Invalid procurement regulations: Sec 217 of Constitution

Note: Footnotes omitted and emphasis added

MADLANGA J (Majiedt J, Pillay AJ, Tlaletsi AJ and Theron J concurring):

[96] I have had the pleasure of reading the judgment penned by my colleague Mhlantla J (first judgment). I agree with the conclusion that the applications by Fidelity Services Group (Pty) Limited and the South African National Security Employers Association to intervene and for direct access be dismissed. On intervention, I agree for the reasons stated in paragraphs 24 and 25 of the first judgment. On direct access, I agree for all the reasons that judgment gives. Unfortunately, I cannot agree that the Minister did have the power to make the impugned regulations. In the main, our difference lies in how the first judgment reads the words “necessary or expedient” in section 5 of the Procurement Act. Therein lies the greatest problem.

[97] Before dealing with the difference, let me touch on some constitutional provisions that are relevant to the subject at hand. The norm-setting constitutional provision on the procurement of goods and services by organs of state is section 217(1) of the Constitution. This section provides that when an organ of state “contracts for goods or services, it must do so in accordance with a system which is fair, equitable, transparent, competitive and cost-effective”.

[98] But then, in a country like ours with its history of the economic disadvantage experienced by the majority of our people, procurement in accordance with these factors with no recognition of this disadvantage would have meant the perpetuation of the disadvantage and possibly the widening of its gap. This was not lost to the framers of our Constitution.

That is why section 217(2) of the Constitution provides that section 217(1) does not prevent organs of state

“from implementing a procurement policy providing for . . . categories of preference in the allocation of contracts; and . . . the protection or advancement of persons, or categories of persons, disadvantaged by unfair discrimination”.

In Allpay Froneman J explains that

“[e]conomic redress for previously disadvantaged people also lies at the heart of our constitutional and legislative procurement framework”.

[99] What section 217(2) seeks to achieve is consonant with the transformative nature of our Constitution. And its provisions dovetail with those of section 9(2) of the Constitution. Without provisions of this nature, true or substantive equality would forever be pie in the sky for the vast majority of South Africans and the transformative agenda of the Constitution would be unrealisable.

Talking about the transformative nature of our Constitution, Madala J said in Du Plessis:

“[The interim Constitution] is a document that seeks to transform the status quo ante into a new order, proclaiming that—

‘there is a need to create a new order in which all South Africans will be entitled to a common South African citizenship in a sovereign and democratic constitutional State in which there is equality between men and women and people of all races so that all citizens shall be able to enjoy and exercise their fundamental rights and freedoms.’”

Although said about the interim Constitution, this is equally true of the Constitution.

[100] Section 217(3) of the Constitution then provides that

“[n]ational legislation must prescribe a framework within which the policy referred to in [section 217(2)] must be implemented”.

The debate between the first judgment and this judgment is not about these transformative imperatives. We both agree on them. And we must. I will highlight the difference shortly.

[101] The national legislation envisaged in section 217(3) of the Constitution is the Procurement Act from whose long title we see that the Act is meant “[t]o give effect to section 217(3) of the Constitution by providing a framework for the implementation of the procurement policy contemplated in section 217(2) of the Constitution”.

Section 2(1) of the Procurement Act provides that “[a]n organ of state must determine its preferential procurement policy”, which it must implement within the framework set out in this section. Section 5(1) of the Act – which is the section that is at the centre of what we must decide in this matter – provides that

“[t]he Minister may make regulations regarding any matter that may be necessary or expedient to prescribe in order to achieve the objects of this Act”.

[102] The difference between the first judgment and mine lies in the interpretation of “necessary or expedient . . . in order to achieve the objects of [the Procurement Act]”.

I may be misunderstanding the first judgment, but I think where it is mistaken is exaggeratingly focusing on “in order to achieve the objects of [the Procurement Act]”.

The result is that it sees no impediment to the Minister being entitled – in terms of section 5(1) – to make the impugned regulations.

As I explain presently, on a conjoined reading of the words “necessary or expedient” in section 5(1) and the power afforded organs of state by section 2(1) to determine their preferential procurement policy, the Minister’s regulation making power is not as wide as the first judgment suggests.

[103] Ordinarily, the purpose served by regulations is to make an Act of Parliament work. The Act itself sets the norm or provides the framework on the subject matter legislated upon. Regulations provide the sort of detail that is best left by Parliament to a functionary, usually the Minister responsible for the administration of the Act, to look beyond the framework and – in minute detail – to ascertain what is necessary to achieve the object of the Act or to make the Act work.

