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.
Training of 50 beneficiaries in Welding Skills Programme: non-accredited 2018-09-28 11:00 T/ 30/ 18 Skill Weld
Training of 50 beneficiaries in Further Education + Training certificate, Automotive Repair and Maintenance NQF LEVEL 4; SAQA ID 78525 2018-09-28 11:00 T/ 20/ 18 Learn AMR
Training of 50 beneficiaries in Vehicle Maintenance & Repair Assistant Skills Programme NQF L2 2018-09-28 11:00 T/ 27/ 18 Skill VMRA
Training of 50 beneficiaries in Further Education + Training certificate: Information Technology Technical Support NQF L4; SAQA ID 78964 2018-09-28 11:00 T/ 19/ 18 Learn TS
The appointment of a consultant to undertake specialist studies to inform the developable area for the proposed subdivision on ER84603, Retreat, Cape Town. 2018-09-20 11:00 SSC WC Q12 (2018 / 2019) DRDLR
Training of 50 beneficiaries in National Certificate, Information Technology, End User Computing, NQF Level 3; SAQA ID 49077 2018-09-28 11:00 T/ 21/ 18 Learn EUC
Training of 50 beneficiaries in Further Education + Training certificate: Information Technology Systems Development NQF L4; SAQA ID 78965 2018-09-28 11:00 T/ 18/ 18 Learn SD
Training of 50 beneficiaries in National Certificate, Animal Production, NQF Level 4, SAQA ID 48979 2018-09-28 11:00 T/ 24/ 18 Learn Animal
Internal Audit services 2018-09-28 11:00 T/ 14/ 18 IA
Appointment of the Service Provider to Undertake an Assessment of the Socio-Economic Impacts of the Implementation of the Waste Classification and Management Regulations and the Associated Waste Norms and Standards. 2018-09-21 11:00 Q- 119- 18- 19
Appointment of Auditors to Do Value for Money (VFM) and Performance Audits for Selected Projects within the Department’s Expanded Public Works Programmes 2018-09-21 11:00 Q- 113- 18- 19
Appointment of a Service Provider to Undertake the Hazard Identification and Risk Assessments (HIRA) and the Review of Existing as well as Development of Appropriate Risk - Responsive Control Measures at the Branch: Oceans & Coasts 2018-09-21 11:00 E 1468
Appointment of service for the manufacturing and delivery of 1000LT complete fire truck units for firefighting in the Eastern Cape Province for the Department of Agriculture Forestry and fisheries at regional office King Williams Town. 2018-09-21 11:00 4.4.12.4/ 17/ 18
Cleaning services for inner city hostels in Johannesburg for a period not exceeding 36 months (Denver, George Goch, Jeppe, LTA, MBA and Murray and Roberts). 2018-09-21 11:00 HLA 4/ 2/ 4- 2018/ 04
Appointment of a security contractor to render security services at Modimolle, Polokwane and Makhado for the Department of Agriculture, Forestry and Fisheries for a period of three (3) years. 2018-09-21 11:00 4.4.12.4/ 10/ 18
Provision and service of chemical toilets. 2018-09-25 11:00 HLA 4/ 2/ 4- 2018/ 05
The appointment of a security company to render security services in the Mpumalanga province at mbombela to the department of agriculture, forestry and fisheries for a period of three (3) years. 2018-09-21 11:00 4.4.12.4/ 11/ 18
The Western Cape Department of Agriculture (WCDoA) requires the service of a radio presenter. 2018-09-24 11:00 BID 848 - 2018/ 2019
Printing and binding of maternity case records for the Eastern Cape Department of Health Institutions for a period of 12 months . 2018-09-21 11:00 SCMU3- 18/ 19- 0135- HO
Request for Proposals to develop remuneration policy and philosophy for Council for Medical Schemes 2018-09-25 11:00 CMS022018/ 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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