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.
Provision of Office Accommodation: Pretoria Local Office for a leased period of 5 years. 2018-10-26 01:00 52/ 2018
Erect retaining wall to separate classrooms, plaster and painting at Sizaminqubeko Combined School, Umhlabuyalingana. 2018-10-19 11:00 ZNQ UM 27M/ 17- 18
Procurement of a service for the establishment of the Project Management Office (PMO) for the Kopanong Precinct Project (KPP) for a period of 7 (seven) years 2018-10-16 11:00 RFP 10/ 09/ 2018
Repair to roof, doors, windows, floors and painting in 6 classrooms including kitchen and storage at Velabasha Primary School, Manguzi. 2018-10-19 10:00 ZNQ UM 24M/ 17- 18
Provision of Property Management Services for the Gauteng Department of Infrastructure Department Development for the period of three (3) years. 2018-10-16 11:00 RFP 11/ 09/ 2018
Repairs to 5 classrooms, roof, floor, windows, doors, door frames, veranda, floors and painting at Majindi Primary School, Hlabisa. 2018-10-19 11:00 ZNQ UM 2871 U
Repair 5 classrooms, roof, floor, windows, doors, door frames, veranda and painting at Manzengwenya Primary School, Umhlabuyalingana. 2018-10-19 11:00 ZNQ UM 71M/ 17- 18
KwaZulu-Natal: Department of Health: EThekwini Region: Durban: St. Aidan’s Hospital: Replacement of collapsing boundary Wall. 2018-10-23 11:00 ZNTD 03682W
Repairs to 5 classrooms, roof, doors, door frames, windows, floors and painting at Ntshingwayo Secondary School, Umhlabuyalingana. 2018-10-19 11:00 ZNQ UM 2843 U
Repair 5 classrooms roof, doors, door frames, windows, floor, veranda and painting at Mashalaza High School, Umhlabuyalingana. 2018-10-19 11:00 ZNQ UM 16M/ 17- 18
KwaZulu-Natal: Department of Public Works: eThekwini Regional Office: Mayville Offices–South Wing: Upgrade of Air Conditioning System 2018-10-26 11:00 ZNTD 03279W
Construction of 40KL elevated water tank at Mduku clinic- Hlabisa. 2018-10-19 11:00 ZNTU 03407 W
DUTYWA MAGISTRATE: Replacement of damaged wall. 2018-10-12 11:00 MTH 58/ 2018
KwaZulu-Natal: Department of Public Works: eThekwini Region: Durban: Installation of 800KVA standby generator for the Mayville Complex and Relocation of the existing 400KVA to iLembe District Office. 2018-10-29 11:00 ZNTD 04430W
14 SAI BATALLION: Office & Staff Quarters - Repairs to Storm Damage. 2018-10-12 11:00 MTH 56/ 2018
14 SAI BATTALION: Garrison Village - Repairs to Storm Damage Required CIDB grading: 3 GB or Higher. 2018-10-12 11:00 MTH 57/ 2018
Construction, Furnishing and Delivery of the New Boitumelo Clinic. 2018-10-18 11:00 DID40/ 09/ 2018
The South African National Roads Agency SOC Limited (SANRAL) invites tenders from qualified Bidder/s to enter into an agreement for DATABASE Administration and Managed Services (Oracle, Microsoft Mssql and Mongodb). 2018-10-16 14:00 NRA 58000/ 2018/ ORAMSSQL
Appointment of a service provider to render 24 hour security services for the KZN Department of Human Settlements at Ugu District Offices, for a period of 12 months. 2018-10-18 11:00 ZNB44/ 2018/ 19HSE
Appointment of a panel of service providers to undertake plumbing work for the KZN Department of Human Settlements on a rotational basis for a period of 2 years. 2018-10-23 11:00 ZNB20/ 2017/ 18HSE

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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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