Section 5 of the Preferential Procurement Policy Framework Act (Act No. 5 of 2000 – “the Act”) states that the Minister may make regulations regarding any matter that may be necessary or expedient to prescribe in order to achieve the objects of this Act. The judgement of the Constitutional court was that the impugned regulations 3,4 and 9 of the 2017 Regulations amounted to determining preferential procurement policy which was the responsibility of the organ of state in terms of Section 2(1) of the Act. The Minister made the Preferential Procurement Regulations 2022 in line with the Constitutional Court judgement to prescribe what is necessary or expedient in order to achieve the objects of the Act.
It is important to note that the Constitutional Court did not rule that State-Owned Companies can make their own regulations as that would be going against what the Act provides, but it did rule that each organ of state is empowered to determine its own preferential procurement policy (in terms of section 2(1) of the Act) and that these policies must still comply with the Act, which includes the 2022 Regulations.