The Procurement Act is gone. The question it raised is not.
On 17 September 2026 the Constitutional Court struck down the Public Procurement Act. Here is what that means for your next tender, and what to watch for next.
Sipho runs an electrical contracting business with twelve staff. Most of his work comes from municipalities and provincial departments, some of it directly and some as a subcontractor to larger firms. He spent the winter preparing for a new procurement regime: reading draft regulations, reworking his bid documents, and wondering whether bringing in an investor would cost him his eligibility for work set aside for small, black-owned businesses.
Then the law he was preparing for disappeared.
What happened
On 17 September 2026, the Constitutional Court unanimously declared the Public Procurement Act 28 of 2024 unconstitutional and invalid in its entirety. The challenge was brought by the Western Cape Government, the City of Cape Town and others.
The Court did not strike the Act down because of what it tried to do. It struck it down because of how Parliament passed it. The Court found that Parliament had failed to facilitate reasonable public participation, including by running a truncated process and not properly considering public submissions. Because those failures ran through the Act's core provisions, the whole Act fell.
The Act was meant to replace a patchwork of procurement rules across national, provincial and local government with a single framework. It was signed in 2024 but had never been brought into operation.
What that means for your next tender
In short: nothing changes, and that is the point.
Because the Act never came into force, the laws it was meant to replace never stopped applying. Public procurement continues under the Public Finance Management Act, the Municipal Finance Management Act, the Preferential Procurement Policy Framework Act 5 of 2000 and the Preferential Procurement Regulations, 2022. The rules you bid under last month are the rules you bid under this month.
The draft General Public Procurement Regulations, 2026, published for comment in April, fall away too. They were made under the Act, and without the Act they have nothing to stand on. That includes the proposal that contracts below R20 million be set aside for specific categories of bidders, with full ownership by members of the category required to qualify.
So if you restructured, or were about to restructure, your business around those drafts, stop. And if you reworked bid templates or compliance documents to match the new Act, check them against the rules that actually apply.
What comes next
This is not the end of procurement reform. The Minister of Finance has said he remains committed to it and will engage Parliament on the way forward. A new bill is widely expected.
The difference next time is that Parliament will be held to a proper public participation process. That matters for small businesses, because it means you will get a real opportunity to comment. The businesses most affected by procurement rules are often the least represented when those rules are written. The next round is a chance to change that.
The question that has not gone away
The set-aside design in the draft regulations raised a question every founder who sells to the state should keep in mind: how does your ownership structure affect your eligibility for work?
Under the current rules, organs of state award preference points against their own "specific goals", which often include B-BBEE status or ownership by designated groups. Under the drafts, some work would have been open only to businesses wholly owned by a particular category. That proposal is gone for now, but the policy direction behind it has not changed. When you bring in a co-founder, an investor or a strategic partner, it is worth asking what that does to your eligibility, today and under whatever comes next.
That is a question to think about, not to act on in a panic.
What to do now
Bid under the rules that apply. Read the specific goals in each tender carefully. Different organs of state weight them differently.
Keep your compliance documents current. Your Central Supplier Database registration, tax compliance status and B-BBEE certificate or sworn affidavit should all be up to date before the next tender closes, not after.
Undo anything built on the drafts. If you changed documents, structures or plans to fit the 2024 Act or its draft regulations, reverse or park those changes.
Get your subcontracting paper right. For many small businesses, subcontracting to a larger contractor is the real route into public work. Your agreement with the main contractor decides when you get paid, what happens when the scope changes, and who carries the risk if the state delays.
Watch for the new bill, and comment on it. When it is published, read it, and make a submission. This time the process has to listen.
Put it into practice
If subcontracting is how you access public work, your agreement with the main contractor is your most important procurement document. Our Subcontractor Agreement Pack (Supplier Side) is drafted for South African businesses supplying larger contractors, and protects you on payment, scope and risk.
This article is legal information, not legal advice. It reflects the position as at 1 November 2026. If you need advice on a specific tender or procurement dispute, speak to a qualified legal practitioner.
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