Issue Date: 
Tuesday, February 7, 2017

Brand new Preferential Procurement Regulations 2017 for Tenders

The brand new Preferential Procurement Regulations 2017, has been finalized and was gazetted on 20 January 2017. There are some interesting changes and challenges that we will discuss during the coming months. This is 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 provide for a mechanism 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 an outcome 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, commitment made by government was 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, co-operatives as well as township and rural enterprises. Also, giving impetus to the NGP the highlights of the revision are: -

  • Introducing the prequalification criteria which allow the advancement of these selected categories of people by limiting competition 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, the high value tender in the region of R30 million and above tend to be awarded to established companies due to economies of scale and affordability, leaving out categories of aspiring businesses, the revised regulations requires all those with 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 give the smaller companies greater chances to compete in the economy in a meaningful way. (Refer to 6 & 7)

Commenting on the release of the regulations, Minister Pravin Gordhan says 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 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.

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www.how2tender.com

Title Closing Date Tender No.
Supply and delivery of software 2017-12-14 11:00 GK1180364
Supply, Fitment and Maintenance of a Fleet Tracking System to Government Vehicles for a period of 5 years. 2018-01-26 11:00 SCMU 10 17/18 - 0011
Appointment of a suitable service provider to manage funds for the National Skills Authority (NSA) on behalf of the Department of Higher Education and Training 2017-12-26 11:00 DHET115
Manufacture, Supply, deliver and Installation of High Voltage (66kv) Circuit Breakers 2018-01-12 12:00 BSM 46/18
Supply and delivery of laboratory reagents and equipment for pharmacology Department at Universitas Central Hospital. 2018-01-26 11:00 DOH (FS) 02/17/18
Supply, delivery and Installation of High Voltage (66kv) Control Panels 2018-01-12 12:00 B/SM 45/18
Supply, upgrade and replacement of sewer networks in the Witzenberg Area (3 year tender) 2018-01-22 12:00 BID 08/2/15/46
Supply, Delivery and Commissioning of a Roller Ironer Complete Package and Three (3) Extractors 2018-01-26 11:00 DOH (FS) 05/2017/2018
Laundry and Ironing Services 2018-01-26 12:00 SCM11-2017-18
Construction of a new store and toilets at Napier Water Treatment Plant 2018-01-26 12:00 Q13-2017-18
Supply and installation of rigid security fencing in the WC024 area, (the municipality reserves the right to accelerate the project in the year which the funds becomes available) 2018-01-26 12:00 BSM 17/18
Supply and Installation of Lectern 2017-12-20 11:00 GK11800362
Supply and fitment of new tyres, tubes and provision of tyre repair and other related services 2018-01-10 12:00 08/2/15/55
Appointment of a suitable information system provider to provide an integrated management information system (MIS) for a period of two (2) years (with an option to extend the contract for a further 2 years) 2018-01-29 11:00 TETA17/IT/0016/MIS
Sale of church site in Pine Valley, Wolseley 2018-01-05 12:00 08/2/15/63
Appointment of a suitable information system provider to provide an integrated Enterprise Resource Planning (ERP) for a period of two (2) years (with an option to extend the contract) 2018-01-29 11:00 TETA17/IT/0017/ERP
Stringing and cabling at Everest substation (Re-issue) 2018-02-02 10:00 PSCED0043R
Stringing and cabling at Harvard ss and minor works at Merapi ss (Re-issue) 2018-02-02 10:00 PSCED0045R
Supply and delivery of Electrical Cables 2017-12-15 10:00 REQ02881
Construction of Tshiame (Makgolokweng) new, police station: Free State Province 2018-02-06 10:30 19/1/9/1/109TB(17)

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Functionality and Tenders

In all competitive bids (tenders) you as the bidder will have to respond to Functionality. You will need to score a set minimum number of points, measured as a percentage, on Functionality of a competitive bid (tender) in order to advance to the next phase of evaluation in the tender process.

Usually Organs of State evaluate competitive bids (tenders) as follows:

  • The tender response is evaluated on Functionality where the bidder must score points out of a maximum of 100 points.
  • A threshold of between 65 to 75 out of 100 points... Read More
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