Bid Specifications – the “golden thread” of public procurement

Public procurement in South Africa is a constitutional function, not a discretionary one. Section 217 of the Constitution requires every organ of state to contract for goods and services through a system that is fair, equitable, transparent, competitive, and cost-effective. However, meeting these imperatives depends on more than just procedural compliance. Substantively, the tender must be coherent, complete and fair. The bid specifications themselves play a key role in this critical aspect.

Demand Management Phase: Where the Thread Begins

The first phase of the procurement process is demand management. This is the point at which an institution honestly and completely defines what problem it is trying to solve. National Treasury’s guidelines in this respect emphasise that this is more than a budgeting exercise. It is about conducting a total needs analysis, by inter alia identifying functions to be executed, listing required resources, analysing past expenditure and testing whether funding is available.

All too often, this phase is reduced to repeating past contracts. However, real value comes from engaging end-user departments and the market itself early in the process, whether through requests for information or reverse trade shows. These tools help institutions discover realistic costing, what risks need to be managed, what solutions actually exist and what technology or services are state-of-the-art in this respect. Without this engagement, specifications are prone to being outdated, incomplete, or unrealistic.

Coherent specifications are not born at the drafting table. They emerge from robust demand management, collaboration, and early engagement with industry. When this is done properly, specifications become accurate, relevant, and fit for purpose, reducing the risk of impossibility of performance, costly retendering, and wasted expenditure of public funds.

Acquisition Management Phase: Specifications Put to the Test

The acquisition management phase thereafter translates planning into action. When applicable, organs of state must run competitive bidding processes through designated committees, from the Bid Specification Committee (BSC) to the Bid Evaluation Committee (BEC) and through to the Bid Adjudication Committee (BAC). It is at these stages where specifications determine who is eligible, how bids will be evaluated, and ultimately, who should be awarded the contract.

Awarding a tender has long been held to be administrative action, protected under the Promotion of Administrative Justice Act (PAJA). That means that tender decisions must be lawful, reasonable, and procedurally fair. If specifications are vague, ambiguous, or applied inconsistently, the process becomes vulnerable to judicial review, often rightly so. The Constitutional Court in AllPay v SASSA underscored that unclear or shifting criteria erode the rule of law and transparency.

Further, the Preferential Procurement Policy Framework Act (PPPFA) adds yet another layer, requiring that tenders be “acceptable”, i.e. fully compliant with specifications and conditions of tender. The dangers of defective specifications themselves, however, were well illustrated in ACSA v Imperial Group, where the Supreme Court of Appeal struck down tender specifications that imposed unlawful pre-qualification criteria, applied a non-compliant scoring method, and contained vague transformation requirements. The court found them irrational and disconnected from market realities, which was enough to taint the entire process.

Thus, the message we can receive from the Courts is that acquisition management succeeds only when guided by coherent specifications. They act as the roadmap for drafting tender documents, setting evaluation criteria, and ensuring fairness between bidders. Ambiguity, bias, or shifting goalposts create fertile ground for litigation, delays, and wasted public funds.

Contract Management Phase: Where Specifications Are Enforced

Nevertheless, even the most carefully drafted tender process is meaningless if the contract is not managed effectively. National Treasury estimates that over R600 billion of procurement spend sits in active contracts at any given time, and Auditor-General reports show that most irregular and wasteful expenditure arises after the award. Contract management is, therefore, the single biggest lever for protecting value in procurement.

Further, snowballing variations and unscrupulous bidders can unravel otherwise compliant processes. To this end, Treasury Instruction Note 3 of 2021/22 limits in-contract variations to 15% for goods and services and 20% for construction, unless treasury approval is obtained. These controls are designed to curb scope creep and low-ball bidding strategies.

Here, the golden thread re-emerges, when specifications drafted in demand and acquisition phases are now translated into measurable deliverables and key performance indicators. If a bid promised 90% uptime, 15-minute response times, or specific staffing levels, those commitments must appear verbatim in the service level agreement, with data sources, reporting intervals, and penalties attached. Without this bridge, contract managers have little objective basis for enforcement, and suppliers can exploit these gaps.

Effective governance requires clear role definitions. Therefore, it is crucial that End-user departments manage deliverables, supply chain units ensure compliance, finance validate invoices, legal drafts enforceable clauses, and internal audit units provide independent oversight. A live contract register, capturing supplier details, expenditure, variations, and performance scores, is essential for accountability and audit trails.

Finally, contract close-out is not just an administrative step. ‘Lessons-learned’reports should ask whether KPIs were realistic, where and what disputes arose, and whether risks were properly managed. Feeding these insights back into the next demand management cycle can strengthen future specifications, tightening the golden thread.

The Golden Thread in Practice

The three phases of procurement are not isolated checkpoints. They are a continuous loop. Demand management defines the need, acquisition management secures the solution, and contract management enforces the delivery.

Treating demand management as a compliance tick-box exercise or drafting vague specifications can unravel the thread. However, specifications grounded in constitutional values, informed by market engagement and carried through to contract performance, arguably creates procurement systems that are fair, transparent, and cost-effective.

South Africa spends more than R1 trillion annually on goods, services, and works. Ensuring that this spend delivers real value for money is one of the state’s most powerful developmental tools from a service delivery perspective. Following the golden thread of coherent, complete and fair specifications through these stages of procurement is not just good practice, it is a Constitutional obligation.

If your institution has grappled with failed tenders, costly disputes or underperforming contracts, the problem may lie not simply in evaluation or monitoring alone, but in the specifications that tie the entire process together.

Chad Phillips
Senior Associate | LLB LLM (Public Procurement Regulation and Policy)
Corporate Advisory and Forensic Services