minister Godongwana went on to offer exemptions from race tests to Transnet and Eskom this week, a welcome development for poor South Africans, and for businesses that depend on ports staying open and on a regular electricity supply.

Minister Godongwana is well justified to exempt SOEs from “pencil-test procurement” procedures that insult the dignity of black people. Surveys commissioned by the IRR consistently show that roughly 80% of South Africans, including 80% of black South Africans, would prefer jobs to be appointed by merit, a better alternative to perpetuating the ignoble idea that some people are insufficient because of their appearance.

Moreover, the State Capture Report highlighted the “inevitable tension” between what it calls “maximum value-for-money” and what the IRR calls “pencil-test procurement policies”. The State Capture Report clearly identifies that “the primary national interest is best served when the government derives maximum value-for-money in the procurement process and procurement officials should be so advised.”

Minister Godongwana is empowered to grant indefinite exemptions from “pencil-test procurement” by statute if this serves the public interest, which the State Capture Report indicates it does.

Unfortunately, the Employment Equity Amendment Bill (EEB), which is shortly to appear on President Cyril Ramaphosa’s desk, will resurrect the pre-disqualification criteria that were just struck down as unconstitutional and once again threaten what the State Capture Report called “the primary national interest”. This is why the IRR calls on President Ramaphosa to follow in Godongwana’s pragmatic footsteps and veto the EEB before it comes into force.

“Godongwana took one small step for poor people who think earning a wage is more important than pencil tests. Ramaphosa’s veto would be a giant leap for the whole country, which deserves a government that puts service before all else every time it spends a cent paid in tax,” concluded Crouse.

Details on the IRR petition to President Ramaphosa are available here.

Media contacts: Gabriel Crouse, IRR Head of Campaigns – 082 510 0360; gabriel@irr.org.za
Chris Hattingh, IRR Deputy Head of Campaigns – 083 600 8688; chris@irr.org.za
Media enquiries: Michael Morris Tel: 066 302 1968 Email: michael@irr.org.za