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 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
Terms of Reference for the appointment of an accredited service provider for the implementation of Learnerships and Skills Programme for the ETDP SETA 2018-12-10 11:00 SCMU: 23 - 2018/ 19
Terms of Reference for training providers to offer the ETDP SETA Skiils Programme Teaching with Technology 2018-12-11 11:00 SCMU: 21 - 2018/ 19
Terms of Reference for the appointment of an accredited service provider for the implementation of Learnerships and Skills Programme for the ETDP SETA 2018-12-10 11:00 SCMU: 18 - 2018/ 19
Request to renew the following corporate subscription services BMI, CEB (IT), EBSCO, LEXISNEXIS, SAFARI, SABINET, CEB (SCM), CIS, IFR,SABS, ISF, TOGAF, CWTL and IODSA. 2018-12-07 11:00 RFB 1809/ 2018
Terms of Reference to provide customised training to 200 community college practitioners 2018-12-11 11:00 SCMU: 20 - 2018/ 19
Terms of Reference for the development of learning materials. 2018-12-11 11:00 SCMU: 19 - 2018/ 19
Appointment of service provider for a fully managed Picture Archiving Communications Systems (PACS) including the installation, configuration, enhancement, support and maintenance for the Gauteng Department of Health (GDOH) for a period of five (5) years. 2018-12-07 11:00 RFB 1840- 2018
Terms of Reference for the procurement of office furniture for ETDP SETA Head Office and Provincial Offices 2018-12-12 11:00 SCMU: 24 - 2018/ 19
Terms of Reference to appoint a panel of legal service providers 2018-12-11 11:00 SCMU: 22 - 2018/ 19
Appointment of a service provider for the provision of the SITA Micro Organisation Placement & Migration Management Services required to migrate employees to the new micro structure. 2018-12-10 11:00 RFB 1839/ 2018
Provision of Crisis Communication Management Services to Dube TradePort Corporation for a period of three (3) years 2018-12-10 11:00 DTP/ RFP/ 23/ MKT/ 08/ 2018
Appointment of a Service Provider to Assist the Department of Transport to Update the National Freight Databank. 2018-12-07 11:00 DOT/ 12/ 2018/ ITP
Appointment of a Service Provider for the Development of the Road Freight Strategy Integrated Implemetation Plan 2018-12-07 11:00 DOT/ 14/ 2018/ ITP
Appointment of a Service Provider to Conduct a Risk Management Audit From Date Of Award Until 31 March 2019. 2018-11-30 11:00 FMA 0004- 2018/ 19
Appointment of a Service Provider to Identify and Map All Fallow and Active Lands in South Africa within a Period of 5 Months. 2018-11-29 11:00 5/ 2/ 2/ 1- RDLR 0046(2018/ 2019)
Appointment of a Service Provider to Provide Operational and Compliance Audit Projects at the Department of Rural Development and Land Reform, for Two Audit Projects as per the 2018/2019 Annual Internal Audit Plan 2018-12-06 11:00 5/ 2/ 2/ 1- RDLR 0047(2018/ 2019)
Appointment of a Service Provider to Perform an External Quality Assessment Review for the Department of Rural Development and Land Reform, Chief Directorate: Internal Audit for the Period of 15 Days. 2018-11-29 11:00 5/ 2/ 2/ 1- RDLR 0050 2018/ 2019)
Appointment of a Service Provider to Manage the Land Rights Management Facility Established to Provide Legal and Mediation Services to Labour Tenants, Farm Dwellers, Communal Property Institutions, Restitution Claimants and Other Land Reform Beneficiaries in Nine Provinces for the period of three years 2018-11-29 11:00 5/ 2/ 2/ 1- RDLR 0051 (2018/ 2019)
Appointment of a Professional Service Provider In Consortium/ Multi-Disciplinary Consisting of :Architectural Services, Civil and Structural Engineering Services, Mechanical and Electrical Engineering Services and Quantity Surveying Services to Provide Project Management, Design and Construction Supervision for The Construction of Ga-Kgatla (Papola) Feedmill Situated In Blouberg Local Municipality Within The Capricorn District Municipality In Limpopo Province 2018-11-29 11:00 5/ 2/ 2/ 1- CRDP- 0004 (2018/ 2019)

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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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