Getting preferential procurement right under the 2022 Regulations

The Preferential Procurement Regulations, 2022 shifted responsibility for preference point systems and specific goals squarely onto accounting officers and accounting authorities. That discretion is an opportunity — and a risk.

Under the previous regime, institutions could lean on prescribed frameworks. Today, each organ of state must determine and justify its own approach to specific goals within its procurement policy. In our work with departments, municipalities and public entities, three failure patterns recur.

1. Policies that lag the regulations

Many SCM policies still reference repealed provisions. When bid committees evaluate against outdated policy, awards become vulnerable to challenge and expenditure risks being classified as irregular. A focused policy review — aligned to the 2022 Regulations and current National Treasury instruction notes — is the cheapest insurance an accounting officer can buy.

2. Specific goals without evidence

Institutions that adopt specific goals must be able to demonstrate a rational basis for them. That requires demographic and market data appropriate to the institution's mandate and footprint — not a copy-paste from another entity's policy. The evidentiary record matters as much as the goal itself.

3. Evaluation and award inconsistencies

Even sound policies fail in execution: preference points miscalculated, functionality criteria applied unevenly, or deviations inadequately motivated. Routine probity reviews on high-value tenders, and compliance checks on RFP files before award, catch these issues while they can still be corrected.

Procurement reform in South Africa is continuing, and the institutions that thrive will be those that treat compliance not as paperwork but as the by-product of a well-designed, well-run procurement function.

Nakede assists organs of state with SCM policy modernisation, probity audits and procurement capacitation. Talk to us about a focused SCM health check.