In Engelbrecht this Court embraced the following words of Bennion which were quoted with approval by Ponnan AJA in a minority judgment in Makwetlane:

“[U]nderlying the concept of delegated legislation is the basic principle that the Legislature delegates because it cannot directly exert its will in every detail. All it can in practice do is lay down the outline. This means that the intention of the Legislature, as indicated in the outline (that is the enabling Act), must be the prime guide to the meaning of delegated legislation and the extent of the power to make it.
. . .
The true extent of the power governs the legal meaning of the delegated legislation. The delegate is not intended to travel wider than the object of the Legislature. The delegate’s function is to serve and promote that object, while at all times remaining true to it.”

[104] I accept that courts have held that the power to make regulations that are necessary or expedient to achieve the objects of an Act is very wide.

In FEDSAS the Supreme Court of Appeal held:

“The regulation-making power in section 27(1) of the North West Schools Act, extends to what the MEC deems ‘necessary or expedient to prescribe in order to achieve the objectives of this Act’. This phrase as submitted by the appellant, confers power ‘of the widest possible character’ and leaves it to the decision-maker to decide ‘what method to follow in order to achieve the purpose stated in the subsection.’”

[105] Addressing a similarly worded regulation making power, Mhlantla J said in Municipal Employees Pension Fund

“[t]he power given to the MEC under section 4 is indeed very wide”.

Wide though this power may be, this does not mean it is without limit. Unsurprisingly, in the same case my colleague recognised that within the statute at issue there was some internal limiting mechanism. She had this to say:

“[T]he only source of such power for the regulator could be the ‘catch all’ power to make regulations ‘providing for all matters which [the regulator] considers necessary or expedient for the purposes of the [relevant respondent fund].’ . . . [T]his power, however, does not extend to a purpose not sanctioned by the original legislation, i.e. compulsory membership of one of the KwaZulu-Natal Funds. Making membership of one of the KwaZulu-Natal Funds compulsory would be ultra vires those laws and, hence, in conflict with the constitutional principle of legality.”

[106] Ultimately, the meaning of the phrase “necessary or expedient . . . to achieve the objects of this Act” will be yielded by an interpretative exercise.

What its bounds are will depend on the context provided by each piece of legislation.

That was the case in Municipal Employees Pension Fund. And – as I seek to demonstrate – it is the case in the instant matter.

[107] In paragraph [46] the first judgment says:

“[R]egulations can be made that are necessary or expedient to achieve the purpose of the Procurement Act and the only restriction placed on the Minister’s power to promulgate regulations is that the regulations should act in furtherance of the objects of the Procurement Act.” (Emphasis in first judgment.)

[108] What the first judgment identifies as the “only restriction” on the Minister’s power has the effect of attaching no or little meaning to “necessary or expedient”. This inverts the provisions of the section because the two words – “necessary” and “expedient” – are, in fact, the limiting factor, not what the first judgment identifies as the “only restriction”.

A regulation that does not meet the threshold of necessity or expedience is invalid for being ultra vires the empowering section.

And – as I will explain – “necessary” and “expedient” must be read in the light of section 2(1) of the Procurement Act. That is where the curb on the Minister’s power lies.

[109] In saying “the only restriction placed on the Minister’s power to promulgate regulations is that the regulations should act in furtherance of the objects of the Procurement Act”, the first judgment effectively strikes a line across “necessary or expedient”. (My emphasis.) It cannot do that. On first principles, our jurisprudence on interpretation requires that each word must – as far as possible – be given meaning.

The first judgment does not suggest that no meaning can be given to these words. Rather, its approach appears to relegate them. The first judgment effectively makes acting in furtherance of the objects of the Procurement Act to be an unbounded standard: if a regulation can somehow be shown to further the objects of the Procurement Act, it is good.

Whether it was necessary or expedient to make the regulation matters not. That is the import of what the first judgment says. And the first judgment puts it beyond question by saying “the only restriction placed on the Minister’s power to promulgate regulations is that the regulations should act in furtherance of the Procurement Act”. As I said, I think this completely inverts what section 5 actually provides.

[110] The first judgment does attempt to give meaning to the words “necessary” or “expedient”. I will not get into what it says in this regard. Suffice it to say this attempt does not alter the idea that, on the first judgment’s approach, the only restriction on the Minister’s regulation making power is furtherance of the Procurement Act.

