The “provision of goods and services” as government procurement under section 217 of the Constitution

The Supreme Court of Appeal held that the requirements of section 217(1) of the Constitution regarding fair, equitable, transparent, competitive and cost-effective procurement were not met where a private contracting party was providing services to smallholder farmers to promote beef production which the government would otherwise have had to provide itself through its development agency.  It was therefore the “provision of goods and services” for the purposes of section 217.

Although the direct beneficiaries of the goods and services were the smallholder farmers, the department and its agency also benefited from the work done by the agency.  Goods were provided in the form of beef weaners together with veterinary kits and food supplements.  Services were provided such as training and mentorship to the smallholders.  In this sense the private contractor was also providing goods and services to the state which was relieved of the task of doing so directly.  The procurement provisions in section 217(1) had not been met.  The court declared the contract invalid which preserved the accrued rights of the parties but not any further rights under the invalid agreement.

Eastern Cape Rural Development Agency v AgriBee Beef Fund [2022] ZASCA 2 (6 January 2022)