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 Professional Service Provider In Consortium/ Multi-Disciplinary Consisting of : Project Management Services, Civil And Structural Engineering Services, Quantity Surveying Services, Architectural Services, Mechanical and Electrical Engineering Services, Town and Regional Planning Services, Land Surveying Services, Agricultural Engineering Services, Environmental Practitioner Services, Construction Health And Safety Services and Geohydrology Services For The Project: The Establishment of Technical Support Unit For The Rural Infrastructure Development Directorate: Limpopo Provincial Shared Service Centre Of The Department Of Rural Development And Land Reform To Provide Project Management, Planning, Feasibility And Detail Design; And Cost Estimation For Build Environment Professional Services And Advisory Services For A Period Of Two (2) Years. 2018-12-07 11:00 5/ 2/ 2/ 1- CRDP- 0003 (2018/ 2019)
Department of Education: eThekwini Region: Amatshezulu High School: Hammarsdale: Water and Sanitation Programme Phase 3 2018-12-18 11:00 ZNTD 03835W
Department of Education: eThekwini Region: Mankayiyana Primary School: KwaDukuza: Water and Sanitation Programme Phase 3 2018-12-18 11:00 ZNTD 03869W
Department of Education: eThekwini Region: Magojolo Primary School: Maphumulo: Water and Sanitation Programme Phase 3 2018-12-18 11:00 ZNTD 03870W
Department of Education: eThekwini Region: Emolweni Primary School: Emolweni: Water and Sanitation Programme Phase 3 2018-12-18 11:00 ZNTD 04055W
Department of Home Affairs:Pinetown Local Office:Procurement of Office Accommodation and Parking: Office space required of 962.76m² and 11 secured parking bays on site. 2018-12-13 11:00 DBN18/ 11/ 01
Supply and Delivery of Protective Clothing for Cleaning and Gardening Service 2018-12-08 11:00 NST18/ 037
Kimberley: Gardening services for three years at the Department of Roads and Public Works Distric Office (Padkamp Offices) 2018-12-14 11:00 DRPW 031/ 2018
Kimberley: Gardening services for three years at the Department of Roads and Public Works,Tebogo Leon Tume Complex and Prestige Accommodation 2018-12-14 11:00 DRPW 032/ 2018
Kimberley: Gardening services for three years at the Department of Roads and Public Works,Frances Baard Distric Workshop 2018-12-14 11:00 DRPW 033/ 2018
Limpopo Province: Tzaneen: Procurement of alternative office accommodation (existing building or building to be constructed) at a total guideline gross area of 313.43 sqm and lettable area of 284.94 sqm on behalf of the Department of Correctional Services for a period of 03 years 2018-12-11 11:00 PLK18/ 45
Limpopo Province: Musina: Procurement of alternative office accommodation (existing building or building to be constructed) at a total guideline gross area of 350.02 sqm and lettable area of 315.02 sqm with 08 shaded parking bays on behalf of the South African Police Services for a period of 3 years. 2018-12-11 11:00 PLK18/ 44
Limpopo Province: Burgesfort: Procurement of office accommodation (existing building or building to be constructed) at a total guideline gross area of 465 sqm and lettable area of 422.73 sqm with 05 parking bays on behalf of Department of Labour for a period of 05 years. 2018-12-11 11:00 PLK18/ 46
Limpopo Province: Thohoyandou : Procurement of office accommodation (existing building or building to be constructed) at a total guideline gross area of 941.50 sqm and lettable area of 855.91 sqm with 50 parking bays on behalf of the Department of Correctional Services for a period of 03 years. 2018-12-11 11:00 PLK18/ 50
Limpopo Province: Polokwane: Procurement of office accommodation (existing building or building to be constructed) at a total guideline gross area of 637.25 sqm and lettable area of 579.32 sqm with 21 parking bays and a generator on behalf of the Department of Higher Education and Training for a period of 05 years. 2018-12-11 11:00 PLK18/ 48
Limpopo Province: Polokwane : Procurement of office accommodation (existing building or building to be constructed) at a total guideline gross area of 572 sqm and lettable area of 520 sqm with 23 parking bays on behalf of Government Pension Administration Agency for a period of 03 years. 2018-12-11 11:00 PLK18/ 47
Limpopo Province: Thohoyandou (Vhembe Regional Share Service Centre) : Procurement of office accommodation (existing building or building to be constructed) at a total guideline gross area of 1680.60 sqm and lettable area of 1231.53 sqm with 43 parking bays and a generator on behalf of the Department of Rural Development and Land Reform for a period of 05 years 2018-12-11 11:00 PLK18/ 49
Gamalakhe: Department of Health: Gamalakhe Community Health Centre: Hire of Residential Accommodation (Flat/House) 10 x bedrooms 2018-11-20 11:00 ZNT 2847W
Clean Ducts and Filters and Do a Particle Count In Theatres X 02 2018-11-23 11:00 ZNQ 918 / 18- 19
Servicing of Air conditioners(Split Units) 2018-11-28 11:00 ZNQ 87 / 18- 19

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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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