The result is that all else is subsumed; “necessary” or “expedient” are pushed to the periphery. To further demonstrate that to the first judgment “necessary” or “expedient” do not serve to limit the power, it also says in paragraph 46

“[t]he power is therefore not limitless: it is regulated by acting in furtherance of this Act, which is of course a broad concept”

[111] In my view, the impugned regulations are not necessary. The impugned regulations are meant to serve as a preferential procurement policy.

Throughout, the first judgment says as much. Section 2(1) of the Procurement Act provides that an organ of state must “determine its preferential procurement policy” and implement it within the framework laid down in the section. (My emphasis.)

If each organ of state is empowered to determine its own preferential procurement policy, how can it still lie with the Minister also to make regulations that cover that same field?

[112] I do give meaning to “necessary or expedient”. So, for me the starting point is whether the impugned regulations meet the requirements of section 5: are they necessary or expedient to achieve the objects of the Procurement Act?

[113] As I indicated earlier, from the long title of the Procurement Act, it is plain that this Act is the national legislation envisaged in section 217(3) of the Constitution and – as provided for in that section – the object of the Act is to achieve what is contained in section 217(2) of the Constitution. So, what is necessary for purposes of the Procurement Act and, by extension, for purposes of section 217(2) of the Constitution, is provided for in section 2(1) of the Procurement Act: in terms of section 2(1) a preferential procurement policy must be determined by each individual organ of state; and it must be implemented within the framework set out in the same section.

[114] Logically, that must mean the determination of a preferential procurement policy by a person or entity other than each organ of state is not necessary for the simple reason that there already is provision in section 2(1) for the determination of such policy by each organ of state.

Therefore, rather than being necessary, any determination of policy by the Minister would be superfluous and not at all within the ambit of what is necessary as envisaged in section 5.

According to the Compact Oxford English Dictionary, “necessary” means “1. needing to be done, achieved, or present . . . 2. that must be done; unavoidable”. (My emphasis.)

If there already is provision in the Procurement Act for each organ of state to determine and implement its preferential procurement policy, how can it ever be necessary for the Minister to make provision by regulation for the same thing? It simply cannot be. What the Minister has purported to do is a far cry from what is necessary.

[115] To the extent that “expedient” may ordinarily be more permissive than “necessary” (“1. convenient and practical . . . 2. suitable or appropriate”), still it cannot have whatever meaning we want to give it.

It must be interpreted in the context of the rest of the Procurement Act.

Majiedt AJ tells us that “the relevant statutory provision must be properly contextualised”. The Act in so many words gives the power to determine and implement a preferential policy to the organ of state concerned.

Therefore, to interpret “expedient” to have so wide a meaning as to confer a power to the Minster also to determine a preferential procurement policy would amount to a total disregard of this context. Why would it be “suitable”, “convenient”, “practical” or “appropriate” for a power that already vests in each organ of state also to be exercised by the Minister?

[116] It can neither be necessary nor expedient for the Minister to make regulations that seek to achieve that which can already be achieved in terms of section 2(1) of the Procurement Act. Happily, both the first judgment and this judgment and, indeed, the Minister understand the impugned regulations to do what is envisaged in section 217(2) of the Constitution.

The Procurement Act (in particular section 2(1)) then gives effect to section 217(3) of the Constitution, which provides that the preference envisaged in section 217(2) must be provided for in national legislation.

[117] Understandably, the first judgment accepts that the determination and implementation of the preferential procurement policy are provided for in section 2. This cuts across any viable interpretation that section 5 may also confer on the Minister a power to determine a preferential procurement policy.

[118] It does not advance the debate to say it is open to organs of state not to apply the prequalification policy contained in the impugned regulations. The antecedent question is: does a Minister have the power to make regulations of this nature in the first place? If she or he does not, the matter ends there; the regulations are invalid for being ultra vires the enabling section. And this is no small matter.

Conduct by an organ of state that has no foundation in some law breaches the principle of legality which is a subset of the rule of law, a foundational value of the Constitution. If the Minister is of the view that organs of state are failing to do what they are required to in terms of section 2(1), she or he must find other legally cognisable means to get them to do what they must do.

For example, she or he might engage organs of state politically to make section 2(1) determinations of preferential procurement policies that meet with her or his idea of preference. Or, she or he could introduce a Bill in Parliament with a view to amending the Procurement Act such that the Act itself contains her or his desired preferential procurement policy. Of course, the content of either option must pass constitutional muster.

