TL;DR: (Too long, didn’t read)
The Public Procurement Act 28 of 2024 has been signed into law, but as at September 2026 its provisions are not yet in force. Public procurement, including construction tenders, currently still runs under the existing framework, the Public Finance Management Act, the Municipal Finance Management Act, and the Preferential Procurement Policy Framework Act, while National Treasury finalises the regulations needed before the new Act can commence. Either way, if you want to bid on public projects, you need your tax and compliance status in order, your supplier registrations current, and a plan for meeting guarantee requirements such as bid and performance guarantees. This article explains the basics in plain terms and is general information only, not legal or financial advice.
Government work can be steady, well-paying, and good for a growing construction business. It can also be confusing to get into if you’ve never bid on a public tender before.
The Public Procurement Act 28 of 2024 will change some of the rules around how government buys construction services, once it comes into force. If you are a contractor thinking about bidding on public construction tenders, it helps to know what the Act will do, and what you actually need to have in place right now under the framework that still applies.
This is general information. For anything specific to your business or a particular tender, check with the relevant procuring authority or a professional adviser.
What the Public Procurement Act actually is
The Public Procurement Act was assented to on 18 July 2024 and published in the Government Gazette on 23 July 2024. It’s a national law that will set out how organs of state, meaning government departments, municipalities and other public bodies, must go about buying goods, services and works, including construction.
As at September 2026, the Act has been signed into law but its provisions are not yet in force. Section 69 of the Act allows the President to bring it into operation by proclamation, and to do so in phases, on different dates for different categories of procuring institutions. Most provisions also need regulations first. National Treasury published draft General Public Procurement Regulations for public comment in April 2026, and has confirmed that the current procurement framework, under the Public Finance Management Act, the Municipal Finance Management Act, and the Preferential Procurement Policy Framework Act, remains in place until the relevant provisions of the new Act and its regulations take effect.
Procurement rules are currently spread across these older laws and regulations. The new Act aims to bring them under one framework once it takes effect, and it will also set rules for preferential procurement, which is how government gives certain bidders an advantage based on factors like BBBEE status, local content, or being a small or emerging business.
For a builder or contractor, the practical takeaway is simple: the Act will be the rulebook government follows once it is in force. Until then, the current framework, the PFMA, MFMA and PPPFA, still governs how public tenders are run. Knowing that the new rulebook is coming, and roughly what it will cover, puts you in a better position to prepare.
For the exact legal text, see the sources listed at the end of this article, or consult the relevant government department directly.
Why this matters if you build for a living
Private clients pay when they’re happy. Government pays according to a process, and that process is shaped by procurement legislation.
If your business currently relies only on private clients, homeowners, developers, or property managers, public tenders can be a useful way to diversify your pipeline. Government departments, municipalities, provincial roads agencies, and state-owned entities all commission construction work: roads, schools, clinics, housing, water infrastructure, and more.
The catch is that public procurement has more paperwork and more formal requirements than most private jobs. Missing one requirement, even a small administrative one, can get a bid disqualified before anyone even looks at your price.
Getting your compliance basics in order
Before you think about which tenders to chase, sort out the administrative side of your business. Most public tenders will ask for some combination of the following:
- Tax compliance status. You’ll usually need a valid tax clearance or compliance status from SARS. This is checked electronically in most cases, so keep your tax affairs current rather than trying to fix things at the last minute.
- Company registration documents. CIPC registration, a valid tax number, and BBBEE certification or affidavit, depending on your annual turnover.
- CIDB registration. The Construction Industry Development Board grading determines which size and class of construction contract you’re allowed to bid on. If you’re not registered, or your grading doesn’t match the tender value, you won’t be considered. See our CIDB rating system breakdown here.
- Supplier database registration. Many public bodies require bidders to be registered on the Central Supplier Database or a similar municipal or provincial database before they can even submit.
None of this is unique to the new Act. But because the Act, once in force, will formalise the procurement process further, procuring authorities are likely to apply these requirements even more consistently in future.
Understanding what a tender document actually asks for
Tender documents can run to dozens of pages. Most of that length is administrative: forms to sign, declarations to complete, proof of registration to attach.
