Procurement Deviations: Types, Rules & Red Flags

A deviation is when a government entity procures goods or services without following the standard competitive bidding process. While deviations are sometimes necessary and legitimate, understanding them helps bidders identify opportunities, spot red flags, and hold government accountable.

Who This Is For

• SMEs wanting to understand procurement patterns
• Researchers analysing government spending
• Civil society monitoring public procurement
• Journalists investigating procurement trends

What Is a Deviation?

Under normal circumstances, government entities must follow a competitive bidding process to procure goods and services. This typically involves:

1. Publishing a tender notice
2. Allowing sufficient time for bids (usually 21+ days)
3. Evaluating bids on functionality and price
4. Awarding to the highest-scoring compliant bidder

A deviation is when an entity skips or modifies this process. The Treasury Regulations and Treasury Instruction Notes set out when deviations are permitted and what approval is required.

Types of Deviations

There are four main types of deviations that government entities may use:

Sole Supplier

A sole supplier deviation is used when only one provider can supply the required goods or services. This is typically justified when:

• The supplier holds exclusive rights (patents, intellectual property)
• Proprietary technology requires the original manufacturer
• Specialized expertise is only available from one provider
• Compatibility with existing systems requires specific supplier

When It's Legitimate

• Original equipment manufacturer (OEM) spare parts
• Licensed software from exclusive distributor
• Patented medical equipment maintenance

When It's Concerning

• Common goods available from multiple suppliers
• No market research documented
• Same supplier repeatedly used as "sole supplier"

Emergency Procurement

Emergency deviations are used when urgent circumstances make normal procurement impossible. Treasury Instruction Note 3 of 2021 defines emergencies as situations where:

• There is an imminent threat to life, health, or safety
• Essential services will be disrupted
• Critical infrastructure requires immediate repair
• Unforeseen circumstances require urgent action

When It's Legitimate

• Natural disaster response
• Critical equipment failure threatening service delivery
• Public health emergency (e.g., COVID-19 response)

When It's Concerning

• Poor planning cited as "emergency"
• Emergency extended beyond 6 months
• Repeated "emergencies" for predictable needs

Contract Expansion

An expansion deviation extends the scope or value of an existing contract beyond what was originally awarded. This is used when:

• Additional work is required under an existing contract
• Scope needs to be increased for project completion
• Quantities need to be increased beyond original estimates

When It's Legitimate

• Unforeseen site conditions during construction
• Regulatory changes requiring additional work
• Service demand exceeds original projections

When It's Concerning

• Original bid was unrealistically low to win
• Expansion exceeds 50% of original value
• Multiple expansions on same contract

Variation

A variation modifies the terms of an existing contract without necessarily expanding the scope. This includes:

• Changes to specifications or requirements
• Modifications to delivery schedules
• Price adjustments due to documented cost changes
• Changes to payment terms

Legitimate vs Concerning Deviations

Not all deviations indicate problems. The key indicators of legitimate deviations:

• Proper approval obtained before procurement
• Clear documentation of justification
• Value for money demonstrated
• Reported to Treasury as required

Red Flags to Watch For

The following patterns may indicate problematic procurement practices:

• High deviation rate: Entity uses deviations for majority of procurement
• Repeat suppliers: Same company benefits from multiple deviations
• Just-under-threshold: Values consistently just below approval thresholds
• Treasury declined: Deviations that Treasury refused to approve
• Pattern of emergencies: Repeated "emergencies" for predictable needs

Treasury Approval Process

National Treasury receives deviation requests and may approve or decline them. The process works as follows:

1. Entity submits deviation request with justification
2. Treasury reviews against regulations and value for money
3. Treasury approves, declines, or requests more information
4. Entity may proceed if approved, must retender if declined
5. All deviations reported quarterly to Parliament

What Bidders Can Do

As an SME, you can use deviation data to make informed business decisions:

• Research entities: Check deviation rates before investing time in tenders
• Identify opportunities: Expired emergency contracts must be retendered
• Request information: Use PAIA to request deviation justifications
• Report concerns: Submit concerns to Treasury or Public Protector

Frequently Asked Questions

Next Steps

Now that you understand deviation types, explore further:

• View deviation data in Transparency Dashboard
• Learn to read Treasury deviation reports
• Understand your rights as a bidder
• Check entity transparency scores