[119] The Minister cannot – just because she or he feels that her or his idea of a preferential procurement policy is not being introduced by organs of state – arrogate to her or himself a power that she or he does not have under the Procurement Act. The Minister’s perceived need for a particular type of preferential procurement policy is simply not enough.

Van der Horst makes an analogous point:

“A great deal of the bulky regulations are clearly ‘necessary for the purpose of bringing the law into operation at the commencement thereof’ since there is a great deal of the necessary machinery that Parliament itself did not determine but left to the Minister to provide for by regulation . . . . Were no regulations promulgated timeously as provided for here there would be no machinery for registration of cars or acquiring drivers’ licences. But by no stretch of the imagination outside of Looking Glass country can it be regarded as necessary or even expedient for the purpose of bringing the Act into operation at its commencement that regulations be promulgated providing for matter that is dealt with explicitly in the Act itself but which is deliberately not put into operation.” (My emphasis.)

[120] So, the functionary entrusted with the regulation making power cannot stray from the parameters set by the empowering legislation. In the present matter, a failure by organs of state to act in accordance with the power vesting in them cannot have the effect of vesting in the Minister a power that otherwise vests in them.

The phrase “necessary or expedient to achieve the objects of this Act” is about an objective legal question.

When we look at it before it comes into operation (not at the level of the fact of a failure, or possible fact of a failure in future, by whatever organ of state to act in accordance with the Act), what is necessary or expedient to make it work so as to achieve its objects?

This is about looking at the Procurement Act as it stands. Surely, at that point the Minister can never see it as necessary or expedient to make regulations that create a system of preference as she or he must expect each organ of state to do its job in terms of section 2(1). That is indication enough that it simply does not lie with the Minister to do anything in this regard.

Put differently, it can never be necessary or expedient for the Minister to do anything in this regard. And, if down the line and as a matter of fact, organs of state fail to do that which lies with them to do, that cannot alter the legal question of where the power lies or what the Minister can and cannot do. The Procurement Act has made provision for the creation of the system of preference and that statutory reality persists for as long as section 2(1) is there. The same reasoning must apply even to amendments of the regulations.

[121] Indeed, Shanahan, a judgment of the High Court of Australia, quoted with approval by the Supreme Court of Appeal in Bezuidenhout, held that the regulation making power—

“does not enable the authority by regulations to extend the scope or general operation of the enactment but is strictly ancillary. It will authorise the provision of subsidiary means of carrying into effect what is enacted in the statute itself and will cover what is incidental to the execution of its specific provisions. But such a power will not support attempts to widen the purposes of the Act, to add new and different means of carrying them out or to depart from or vary the plan which the Legislature has adopted to attain its ends.” (My emphasis.)

[122] The Procurement Act has stipulated the means of, or adopted a plan for, determining a preferential procurement policy.

The Minister is now adding different means or varying the adopted plan. He cannot do that.

[123] Here is an interesting question that arises from the first judgment’s approach. Assuming that a preferential procurement system created by the Minister by regulation conflicts directly with one created by an organ of state in terms of section 2(1) of the Procurement Act, which one will take precedence, and why? On my approach, that problem does not arise because I say the power to create a system of preference vests in the organ of state, and in it alone.

The conundrum that does arise on the approach adopted by the first judgment serves to illustrate that the Minister has no business creating a system of preference: the power lies elsewhere. I can conceive of no reason why the same power would vest in the Minister and individual organs of state. That is a recipe for disaster.

Quite aptly, Nugent JA said in Johannesburg Municipality

“[t]he existence of parallel authority in the hands of two separate bodies, with its potential for the two bodies to speak with different voices on the same subject matter, cannot but be disruptive to orderly planning and development within a municipal area”.

[124] It is not an answer to say – as the first judgment does – that the regulations do not replace a preference system determined in terms of section 2(1), and to then suggest that – for this reason – there is no impediment to an organ of state exercising a discretion whether to invoke the regulations.

• First, this is a vires (power) issue: does the Minister have the power to make regulations of this nature? I say not, and the matter ends there. How benign the regulations may be with regard to possible encroachment on the terrain of a preference system determined in terms of section 2(1) is irrelevant.
• Secondly, it is purely fortuitous that the present regulations have left it to the discretion of organs of state to apply or not to apply them. The point made by the first judgment is that the Minister has the power to make the regulations.

