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.
Refrigerated Cross-Border Transport and clearing of cargo; including payment of import Value Added Tax (VAT) for the import of the Foot-and-Mouth Disease (FMD) vaccines from Botswana via the Kopfontein Border Post 2018-10-29 11:00 ARC/
Installation of Speed humps and Rumble strips on P12-2.: Civil Engineering services: Tender must be registered as grade 2CE only with the CIDB register of contractors.Tender must be registered as Emerging Contractors in the Vukuzakhe Emerging Contractor Development Programme (as per database of Department of Transport) 2018-10-23 11:00 ZNT373T/ C237/ 12000/ S/ 11
Bontle Ke Botho (BKB) Greening Project 2018/19 2018-10-12 11:00 GT/ GDARD/ 130/ 2018
Betterment & Re-graveling of D88 in the Amajuba District. 2018-10-18 11:00 C253/ 1819/ BR/ 796
Betterment & Re-graveling of D88 in the Amajuba District. 2018-10-18 11:00 C253/ 1718/ BR/ 823
SANParks invite prospective bidders to submit offers for a Three (3) Year contract for Corrective Maintenance & Renovations on Infrastructure in Kgalagadi Transfrontier Park, Northern Cape Province. 2018-10-19 11:00 GNP- 017- 18
The RAF invites a suitable service provider to provide the Road Accident Fund (RAF) rented office space for the RAF East London Regional Branch. 2018-10-19 11:00 RAF/ 2018/ 00044
Appointment of a Construction Service Provider (SP) to Undertake the Maintenance and Repairs of Existing Facilities at Roodeplaat Dam Provincial Nature Reserve (RDNR). 2018-10-12 11:00 Gauteng: Agriculture and Rural Development: Agriculture
Provision of Office Accommodation: Empangeni Local Office for a leased period of 5 years.(Leases ranging from seven to ten years will also be considered). 2018-10-26 11:00 48/ 2018
Appointment of a Software Development Service Provider to Review, Design, Develop and Maintain the Integrated Management Information System (MIS) For The CETA. 2018-10-12 11:00 006– 2018/ 2019
Provision of Office Accommodation: Stanger Satellite Office for a leased period of 5 years.(Leases ranging from seven to ten years will also be considered). 2018-10-26 11:00 53/ 2018
Provision of Office Accommodation: Limpopo Mpumalanga Provincial Office for a leased period of 5 years. (Leases ranging from seven to ten years will also be considered). 2018-10-26 11:00 47/ 2018
Removal and Disposal of Printing Aluminium Lithographic Plates from Shore Base Naval Publication Unit, Simon’s Town as per Statement of Work 2018-11-14 11:00 SPSC- B- 046- 2018
Provision of Office Accommodation: Bochum Satellite Office for a leased period of 5 years.(Leases ranging from seven to ten years will also be considered). 2018-10-26 11:00 49/ 2018
Renovations and repairs of E-Block, Bluff Military Base Durban as per Statement of Work 2018-10-23 11:00 SPSC- B- 045- 2018
Provision of Office Accommodation: Kimberley Local Office for a leased period of 5 years.(Leases ranging from seven to ten years will also be considered). 2018-10-26 11:00 40/ 2018
Provision of Office Accommodation: Victoria West Satellite Office for a leased period of 5 years.(Leases ranging from seven to ten years will also be considered). 2018-10-26 11:00 44/ 2018
Upgrade of Security System at Regional Works Unit, KwaZulu-Natal 2018-10-25 11:00 SPSC- B- 044- 2018
Provision of Office Accommodation: Prieska Satellite Office for a leased period of 5 years.(Leases ranging from seven to ten years will also be considered). 2018-10-26 11:00 45/ 2018
Supply and Delivery of Stationery and Paper for the Department of Environmental Affairs and Development Planning for a period of 24 months 2018-10-19 11:00 DEA&DP7/ 2018

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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:

  • Easy to establish as there are no formal procedures... Read More
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