ZAMA TITI | It’s time to fix SA’s broken procurement system

Share current article via EmailShare current article via FacebookShare current article via TwitterShare current article via LinkedInZama TitiZama Titi is the founder and CEO of Momula

ExpandZama Titi, the founder and CEO of Momula. Picture: Supplied Story audio is generated using AI

The Sunday Times’s findings on nearly R70bn in government contract extensions and expansions should alarm every South African.

Thousands of contract changes raise legitimate questions about transparency, accountability and whether taxpayers are getting value for money.

Investigative journalists deserve credit for exposing practices that demand scrutiny.

There is always the danger, however, that we become so focused on identifying procurement failures that we overlook the system that produces them. South Africa does not have the luxury of treating every procurement scandal as an isolated incident, responding with outrage and moving on until the next one breaks.

The real questions we need to ask are: what is fundamentally wrong with our procurement system and what are we going to do to fix it?

The answers require us to look beyond the final contract, beyond the official who signed an extension and beyond the compliance report. We need to examine the entire process, from planning and tender design to supplier financing, project delivery and payment.

Procurement does not begin when a tender is advertised. And its success cannot be measured by whether the paperwork is in order.

The question is not whether irregularities should be exposed. They should. It is whether exposing them, without addressing the conditions in which they occur, will change anything.

Our procurement system places considerable emphasis on compliance. That is necessary, but compliance alone does not tell us whether a project has achieved its intended outcome, whether its original scope was realistic or what the consequences would be if a contract were allowed to lapse.

Consider a call-centre agent instructed to complete every call within five minutes. If performance is measured primarily by the time taken to close a call, the agent will inevitably face pressure to prioritise speed over quality.

In our haste to point fingers, we sometimes forget that many procurement professionals themselves operate under similar pressures. They must follow prescribed processes, meet delivery deadlines, manage budgets and ensure projects progress. When a project stalls, the consequences can be immediate and highly visible. When a contract is extended, the decision attracts scrutiny.

Yet the consequences of allowing a critical project to stop may receive far less attention.

This does not excuse misconduct. It does, however, demand that we understand the incentives, constraints and decisions that lead to it.

The auditor-general plays an indispensable role in monitoring compliance and public-sector accountability. But we also need to evaluate procurement against delivery, value for money, and the broader economic outcomes it is supposed to achieve. We cannot expect better results if we measure only whether the rules were followed, without examining whether the system enables people to deliver.

One of the most overlooked aspects of procurement is what happens before a tender is issued. Are questions like, “What work is actually required?” “Have the necessary technical assessments been completed?” or “Were the right experts consulted?” being asked?

In our business, we have seen first-hand how weaknesses in the initial assessment of a project’s requirements can undermine everything that follows. If the original study miscalculates what is needed, the tender may be flawed before it reaches the market.

An unrealistic scope can lead to cost increases, delays, additional work and requests for contract variations. The subsequent extension may become the most visible symptom of a problem that began much earlier.

We must therefore scrutinise not only the final decision to extend a contract, but also the planning, technical assessments and consultation processes that preceded the original tender.

The financial conditions under which suppliers are expected to deliver are another critical part of the picture. A supplier awarded a government contract must often pay employees, secure materials, arrange insurance, establish a worksite and meet other operating costs long before receiving payment for completed work. That requires working capital.

Yet access to affordable finance remains a major obstacle for SMMEs. Many cannot secure funding on equitable terms, particularly when they lack substantial assets or a long credit history. Late payments make this worse. This is where procurement policy, payment practices and the financial system collide.

Imagine a state-owned entity with 10 suppliers on its panel. If eight cannot sustain delivery because they lack working capital or are paid late, the procurement official faces a difficult choice. The project must continue, deadlines must be met, and failure to deliver carries consequences.

The financially stronger suppliers may consequently receive more work, even when the intention was to broaden participation and create opportunities for smaller businesses.

The official’s decisions may then attract scrutiny for repeatedly favouring the same suppliers. Yet the underlying financial constraints that shaped those decisions may remain outside the official’s control. This is how a system can undermine its own objectives.

We need solutions that improve accountability while making successful delivery more achievable.

First, we must use the opportunity presented by the Public Procurement Act’s return for reconsideration to engage meaningfully with the public and strengthen the framework.

The process should clarify when changes in project scope or cost trigger additional scrutiny, particularly when increases exceed defined thresholds. The objective must be a system that is transparent, proportionate, and practical to implement.

Second, every contract extension should be recorded in a public registry. The registry should disclose why an extension was necessary, how much additional expenditure it involves, who approved it, and whether the original contract had expired.

Such a registry would make patterns easier to identify, enable earlier intervention, and give citizens a clearer view of how procurement decisions are made.

Third, we must use technology and better data to identify risks before they become failures. Early-warning systems could flag repeated extensions, significant cost increases, recurring awards to the same suppliers, or projects showing signs of planning and delivery problems.

Procurement teams should be able to investigate these warnings while there is still time to act. Equally important, procurement decisions should be assessed alongside supplier payment performance and the financial capacity needed to execute contracts.

This means connecting information that is too often kept in separate silos: tender specifications, contract changes, invoices, payment records and project outcomes.

South Africa needs investigative journalism, rigorous auditing and consequences for wrongdoing. None of these should be diluted.

But responsible citizenship demands more than pointing at a broken system and waiting for someone else to repair it.

We must be prepared to ask whether our procurement rules remain fit for purpose, whether projects are properly planned, whether suppliers can access the working capital they need, and whether our measures of success encourage the outcomes we actually want.

We already know that something is wrong. The real test is whether we are willing to change it.

Would you like to comment on this article?Sign up (it's quick and free) or sign in now.

Please read our Comment Policy before commenting.