Housing Development AgencyRef: https://thehda.co.za/uploads/files/Preferential%20Procurement%20Policy%20Framework%20Act.pdf
Official source
Source domain: thehda.co.za
Collected on 6 August 2026
Always confirm details on the official source before acting.
What this means
This document is the South African Preferential Procurement Policy Framework Act No. 5 of 2000. It gives effect to section 217(3) of the Constitution by setting a framework for how organs of state must implement preferential procurement policies contemplated in section 217(2). It requires a points-based preference system (with different maximum points for contracts above or below a prescribed Rand value), sets rules for awarding contracts, allows measurable specific goals, and provides for exemptions, transitional treatment of tenders advertised before commencement, and regulations by the Minister of Finance.
Act: Preferential Procurement Policy Framework Act No. 5 of 2000
Assented to: 2 February 2000
Commencement date: 3 February 2000
Purpose: implement procurement policy framework under Constitution section 217(2) and (3)
Minister: Minister of Finance
Organ of state definition includes national/provincial departments, municipalities, constitutional institutions, Parliament, provincial legislatures, and other categories recognised by the Minister
Preference point system required
Contracts above prescribed Rand value: max 10 points for specific goals; lowest acceptable tender must score 90 for price
Contracts at or below prescribed Rand value: max 20 points for specific goals; lowest acceptable tender must score 80 for price
Higher-priced acceptable tenders score fewer points on a pro rata basis using a prescribed formula
Specific goals may include historically disadvantaged persons (race, gender, disability) and RDP programmes (Govt Gazette No. 16085, 23 Nov 1994)
Specific goals must be clearly specified in the tender invitation
Contract awarded to highest points tenderer unless objective criteria justify another award
False information to secure preference may lead to cancellation at organ of state discretion
Goals must be measurable, quantifiable, and monitored for compliance
Minister may exempt an organ of state for national security, international suppliers, or public interest
Transitional rule: tenders advertised before commencement must be finalised as if the Act had not commenced
Regulations: Minister may make regulations; draft regulations must be published in Government Gazette and every Provincial Gazette for public comment
Minister of Finance
President (English text signed by the President)
Organ of state (national/provincial departments, municipalities, constitutional institutions, Parliament, provincial legislatures, and other recognised institutions)
