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.

Learn to earn

Title Closing Date Tender No.
Supply & Delivery of Points Rodding & Equipment 2018-01-23 10:00 DBN/CAP (RTPC) 743
Supply, delivery, installation and commissioning of a steam boiler in the water Simulation Pilot Plant at Eskom Research, Testing & Development (RT&D) 2018-01-17 10:00 CORP 4300
Supply chain management asset improvement plan (phase 2): upgrading of building 2 offices and main entrance, construction of warehouse. 2018-01-17 10:00 213/2016
Supply of Various Testing Equipment and Machinery for Transnet Engineering Durban 2018-01-23 10:00 TE 17 DBN 6GC 10355
Supply and delivery of Various Components for the RSE 45d Class Bogie for a period of three (3) years "as and when" required 2018-01-23 10:00 TE17-DBN-6GC-10816
Appointment of one service provider to supply,deliver specialised personal protective clothing for Polokwane Municipality for a period of three (3) years (Re-advert) 2018-01-17 10:30 98/2016
Panel of contractors: Upgrade and renewal of water pipelines (CIDB 4CE or higher) 2018-01-19 10:30 JW 13781
Repairs to shaft encoders - as & when required 2018-01-22 09:00 DBN/OPS (RTPC) 746
Supply & Maintenance of a Self-Propelled on-Track Wagon with Crane 2018-01-23 12:00 DBN/CAP (RTPC) 737
Maintenance of Track with On-Track Drain Cleaning Machine 2018-01-23 14:00 DBN/CAP (RTPC) 736
Procure ballast & led lights - as & when required 2018-01-22 10:00 DBN/OPS (RTPC) 734
Cleaning of Culverts & Drains In Various Areas - as & when required 2018-01-23 14:00 DBN/OPS (RTPC) 757
Repairs to various cables - as & when required 2018-01-22 11:00 DBN/OPS (RTPC) 747
Maintenance, Support & Development Services for Regional Systems - as & when required 2018-01-24 09:00 DBN/OPS (RTPC) 738
Supply & Deliver Workshop Tools 2018-01-24 10:00 DBN/CAP (RTPC) 751
Maintenance & repair of printers, ticket machines, PTIMS machines, pc's, laptops, network points & IP phones - as & when required 2018-01-22 12:00 DBN/OPS (RTPC) 754
Repairs to Various Valves - as & when required 2018-01-24 11:00 DBN/OPS (RTPC) 748
Supply & delivery of points rodding & equipment 2018-01-23 10:00 DBN/CAP (RTPC) 743
Supply & Delivery of Perway General Tools 2018-01-24 12:00 DBN/CAP (RTPC) 739
Supply of various testing equipment and machinery for Transnet Engineering Durban 2018-01-23 10:00 TE 17 DBN 6GC 10355


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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