State-owned companies cannot disqualify prospective suppliers who are not majority black-owned without first considering the price and proposition of the tender, the Supreme Court of Appeal ruled on 02 November 2020.
Preferential Procurement regulations allow organs of state to disqualify tenders in advance, simply because a company was not 51 (Fifty-one) % black-owned, for example. The SCA has declared this invalid and unconstitutional.
The pre-qualification criteria, the court ruled, is a deviation from the Constitution which directs organs of state, when contracting for goods or services, to do so in accordance with a system that is fair, equitable, transparent, competitive, and cost-effective.
The prequalification criteria do not meet this requirement.
The Court has suspended the declaration for 12 (Twelve) months to allow the minister to remedy the defects identified.