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.
The appointment of service provider to develop: A manual with Integrated Planning Guidelines for the development of sustainable Government Precincts. Compliance to the following Pre-qualification criteria for preferential procurement: A Tenderer having stipulated minimum B-BBEE status level of contributor: Level 1 or Level. 2018-09-25 11:00 H18/ 018AI
Kimberley Dept of Rural Development and Land Reform: Office accommodation: 1303.41m² and 37 parking bays for a period of 5 years. 2018-09-26 11:00 LS08/ 2018
Appointment of a service provider at the Independent Communications Authority of South Africa to assist the Authority to conduct Market Inquiry in the Electronic Communications Sector for a period of twenty four (24) months on an 80/20 PPPFA 2000, Preferential Procurement Regulation: 2017. 2018-09-25 11:00 ICASA 02/ 2018
New or construction of office accommodation: SAPS Tlhabane 1 640,23 m² with 10 covered parking bays in the CBD area of Rustenbrg for period of 60 months 2018-09-26 11:00 MMB 2019/ 008 LS
ORBIT TVET College invites capable and competent service providers to supply and deliver of New Computers for the College 2018-09-28 11:00 C02/ 2018
Department of Public Works: Ethekwini Regional Office-Mayville: Conversion and upgrade of existing workshop into a dining hall 2018-09-25 11:00 ZNTD 04200W
Appointment of a Legal Firm of Conveyancers to do the Transfer of Immovable Properties form Department of Settlements (The Then Department of Housing)to the name of KZN Provincial Government 2018-09-21 11:00 ZNT02/ 18/ 19
Service Provider to develop a Green Procurement Implementation Programme for the Construction of State Subsidised Human Settlements in the Western Cape 2018-09-28 11:00 HS 03/ 2018/ 2019
The BANKSETA seek to appoint a service provider to develop occupationally based qualifications to replace legacy qualifications as per the Quality Council for Trades and Occupations (QCTO) communication that was published on the 17 December 2017. 2018-09-25 11:00 BS/ 2018/ RFB408
Rendering of a comprehensive cleaning service at Paarl Hospital for a three (3) year period. 2018-09-21 11:00 WCGHSC0173/ 2018
Rendering of a Cleaning Services for Health Centre Bloemfontein (Poli Clinic, Air Force Base Sick Bay and DOD MOB Center) for a Period of Two (02) Years. 2018-09-26 11:00 CPSC- B- PC- 026- 2018
Stellenbosch: Elsenburg: Vaaldraai: Electrical upgrade to eighty two (82) houses 2018-09-25 11:00 S083/ 18
Betterment and Re-graveling of D93. 2018-09-21 11:00 C253/ 1819/ BR/ 783
Betterment and Re-graveling of L2869. 2018-09-21 11:00 C253/ 1819/ BR/ 785
Provide ICT support services. 2018-09-25 12:00 09/2018
Supply & delivery of bullet proof vests. 2018-09-25 12:00 136/2018
Supply & delivery of vehicles to Kouga Municipality. 2018-09-25 12:00 137/2018
Expression of interest for general building (masonry work). 2018-09-27 11:00 SCM/19-7./C
Expression of interest for dry-walls. 2018-09-27 11:00 SCM/19-38/C
Expression of interest for carpeting. 2018-09-27 11:00 SCM/19-33/C

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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:

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