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The Presidency had three clean audits in a row, but its fourth slipped away after it bought R1.7m in groceries using supplier quotes instead of an open tender.
Under National Treasury's rules, government departments can use supplier quotes for purchases up to R1m. Above that amount, they generally have to advertise an open tender. The Auditor-General therefore classified the Presidency's grocery spending as irregular.
Read more: R1.7m in groceries costs Ramaphosa’s office its clean audit
If you handle or review purchases for a government department or public entity, you need to know which process to follow to avoid making the same mistake.
This guide explains when supplier quotes are allowed, when an open tender is required, and how exceptions to the rules work.
Why the old procurement rules still apply
Since the early 2000s, South Africa has had different rules for how government institutions buy goods and services.
National and provincial departments follow the Public Finance Management Act (PFMA), which took effect in 2000, while municipalities follow the Municipal Finance Management Act (MFMA), introduced in 2004.
A separate law, the Preferential Procurement Policy Framework Act of 2000, sets out how government tenders are scored based on price and other goals, such as supporting disadvantaged suppliers.
In July 2024, President Cyril Ramaphosa signed the Public Procurement Act. The new law was meant to bring government procurement under one set of rules. It would also have introduced stricter requirements for giving certain suppliers preference, including reserving some contracts for qualifying businesses and encouraging the use of locally produced goods.
However, the Act never took effect. On 17 September 2026, the Constitutional Court declared it invalid because Parliament hadn't given the public a proper opportunity to comment on major changes to the proposed law.
As a result, the existing procurement rules remain in place.
When must you use an open tender?
The amount you plan to spend determines whether you can ask suppliers for quotes or must advertise an open tender. However, the spending limits differ depending on where you work.
National and provincial departments, constitutional institutions, and certain public entities follow National Treasury's procurement rules, while municipalities have their own rules and spending limits.
Click the arrows below to see when an open tender is required for each type of government institution:
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R1 million
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R300,000
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R200,000
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R750,000
All amounts include VAT. Purchases up to R2,000 can generally be made using petty cash, if allowed by your department or municipality. Above R2,000 and up to the applicable limit, you can use written supplier quotes.
National and provincial departments must normally get at least three written quotes from suppliers registered on the Central Supplier Database (CSD). Municipalities must normally get three quotes from suppliers on their approved supplier list.
If you can't get three quotes, you must record why and get approval before placing the order. In a department, this comes from the accounting officer or someone they've authorised. In a municipality, it comes from the chief financial officer or an authorised official. Keep these records for audit purposes.
For open tenders, national and provincial departments must advertise the tender and publish the winning bid on the eTender Publication Portal. Municipalities have separate advertising requirements, so check your municipality's procurement policy.
Can your department change the tender limit?
Your department can also set stricter spending limits than National Treasury's rules require. For example, it might require open tenders for purchases above R500,000 to give larger purchases more scrutiny.
If that's the case, you can't use three supplier quotes for a R750,000 purchase simply because National Treasury's limit is R1m. You must follow your department's lower limit.
However, your department also can't raise the limit above R1m. If its procurement policy allows supplier quotes for purchases up to R1.5m, that rule doesn't comply with National Treasury's requirements and you should raise the problem with your head of procurement.
If purchases have already been made under an incorrect limit, report the suspected irregular spending immediately in writing to the accounting officer or an authorised official.
Make sure you always check your department's supply chain management (SCM) policy before approving a purchase.
How to spot purchases split to avoid a tender
Government departments can't split a large purchase into smaller orders just to avoid an open tender. The spending limit applies to the total amount they expect to spend on the goods or services, not just each individual order.
For example, imagine a department knows it will need R1.8m worth of catering supplies over the next year, or about R150,000 a month.
Instead of advertising an open tender, it asks three suppliers for quotes each month and places a separate order for R150,000.
Although each order falls below the R1m limit, the department knew from the start that it needed R1.8m worth of supplies. It should have advertised an open tender for the full amount. Splitting the purchases into smaller orders could result in irregular expenditure.
As an accountant, you can help catch these problems before payments are made. Look out for:
Several orders for the same supplier placed on the same day or within a few days.
Repeat purchases of the same goods or services that exceed the tender limit when added together.
Monthly or quarterly orders for goods or services the department already knows it will need throughout the year.
If you notice any of these patterns, check whether the orders are part of one larger purchase. Add up the expected spending and compare it with your department's tender limit.
If the total exceeds the limit, raise the issue with your procurement team before any further orders are placed. If purchases have already been made using the wrong process, report the suspected irregular spending immediately.
When can you skip an open tender?
Sometimes a government department can't follow the normal tender process. For example, if a storm damages a government building and urgent repairs are needed to make it safe, there might not be enough time to advertise an open tender.
Under Treasury Regulation 16A6.4, a department can use another purchasing method if following the normal tender process would be impractical.
This could mean asking suppliers for quotes or approaching a limited number of suppliers instead of advertising an open tender.
However, the department must explain why an open tender wasn't practical, record those reasons, and get approval from its accounting officer before proceeding.
The accounting officer must report the use of an alternative purchasing method to the relevant treasury and the Auditor-General within 14 days of finalising the purchase.
For purchases above R1m, National Treasury also requires a report within 10 working days of the contract award being approved.
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