Treasury Regulations: The Complete Bidder's Reference
A comprehensive reference guide to South African procurement thresholds, Treasury Regulations, and the rules that govern how government buys goods and services.
South African government procurement operates within a carefully structured set of thresholds and regulations. Knowing exactly which rules apply to which contract value is essential for understanding how buying decisions are made — and how to position your bid accordingly.
The Regulatory Framework
Treasury Regulations are issued by the National Treasury under Section 76 of the PFMA. Chapter 16A contains the supply chain management regulations. These are supplemented by:
- National Treasury Circulars — issued periodically to update thresholds or clarify application
- Preferential Procurement Regulations, 2022 — issued under the PPPFA
- National Treasury SCM Practice Notes — practical guidance on interpretation
- Entity-specific SCM Policies — each organ of state has its own SCM policy that may apply stricter standards than the minimum
Core Procurement Thresholds
PFMA Entities (National and Provincial Departments and Public Entities)
| Transaction Value | Procurement Method | Process |
|---|---|---|
| Up to R2,000 | Petty cash / imprest | Single supplier, cash payment |
| R2,001 – R30,000 | Single quotation | One written quotation sufficient |
| R30,001 – R500,000 | Quotation process | Minimum 3 written quotations |
| Above R500,000 | Formal competitive bidding | Advertised tender, minimum 21 days |
Important caveat: These are minimum requirements. An entity’s own SCM policy may require three quotations even below R30,000, or may set formal tender thresholds lower than R500,000. Always check the specific entity’s procurement policy.
MFMA Entities (Municipalities and Municipal Entities)
| Transaction Value | Procurement Method |
|---|---|
| Up to R2,000 | Petty cash |
| R2,001 – R30,000 | Single quotation |
| R30,001 – R200,000 | Three written quotations |
| Above R200,000 | Formal competitive bidding |
Note: Municipal thresholds are set by the Municipal SCM Regulations (Government Notice 868 of 2005) and may be adjusted by the Minister of Cooperative Governance.
PPPFA Preference Point System Thresholds
| Contract Value (incl. VAT) | Preference Point System | Price Points | B-BBEE Points |
|---|---|---|---|
| R30,000 – R50,000,000 | 80/20 | 80 | 20 |
| Above R50,000,000 | 90/10 | 90 | 10 |
| Below R30,000 | No formal system | — | — |
Advertising Requirements
Minimum Advertising Periods
eTenders (etenders.gov.za):
- All formal tenders above R500,000 must be advertised on the National Treasury’s eTenders portal
- Minimum advertisement period: 21 calendar days for most tenders
- Higher-complexity tenders: 30+ days is common
- International tenders: 30–60 days
Sector-specific advertising:
- Construction tenders above CIDB Grade 3: must also be published in cidb.org.za
- IT tenders: often advertised on State IT Agency portal (sita.co.za) for SITA-managed categories
- Defence and intelligence: may be subject to restricted or classified tendering procedures
Government Gazette: While the eTenders portal has largely replaced the Government Gazette for tender advertising, some entities still publish in the Gazette for completeness. The Gazette also publishes awards and cancellations.
Tender Documents and Access
Since 2019, National Treasury has encouraged free access to tender documents. Many entities now offer:
- Free download from eTenders portal
- Free collection at premises
- Free email transmission
Some entities still charge a non-refundable tender document fee (R100–R500 is common). This fee cannot be recovered even if you bid and are unsuccessful.
Contract Duration and Extension Rules
Maximum Contract Periods
Treasury Regulations do not specify absolute maximum contract durations, but the following guidelines apply:
Standard services contracts: 3 years maximum without re-tendering (this is convention, not a statutory maximum) Long-term infrastructure: 10–20 years may be appropriate with proper motivation and Treasury approval Transversal contracts: National Treasury’s transversal contracts (e.g., for vehicles, IT equipment, travel) typically run for 2–3 years
Contract Extensions
Extending a contract beyond its original term is a high-risk area for irregular expenditure. The rules:
Value variation: Treasury Regulation 16A (practical guidance) suggests contract value variations up to 15% of original contract value may be approved by the accounting officer without re-tendering, subject to:
- The original contract permitting variations
- The variation being for the same scope
- Documentary motivation
Variations above 15% or scope extensions typically require a new competitive process.
Time extensions: An extension of contract duration (not value) to complete existing scope is less problematic than a scope extension. However, it still requires accounting officer approval and documentation.
Transversal Contracts (RT Contracts)
The National Treasury manages a system of transversal contracts (also called RT Contracts or Rate and Term contracts) for commonly purchased goods and services. These allow organs of state to procure from pre-negotiated contracts without running their own tender processes.
Current transversal contract categories include:
- Passenger and commercial vehicles (RT57)
- Office automation (RT46)
- Computer hardware (RT76)
- Travel management services (RT15)
- Fuel (RT61)
- Stationery (RT45)
For suppliers: Qualifying to supply on a transversal contract gives access to all organs of state on that contract. Application is typically done during the RT contract’s competitive bidding process.
For buyers: Using an RT contract satisfies the competitive bidding requirement — no separate tender is needed for the specific purchase.
Emergency and Sole Source Procurement
Emergency Procurement (16A6.4)
Allowed when:
- There is an immediate threat to health, safety, environment, or essential service delivery
- Competitive procurement is not possible in the time available
- The emergency was not created through negligence or poor planning
Required documentation:
- Written motivation describing the emergency
- Accounting officer approval before procurement (or immediately after, with full motivation, if truly urgent)
- Report to Auditor-General within 10 working days
- Inclusion in quarterly deviation report to Treasury
Sole Source / Single Provider
Allowed where:
- Only one supplier can provide the specific goods/services (proprietary technology, copyright, patent)
- The contracted party is a statutory body or state entity
- Urgency combined with a specific established relationship
Same documentation requirements as emergency procurement apply.
The E-Procurement Environment
South Africa is progressively migrating to electronic procurement:
eTenders (etenders.gov.za):
- Advertising and document downloading
- Award notices
- Cancellation notices
CSD (csd.gov.za):
- Supplier registration and verification
- Supplier status checks
Logis / BAS / SAP: Internal government financial systems that process purchase orders and payments. These are not accessible to suppliers directly but drive payment timelines.
SITA e-Procurement: The State Information Technology Agency manages a separate portal for IT procurement at national level.
Key Treasury Circulars and Practice Notes
Several National Treasury publications provide essential guidance:
Supply Chain Management Practice Note 3 of 2003: Establishes the preferential point system originally (now superseded by the 2022 Regulations but often referenced historically).
National Treasury Instruction Note 3 of 2016/17: Cost containment measures — still partially in effect, restricting certain categories of discretionary expenditure.
National Treasury Instruction Note 3 of 2021/22: COVID-19 related procurement measures (some provisions remain relevant for health sector procurement).
NT Circular 3 of 2023: Updated guidance on supplier payment terms and the 30-day payment obligation.
Use the Tenderpreneurs PFMA Assistant to look up specific threshold rules and get answers to procurement compliance questions with legislative citations.