National Treasury recently issued an Instruction Notice advising government event organisers that they should procure venues and related services from other government entities which have such facilities, without the need to follow a cumbersome supply chain management or tendering process.
In essence, it means that the state wants to optimise the use of its venues at all levels of government and encourages other organs of state to rather use those venues than commercial venues, where feasible.
The incentive for government event organisers is that they would not be required to follow an open competitive bidding process, which could also be a boon where events are organised on an urgent basis, thus eliminating the need to issue requests for quotations on short notice and cutting out all the required administrative compliances.
The Instruction Notice is directed at all entities at national or provincial level, whether it is a department or another state entity, any other entity listed in Schedules 2 and 3 of the Public Finance Management Act (PFMA), or any “organ of state” as defined in Section 239 of the Constitution. However, it does not make specific mention of a municipality.
However, the procuring entity must also have a supply chain management policy that expressly allows for buying goods and services from other organs of state and must motivate the reasons for going that route, as well as reporting it on the relevant platforms.
According to Gerrit Davids, Lead Advisor at TaranisCo Advisory, “The Instruction Notice gives clear authority to one organ of state to host an event at the facilities of another organ of state, in this instance, i.e. ‘conference facilities and mandatory goods and services related to the use of such facilities’, where the former is allowed by law to render such services to the latter.”
“The organ of state providing the venue and related services like catering and other services may also not sub-contract more than 50% of the contract value to third parties or apply a mark-up to any such services,” Mr Davids said.
The Instruction Notice came into effect on 14 September 2026 and will be in force for a period of twelve months thereafter.
