Preferential procurement and emerging enterprises

Abstract

The policies of the previous dispensation created racial disparities in South Africa and resulted in a need for transformation of public procurement systems to enable historically disadvantaged individuals (HDIs) to access government procurement opportunities. The Preferential Procurement Policy (PP Policy) was adopted to regulate preferential procurement in government in order to accelerate the award of procurement opportunities to companies that are owned by HDIs. The purpose of the research was to investigate the benefits of preferential procurement to HDIs in the light of the perception that the PP Policy is not achieving its objectives. The qualitative methodology was used to collect and analyse the data using the case study design. The research revealed that, although the results of implementing the policy are still below the expected outcomes due to stringent legislative requirements and corruption, many emerging HDI-owned enterprises benefit from preferential procurement opportunities. The study further contends that the achievement of the intended objectives of PP Policy can be improved by reviewing the model of implementation of the policy, improving awareness and accountability of the key stakeholders and providing unconditional support for SMMEs.