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.
Supply of Integrated Competency Assessment services to SITA for a period of 36 months 2018-12-07 11:00 RFB 1841/ 2018
Provision and Implementation of Integrated Management Information System to Support SASSETA Core Business 2018-11-30 11:00 RFP/ SASSETA/ 201819128
Installation, Configuration maintenance of PABX and Call Centre Management Solution for a period of 12 months with the option to renew 2018-12-10 11:00 RFP/ SASSETA/ 201819129
Supply, Delivery, Installation and Configuration of Firewall and Switches on an outright purchase or rental basis (Managed) and maintenance thereof for a period of 12 months with the option to renew 2018-12-10 11:00 RFP/ SASSETA/ 201819130
Provision of Telecommunication and Internet Services for a period of 12 Months with the option to renew 2018-12-10 11:00 RFP/ SASSETA/ 201819125
Appointment of a service provider for the evaluation, due diligence and monitoring of Discretionary Grants until 31st March 2019 2018-12-10 10:00 RFP/ SASSETA/ 201819127/ 1
The rendering, manufacturing, repairing, fitting and supplying of aids for orthotic and prosthetic services to institutions in the Eden and Central Karoo District under Western Cape Government the Department of Health for a three year period 2018-12-07 11:00 WCGHCC031/ 1/ 2018
Appointment of a Service Provider to Facilitate Organisational Design and Related Services for RTMC. 2018-12-10 11:00 RTMC BID 19/ 2018/ 19
George: District Office: CBD : New Lease Office Accommodation For SASSA: Eden Karoo: 500m2, 10 Undercover Parking Bays for a 3 year lease period - Category - C 2018-11-28 11:00 CPTL27 / 18
Appointment of a Service Provider to Provide Online Banking Gateway Platform to the RTMC for a period of five years. 2018-12-07 11:00 RTMC BID 20/ 2018/ 19
George: Local Office: CBD: New Lease Office Accommodation For Dept of Rural Development & Land Reform: Eden Karoo: 1847.76m2, Secured parkingparking bays for GG vehicles, 2 Dedicated parking bays for persons with disabilities, 2 Parking bays for SMS, 20 Parking for private vehicles for staff & 6 safe parking bays for visitors & departmental customers for a 5 years lease period - Category - A, B,& D 2018-11-28 11:00 CPTL29 / 18
The RAF hereby invites service provider for Management and Administration of Fraud Hotline and Awareness for a period of five (5) years 2018-12-14 11:00 RAF 2018/ 00053
George : Local Office : CBD : New Lease Office Accommodation For SASSA: Eden Karoo: 778.75m2, 8 Lockup garages, 2 open parking bays & 5 visitors parking bays for a 5 years lease period - Category - A, B,& D 2018-11-28 11:00 CPTL28 / 18
TOR Research to Assess the Financial Feasibity of a Basic Income Grant 2018-12-19 10:00 Nedlac 2018/ 19/ 03
Repairs and upholstery of chairs, 29 chairs 2018-11-23 11:00 ZNQ 61/ 08/ 2018
Impact of the National Social Security Fund (NSSF) on Saving and Investment Markets 2018-12-19 14:00 Nedlac 2018/ 19/ 02
Compacting and disposal of forfeited and boarded saps vehicles to the South African Police Service: Nationally for a period of three (03) years 2018-12-14 11:00 19/ 1/ 9/ 1/ 68TV(18)
Voice, Data and Managed IT Services 2018-12-14 11:00 Nedlac 2018/ 19/ 04
Contract for the removal of wet waste (pigswill) from SAS Saldanha, West Coast for a period of two (2) years. Evaluation 80/20 principle. Validity period 120 days. 2018-12-11 11:00 SPSC- B- 051- 2018
The National Consumer Tribunal seek to appoint a software developer resource to assist with ongoing programming, database and technical support to the in-house developed NCT Case Management System (CMS). 2018-12-14 15:00 NCT- 4/ 3/ 2/ 31

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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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