Issue Date: 
Tuesday, February 7, 2017

New Preferential Procurement Regulations 2017 for Tenders

The brand new Preferential Procurement Regulations 2017, have been finalized and gazetted on 20 January 2017. There are some interesting changes and challenges that we will discuss during the coming months. We start off with the official media release from National Treasury:

The regulations were initially promulgated in 2001 and revised in 2011 thus making this the second revision since the initial promulgation.

The revision of the Preferential Procurement Regulations of 2011 was largely influenced by the need to empower certain categories (Small Medium and Micro Enterprises (SMME) also classified as EMEs or QSEs, Co-operatives, Township and Rural enterprises) through procurement. This was a product of social dialogue on the New Growth Path (NGP), wherein government and social partners signed a Local Procurement Accord on 31 October 2011. To this end, a commitment was made by government to leverage public procurement.

The revised regulations are also aligned to President Jacob Zuma's pronouncement in his 2015 State of the Nation Address, wherein he said, that government will set-aside 30% of appropriate categories of State procurement for purchasing from SMMEs or co-operatives as well as township and rural enterprises. Also, giving impetus/ incentive to the NGP. The highlights of the revision are:
 

  • Introducing the prequalification criteria, which allows the advancement of these selected categories of people, by limiting competition to only amongst themselves. This restricts the inclusion of well established companies, unless they meet further requirements of subcontracting to these groups, should they (established company) be successful. (Refer to regulation 4).
  • Acknowledging that in the main, that high value tenders in the region of R30 million and above have a tendency to be awarded to established companies, due to economies of scale and affordability, leaving out categories of aspiring businesses. The revised regulations require all those, with the ability to deliver the required service, to demonstrate the element of subcontracting to the categorised groups at a tendering stage. (Refer to regulation 9).
  • Addressing the outcry of the categorised groups, who felt that the threshold of R1 million is too insignificant for them to grow to a level of established companies. Current regulations have increased to R50 million. This now gives smaller companies a greater chance to compete in the economy, in a meaningful way. (Refer to 6 & 7)

Commenting on the release of the regulations, Minister Pravin Gordhan said that the regulations aim to use public procurement as a lever to promote socio-economic transformation, empowerment of small enterprises, rural and township enterprises, designated groups and the promotion of local industrial development. He said this is in line with the current dialogue on inclusive economic growth in South Africa.

To learn more about this and all the other new developments regarding tenders, please attend one of our How-to-Tender workshops. Tender Workshop dates are published on our website at www.how2tender.com. For more information on the tender courses please email Werner at werner@how2tender.com.

This article was written by Werner van Rooyen, Director of HowToTender (Pty) Ltd. which specializes in tender consulting and tender training.

Title Closing Date Tender No.
Panel of professional civil and structural engineers. 2018-10-10 12:00 37/2018
Supply & delivery of all weather mens jackets & extreme slip safety boot 2018-09-27 10:00 DSC0019753
Panel of professionals (electrical engineers on turnkey basis). 2018-10-10 12:00 38/2018
The University of South Africa invites tenders from suitably qualified service providers to provide the University with professional electrical engineering services for the Sunnyside development design and project management 2018-10-03 12:00 PT2018/I8
Invitation for proposals to provide catering and decor services for the Department's Head of Mission Conference which will take place from 19 to 25 October 2018 at Department of International Relations and Cooperation, Pretoria, Gauteng. 2018-10-12 11:00 DIRCO 04/2018/19
Supply and deliver male torso mannequin with black jersey cover, metal base and metal neckpiece. 2018-09-25 11:00 GQ09181944
As and when supply and delivery of various CSR Casting items for 1064 project, to RSE Business Transnet engineering, Koedoespoort. 2018-10-16 10:00 TE18-KDS-8GS-06060
Surfacing of Lusikisiki Internal Streets Phase 2. 2018-10-16 12:00 IHLM/19/08/2018-19/TS
Painting of palisade fencing at Ezamokuhle 1, Ezamokuhle 2, Grootdraai and Kendal ambient air quality sites using Cowrie Gold Colour Powder Coating Paint. 2018-11-01 10:00 ERIC1107
Supply and delivery of laboratory chemicals, reagents, glassware and consumables as and when required for a period of five (5) years. 2018-10-31 10:00 ERIC0588
Detail design, procurement, transport to site and installation and commissioning of Induced Draught Fan at Tutuka Power Station. 2018-10-06 10:00 pscesd0095R
Provision of Facility Management Services to Eskom Real Estate in the Free State Operating Unit for 3 years (NONE TECHNICAL) Cleaning & Gardening. 2018-11-15 10:00 MdB18/24
Supply, Installation and Maintenance of an Integrated Telecommunications Solution for Sol Plaatje Municipality on a 36 Month Rental Contract. 2018-10-22 11:00 FIN/IT02/2018
Provision of learner ship programme to Eskom employees for the period of 12 months on "as and when required" basis. 2018-10-18 10:00 CORP 4518
Provision of Facility Management Services to Eskom Real Estate. 2018-10-08 10:00 MdB18/23
Supply & install security manhole covers at Blackheath Water Treatment Plant. 2018-10-03 12:00 SK11900089
The University of South Africa invites tenders from suitably qualified service providers to provide the University with professional mechanical engineering services for the Sunnyside development design and project management 2018-10-03 12:00 PT2018/19
Supply and Installation of New Street and Area Lighting 2018-10-12 12:00 UZ08/2018
Services of an investment Consultant 2018-10-02 12:00 PT2018/20
Lease Application: Port of East London: Latimer's Landing 2018-10-12 12:00 ELS/HPM 3/17/09/2018/3D

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Advantages and disadvantages of Consortiums

Consortiums are often considered as entities to use when responding to tenders in South Africa. The question that arises is whether to use a Consortium or a Joint Venture when responding to a tender. To help you with this we have compiled a list of advantages and disadvantages for both Consortiums as well as Joint Ventures. In this article we list the advantages and disadvantages of Consortiums. Look out for the same article on Joint Ventures.

Consortiums Advantages:

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