National Treasury Procurement Reform 2025: Key Changes for Suppliers

What the Public Procurement Act Changes

The Public Procurement Act replaces a patchwork of regulations that previously governed procurement across different spheres of government. The Preferential Procurement Policy Framework Act (PPPFA), which governed preference points for most of the past two decades, is being repealed and replaced with a unified framework under the PPA. The new Act aims to streamline procurement, reduce red tape, and create a more transparent and competitive environment for government contracting.

Key changes include a revised preference points system that places greater emphasis on local content, employment creation, and transformation outcomes rather than purely BBBEE score. The PPA also introduces mandatory registration on the Central Supplier Database (CSD) for all categories of procurement, stricter conflict-of-interest disclosure requirements, and new provisions for small and medium enterprise (SME) set-asides in certain tender categories. National Treasury is expected to publish sector-specific implementation regulations through 2025 and 2026.

• Replacement of PPPFA with a unified Public Procurement Act framework
• Revised preference points system emphasising local content and job creation
• Mandatory CSD registration for all procurement categories
• New SME set-aside provisions in designated categories
• Strengthened conflict-of-interest and disclosure requirements

Impact on BBBEE Preferences in Tenders

One of the most significant changes for suppliers is the revision to how BBBEE preferences are applied in tender evaluation. Under the PPA, the preference point system is being recalibrated to allow organs of state greater flexibility in how they weight transformation criteria against price and quality. While BBBEE remains a key consideration, the prescriptive 80/20 and 90/10 formulas of the old PPPFA will be replaced with more flexible sector-specific frameworks.

Suppliers who have invested in improving their BBBEE level should not be alarmed — the PPA still requires that organs of state pursue transformation objectives in their procurement. However, the specific way in which BBBEE scores are translated into preference points will differ from what suppliers have been used to. It is critical that businesses engage with the final regulations for their sector once published to understand exactly how their BBBEE level will be factored into evaluations.

• BBBEE remains a mandatory consideration in tender evaluation
• Sector-specific preference frameworks replacing the blanket 80/20 and 90/10 rules
• Greater discretion for contracting authorities in weighting criteria
• Current BBBEE certificates remain valid — maintain your verification schedule

Compliance Steps for Existing Suppliers

Suppliers currently active in government procurement should take several proactive steps in light of the PPA implementation. First, ensure that your CSD profile is fully updated and that all compliance documents — tax clearance, BBBEE certificate, CIPC registration — are current. The new Act increases the frequency and scope of supplier database audits, and inactive or incomplete CSD profiles may result in being passed over for contract awards even when your bid is technically strongest.

Second, familiarise yourself with the transitional provisions. Tenders that are already advertised under the old PPPFA framework will be evaluated under those rules until award. New tenders advertised after the PPA implementation date in your sector will use the new framework. National Treasury's implementation timeline means that full PPA compliance will be phased in across different government entities and sectors through 2025 and 2026, so it is important to check which framework applies to each specific tender you are bidding on.

• Update your CSD profile and ensure all compliance documents are current
• Monitor National Treasury's sector-specific implementation regulations
• Check which framework (PPPFA or PPA) applies to each tender you bid on
• Review your BBBEE verification schedule and align with new requirements

Frequently Asked Questions