Therefore, possessed with that power, the Minister could easily have made other regulations that are not as benign as the first judgment claims the present regulations are, and those other regulations could well have clashed with a preference system determined in terms of section 2(1).

In sum, the first judgment does not address the conundrum of a possible clash between a section 2(1) preference system and regulations made in terms of a power that the Minister purportedly has.

[125] The upshot is that the following order must be made:

1. The application by Fidelity Services Group (Pty) Limited and the South African National Security Employers Association for leave to intervene in the proceedings is dismissed.
2. The application for direct access by Fidelity Services Group (Pty) Limited and the South African National Security Employers Association is dismissed.
3. Leave to appeal is granted.
4. The appeal is dismissed with costs, including the costs of two counsel.

Summary

Section 217 of the Constitution — Preferential Procurement Policy Framework Act 5 of 2000 — Preferential Procurement Regulations, 2017

Minister acted ultra vires Preferential Procurement Policy Framework Act 5 of 2000 — Regulations invalid

Media summary

The following explanatory note is provided to assist the media in reporting this case and is not binding on the Constitutional Court or any member of the Court.

On Wednesday, 16 February 2022 at 10h00, the Constitutional Court handed down judgment in the application for leave to appeal against a judgment and order of the Supreme Court of Appeal. This application was brought by the Minister of Finance (Minister) against Afribusiness NPC, and concerns the validity of the Preferential Procurement Regulations, 2017 (Procurement Regulations) promulgated by the Minister on 20 January 2017 in terms of section 5 of the Preferential Procurement Policy Framework Act (Procurement Act).

The Procurement Regulations, amongst other things, introduced pre-qualification criteria to be eligible to tender. Under the Regulations, if an organ of state elects to apply the pre-qualification criteria, any tender that does not meet the criteria is an “unacceptable tender”. These qualifying criteria advance certain designated groups and provide that only certain tenderers may respond, including: tenderers having a stipulated minimum Broad-Based Black Economic Empowerment (B-BBEE) status level; exempted micro enterprises (EMEs) or qualifying small enterprises (QSEs), and tenderers subcontracting a minimum of 30% to EMEs and QSEs which are at least 51% black owned. If feasible to subcontract for a contract above R30 million, then the organ of state must apply subcontracting to advance the designated groups.

Afribusiness launched an application in the High Court and sought an order reviewing and setting aside the Procurement Regulations in terms of the Promotion of Administrative Justice Act 3 of 2000 (PAJA) on the basis that the Minister had acted beyond the scope of his powers and that the regulations were invalid.
The High Court held that the 2011 Regulations, the precursor to the Procurement Regulations, also contained pre-qualifying criteria relating to functionality which were never challenged. Therefore, Afribusiness’ complaint could not be said to be against the concept of pre-qualifying criteria, but rather that they did not fall within the designated groups to be advanced. That Court held that the Minister was authorised to promulgate the regulations. It thus rejected the argument that the Minister had acted beyond the scope of his powers. In the result, the High Court held that the Procurement Regulations were rational and lawful, and dismissed the application with costs.

Afribusiness appealed to the Supreme Court of Appeal. After considering the Procurement Act and section 217 of the Constitution, the Supreme Court of Appeal held that the Minister had failed to act within the scope of his powers under the Act. That Court held that in light of section 2 of the Procurement Act, the correct approach to evaluating tenders is to first ascertain the highest points scorer and thereafter, if there are objective criteria that justify the award of the tender to a tenderer with a lower score, organs of state may do so. The Supreme Court of Appeal held that the preliminary disqualification was impermissible as it was not consonant with the approach envisaged by section 217(1) of the Constitution. Consequently, it held that the Minister’s promulgation of regulations 3(b), 4 and 9 was unlawful. The Procurement Regulations were declared invalid as they were for inconsistent with the Procurement Act and section 217 of the Constitution. The declaration of invalidity was suspended for 12 months.

Before the Constitutional Court, the Minister applied for leave to appeal against the order of the Supreme Court of Appeal. Shortly before the hearing of the application, Fidelity Services Group (Pty) Limited and the South African National Security Employers Association (SANSEA) applied for leave to intervene in the application. They also applied for direct access, on an urgent basis, in respect of separate interdictory relief to prevent the further implementation of the Procurement Regulations pending the outcome of this matter. The applications were opposed by the Minister.

