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.
Appointment of a service provider for the provision of Information Technology Disaster Recovery Solution for the Mine Health and Safety Council for the period of 24 months 2018-12-14 11:00 MHSC014/ 2018- 19
Appointment of a service provider for office cleaning services, supply and install hygiene equipments and consumables for the period of 36 months 2018-12-14 11:00 MHSC011/ 2018- 19
The objective of this bid is to appoint and contract accredited Training Providers who have valid approved programme to deliver W&R Informal Small Business Practice NQF Level 3 qualification. The contracted Training Providers will each receive an allocation of the approved 500 unemployed learners who reside within identified rural areas of South Africa. 2018-12-07 11:00 RDO/ 2018/ 0013
Appointment of a service provider to host and provide support for milestone portal for the period of 24 months. 2018-12-14 11:00 MHSC012/ 2018- 19
Appointment of a panel of attorneys for the Mine Health and Safety Council for the period of 36 months. 2018-12-14 11:00 MHSC013/ 2018- 19
Appointment of a service provider to render translation services to the MHSC for a period of 36 months 2018-12-14 11:00 MHSC010/ 2018- 19
Appointment of a service provider to provide a fibre internet link connectivity 2 x 50 MB 1:1 contention ratio with two different pops for seamless redundancy for a period of 24 months. 2018-12-14 11:00 MHSC009/ 2018- 19
Appointment of a service provider for the supply of 32 laptops for the Mine Health and Safety Council for the period of 6 months 2018-12-14 11:00 MHSC015/ 2018- 19
Provision of Medical Aid Brokerage Services for a period of (3) three years 2019-01-07 11:00 54/ 2018
The background of this project is to up skill 220 18.2. (Unemployed) Members from 20 Cooperatives nationally on several W&RSETA Skills Programmes 2018-12-07 11:00 RDO/ 2018/ 0014
The aim of the project is to train 100 NGOs/ NPOs that reside within the W&R sector on any skills development initiatives in order to enable them to operate more effectively and efficiently in their respective areas of work. 2018-12-07 11:00 RDO/ 2018/ 0012
Suitable Service Providers Are Hereby Invited to Bid for the Appointment of the Service Provider to Render Services of Incubation Project Manager for the Incubation Programme for the period of 36 months 2018-12-07 11:00 KZNFC- T38/ 2018/ 19
The objective of this bid is to enter into a contract with a Travel Management Company to manage all travel, accommodation, car hire and conferencing services. 2018-12-07 11:00 SCM/ 2018/ 0011
Appointment of a Service Provider to Develop Learning Materials and Assessment Tools for Occupational Qualifications 2018-12-10 11:00 ETQA/ 2018/ 09
The objective of this bid is to appoint a service provider to assist the W&RSETA with courier services for a period until 31 March 2020. 2018-12-07 11:00 SCM/ 2018/ 0012
The objective of this bid is to procure offices for the W&RSETA six (6) Regional Offices. 2018-12-07 11:00 SCM/ 2018/ 0013
Travel and Accommodation Services at Government Pensions Administration Agency. 2018-12-12 11:00 GPAA 13/ 2018
Provide Legal Services for the Government Pensions Administration Agency 2018-12-10 11:00 GPAA 12/ 2018
Website Design & Hosting Intranet 2018-12-14 11:00 WCNCB 01/ 11/ 2018
Appointment of a service provider to develop and test the performance of the business continuity management system for the SHRA in accordance with ISO 22301 standards 2018-12-07 11:00 SHRA/ RFB/ ADMIN/ 10/ 201819

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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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