Issue Date: 
Tuesday, February 7, 2017

Brand new Preferential Procurement Regulations 2017 for Tenders

The brand new Preferential Procurement Regulations 2017, has been finalized and was gazetted on 20 January 2017. There are some interesting changes and challenges that we will discuss during the coming months. This is 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 provide for a mechanism 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 an outcome 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, commitment made by government was 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, co-operatives as well as township and rural enterprises. Also, giving impetus to the NGP the highlights of the revision are: -

  • Introducing the prequalification criteria which allow the advancement of these selected categories of people by limiting competition 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, the high value tender in the region of R30 million and above tend to be awarded to established companies due to economies of scale and affordability, leaving out categories of aspiring businesses, the revised regulations requires all those with 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 give the smaller companies greater chances to compete in the economy in a meaningful way. (Refer to 6 & 7)

Commenting on the release of the regulations, Minister Pravin Gordhan says 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 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.

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Title Closing Date Tender No.
Operation and Maintenance of Thohoyandou Landfill Site(3 Year Contract) 2017-10-23 11:00 27/2017/2018
Supply and delivery of Water and Waste Water Material 2017-10-23 11:00 INF-W24/2017/2018
Short Term Provision of Harbour Pilot Services Using a Leased Helicopter on an “as and when required” Basis for the Ports of Richards Bay & Durban 2017-10-24 10:00 RB2017/47
Provision of Laundry and Related Services at Nelson Mandela Central Hospital and Mthatha Regional Hospital, Eastern Cape for a period of 18 months 2017-10-24 11:00 SCMU3-16/17-0159-HO
Limpopo and Thohoyandou Security Services 2017-10-24 12:00 RFP/RIS/2017/34
Manufacture and supply of estimated quantities of distribution class surge arresters on an “as and when” required basis for distribution division. 2017-10-26 10:00 CORP4142
Construction of Saul Mkhizeville Bus and Taxi Route 2017-10-26 12:00 MKHO008/2017/18
Provision of Physical Security Services at SABC Mpumalanga for a period of three years 2017-10-26 12:00 RFP/RIS/2017/33
Pool of Contractors for Civil, Buildings, Works/Services in Graeter Tzaneen Municipality 2017-10-27 12:00 SCMU 15/2017
Construction of the Rustplaas 1ml/Day Wastewater Treatment Works 2017-11-01 12:00 MKHO14/2017/18
Construction of the Rustplaas Sewer Reticulation Network 2017-11-01 12:00 MKHO15/2017/18
Sale of Residential Erf. 3702 in Oak Street Railton, Swellendam 2017-11-03 12:00 SMT10/17/18
Professional Service Provider for Annual Report Layout, Design, Printing, Binding, Packaging and delivery 2017-10-26 12:00 2018/022
Repair and maintenance of bridges and culverts for the department of public works, roads and transport as and when required in the Bohlabelo, Ehlanzeni, Nkangala and Gert Sibande districts of the Mpumalanga Province for a period of three (3) years (6CE or higher and 5CEPE is also allowed) 2017-10-27 12:00 PWRT/2326/17/MP
Construction of the Rustplaas Sewer Reticulation Network 2017-11-01 12:00 MKHO15/2017/18
Construction of the Rustplaas 1ml/day wastewater treatment works 2017-11-01 12:00 MKHO14/2017/18
Supply 32000 pouches of swabs gauze absorb sterile 100MM X 10MM 8ply (5 swabs per pouch) 2017-10-20 11:00 ZNQ 161/ 2017
A three year term Contract for Mechanical and Electrical Major Plant and Machinery Installation, Maintenance, Repair, Refurbishment and Upgrade for Norther, Central Eastern and Southern Operations (Limpopo, Mpumalanga, North West, Gauteng, Free State, Northern Cape, Kwazulu Natal & Western Cape) 2017-10-23 11:00 DWS02- 0817 WTE
Corporate Conference and Travel Management Services 2017-10-23 11:00 IEC/ GP- 03/ 2017
Corporate Conference and Travel Management Services 2017-11-15 11:00 IEC/ EC- 12/ 2017

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Functionality and Tenders

In all competitive bids (tenders) you as the bidder will have to respond to Functionality. You will need to score a set minimum number of points, measured as a percentage, on Functionality of a competitive bid (tender) in order to advance to the next phase of evaluation in the tender process.

Usually Organs of State evaluate competitive bids (tenders) as follows:

  • The tender response is evaluated on Functionality where the bidder must score points out of a maximum of 100 points.
  • A threshold of between 65 to 75 out of 100 points... Read More
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