The two applications were heard together with the main application. In support of their application to intervene, the Fidelity Group and SANSEA argued that the application of the Procurement Regulations had caused them significant financial loss, and this has led to numerous job losses. With regard to their application for direct access, the Fidelity Services Group and the SANSEA argued that it was in the interests of justice to grant them direct access, as they could not approach any other court for the relief they sought.

With regards to the main application, the Minister argued that a proper reading of section 217 of the Constitution requires a consideration of South Africa’s segregated past. The Minister submitted that section 5 of the Procurement Act confers wide regulatory powers to the Minister and that the Supreme Court of Appeal failed to appreciate this, as the regulatory scheme is flexible and enables the Minister to make any regulations that advance the objects of the Procurement Act. He contended that the Supreme Court of Appeal erred in that it measured the legality of the 2017 Regulations solely against the requirements of section 217(1) of the Constitution and did not attempt to read sections 2 and 5 of the Procurement Act harmoniously considering section 217(2) and (3) of the Constitution. Moreover, the Minster argued that, in any event, the 2017 Regulations were not intended to replace the scoring system under the Procurement Act but are contemplated in terms of the Act’s definition of an “acceptable tender” to which the preference point system may be applied.

Afribusiness argued that the Procurement Act does not empower the Minister to create pre-qualification criteria that disqualifies tenderers without recourse to their preference point score in section 2 of the Act, therefore the Procurement Regulations are inconsistent with the Act. It contended that any regulations made must be congruent with the provisions of section 217(1) of the Constitution, which require that state procurement must, amongst other things, be competitive and cost-effective. Further, the correct approach is to consider the highest points scorer and then consider whether the tender can be awarded to a lower scorer, in terms of section 2(1)(f) of the Act. Afribusiness advanced that the pre-qualification criteria overly narrow the selection pool and, therefore, do not enable the state to find the most capable and cost-effective tenderer. Thus, the promulgation of the Procurement Regulations, besides being outside the scope of the Minister’s powers, was a breach of the separation of powers as the Minister stepped into law-making terrain.

The first judgment (minority judgment) was penned by Mhlantla J (Khampepe ADCJ, Jafta J and Tshiqi J concurring). The Court was unanimous on three issues. First, on granting leave to appeal, as the application was a judicial review of an exercise of public power, which is a constitutional matter. Second, the application for intervention by the Fidelity Services Group (Pty) Limited and the South African National Security Employers Association was dismissed on the grounds that they failed to demonstrate a direct and substantial interest in the matter, and it was not in the interests of justice to grant the application. Finally, the application for direct access suffered a similar fate on basis that the Fidelity Services Group (Pty) Limited and the South African National Security Employers Association failed to exhaust all other available remedies.

The minority judgment and the majority judgment diverge on the reasoning and outcome of the main application. Mhlantla J held that the Minster did not act beyond the scope of the powers conferred on him by the Procurement Act when he promulgated the regulations as the Minister has the power to make any regulations regarding any matter that may be “necessary or expedient” to achieve the objects of the Procurement Act. The minority held that the Regulations were aimed at achieving the purpose of the Procurement Act and section 217 of the Constitution, and that a proper reading of the Procurement Regulations would demonstrate that an organ of state has a discretion to implement the pre-qualification criteria. Thus, the minority would have upheld the appeal.

The second judgment (majority judgment) penned by Madlanga J (Majiedt J, Pillay AJ, Tlaletsi AJ and Theron J concurring) disagrees with the minority judgment on whether the Minister had the power to make the impugned regulations. This divergence arose from the reading of the words “necessary or expedient” as contained in section 5 of the Procurement Act. The majority judgment interprets the words “necessary or expedient” to be the limiting factor to the power of the Minister to make regulations, rather than the factor that allows the Minister to make regulations to achieve the objects of the Procurement Act. The majority judgment comes to this conclusion by reading the words “necessary or expedient” with section 2(1) of the Procurement Act, which provides that an organ of state must determine its preferential procurement policy. Since each organ of state is empowered to determine its own preferential procurement policy, it cannot also lie with the Minister to make regulations that cover the same field. Ultimately, the majority judgment holds that it can neither be necessary nor expedient for the Minister to make regulations that seek to achieve that which can already be achieved in terms of section 2(1).

In the result, the applications to intervene and for direct access were dismissed. Leave to appeal was granted, however, the appeal was dismissed with costs.