Threshold values for procurement of goods and services by means of petty cash, verbal/written price quotations and competitive bids
Intelligence Summary
National Treasury has gazetted revised monetary thresholds that dictate whether government institutions must use petty cash, verbal quotations, written price quotations, or full competitive bidding processes. This policy shift recalibrates the procurement entry points for suppliers across all spheres of government, immediately affecting which opportunities are openly advertised versus procured through less transparent methods.
Why This Matters for Procurement
Thresholds determine market access — higher competitive bid thresholds mean fewer open tenders and more limited-quotation awards, disadvantaging suppliers not on preferred lists; lower thresholds expand open competition but increase bidding costs.
Key Points
- National Treasury has updated threshold values determining which procurement method must be used (petty cash, verbal/written quotations, competitive bids)
- Threshold changes directly affect when open competitive bidding is mandatory versus when simpler procurement methods apply
- SMMEs and emerging contractors may see expanded or reduced access to opportunities depending on threshold direction
- All organs of state must align procurement policies and delegation registers to new thresholds immediately
- Non-compliance with prescribed thresholds constitutes irregular expenditure under PFMA/MFMA
Industry Impact
Monetary thresholds for petty cash, verbal quotations, written quotations, and competitive bidding have been updated, altering the procurement method required for different contract values.
Industry-Wide Effect
This recalibration ripples across the entire public procurement ecosystem — it shifts the balance between transparency (open tender) and efficiency (quotations), affects SMME preferential procurement targets, influences bid rigging risks in limited-quotation processes, and requires every organ of state to update delegation frameworks, policy documents, and e-procurement system rules simultaneously.
Affected Sectors
Affected Provinces
Affected Organs of State
Supplier Opportunity Signal
Suppliers must verify current thresholds before quoting — contracts just below competitive bid threshold may be awarded via written quotations to rotation-listed vendors. SMMEs should monitor departmental quotation databases and ensure registration on CSD and relevant departmental supplier databases. Larger firms should track when competitive bids become mandatory to plan bid pipelines.
Risk / Compliance Signal
Procurement above the prescribed threshold without competitive bidding constitutes irregular expenditure. Accounting officers face personal liability. Bidders should verify that awards they participate in follow the correct method for the contract value.
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