Read the tender document from front to back before you start pricing the work. Look specifically for:
- The closing date and submission method (many are now electronic)
- Mandatory eligibility criteria, such as CIDB grading or BBBEE level
- Required guarantees, and their value as a percentage of the contract price
- The evaluation method, since price is not always the only factor
- Site briefing or compulsory clarification meeting dates
If any part of the document is unclear, most tenders allow written questions during a set period. Use that channel rather than guessing.
Guarantees: the part that catches people out
Here’s where a lot of smaller contractors run into trouble, even after doing everything else right.
Many public tenders require a bid guarantee, sometimes called a tender guarantee, before your bid will even be considered. This guarantee protects the procuring authority if you win the tender but then withdraw or fail to sign the contract. If you’re awarded the work, you’ll typically then need a performance guarantee, which protects the client if the contract isn’t completed as agreed.
These guarantees are usually set as a percentage of the contract value, and for a mid-sized construction contract, that can be a significant sum.
Some contractors try to cover this with cash, tying up working capital that would otherwise go toward materials, wages, or equipment. Others arrange a guarantee facility through an insurer or guarantor instead, which can free up that cash while still meeting the tender’s requirement. Any such facility is subject to the guarantor’s own assessment and terms, and issuing a guarantee is never automatic or guaranteed in advance.
CivilSure arranges construction guarantee facilities for contractors, subject to underwriting and terms.
Building a bidding routine, not a one-off scramble
Contractors who do well with public tenders usually treat it as an ongoing process rather than something they do once and hope for the best. A few habits that help:
- Keep your CIDB grading and BBBEE documents renewed before they expire, not after.
- Register on supplier databases for the municipalities and departments relevant to your area, even before you see a specific tender.
- Track tender bulletins or department websites regularly, since opportunities are often published with short lead times.
- Cost your bids properly, including the value of any guarantee you’ll need to arrange, so your final price reflects the real cost of doing the job.
None of this guarantees you’ll win work. It does mean you won’t lose a bid over something avoidable.
Ready to look at your guarantee options?
If you’re about to bid on a public tender and want to understand how a bid or performance guarantee facility works before you approach anyone, get in touch. All facilities are subject to underwriting and terms.
Common questions
Does the Public Procurement Act 2024 change how much guarantee I need to provide?
The Act will set the overall framework for public procurement once it comes into force, but even then, the specific guarantee percentage and requirements will be set out in each individual tender document. For now, guarantee requirements are set by the tender document under the current procurement framework. Either way, always check the tender itself rather than assuming a fixed rule.
Do I need CIDB registration for every government construction tender?
Most public construction tenders require CIDB registration at a grading that matches the contract value and type of work. Some smaller municipal jobs may have different requirements, so confirm this with the specific tender document or the CIDB directly.
What's the difference between a bid guarantee and a performance guarantee?
A bid guarantee protects the procuring authority if a bidder withdraws or fails to sign after winning. A performance guarantee protects the client if the contractor doesn’t complete the contract once work has started. They’re usually required at different stages of the same tender process.
Can I use cash instead of a guarantee facility for a public tender?
Some contractors do put down cash to cover a guarantee requirement, but this ties up working capital for the duration of the contract. A guarantee facility arranged through an insurer or guarantor is an alternative, subject to that provider’s own assessment and terms.
Where can I find current public tenders for construction work?
Government departments, provincial bodies, and municipalities typically publish open tenders on their own websites or in official tender bulletins. Checking these directly is the most reliable way to find current opportunities relevant to your business.
Sources
- South African Government, Public Procurement Act 28 of 2024: gov.za/documents/acts/public-procurement-act-28-2024-english-setswana-23-jul-2024
- SAFLII, Public Procurement Act 28 of 2024: saflii.org/za/legis/consol_act/ppa28o2024234
- National Treasury, Media Statement: Commencement of Public Procurement Act, 2024 (13 August 2024): treasury.gov.za
- National Treasury, Draft General Public Procurement Regulations, 2026, published for public comment (16 April 2026): treasury.gov.za
- Infrastructure News, Surety, Bonds and Guarantees 101: infrastructurenews.co.za
