Issue Date: 
Monday, January 25, 2016

Draft Procurement Regulations 2015

The Government thought it a good idea to have a look at the Preferential Procurement Regulations of 2011 and to change these Regulations to better fit the South African Tender Environment.

These Regulations were quietly issued end of 2015 for public comment.

As the case with most new Regulations or Acts there is always good and bad that accompanies it.

Some of the good things addressed in these draft regulations are:

  • Better transparency when it comes to the measuring of functionality. These proposed regulations will help companies responding to tenders to have a better understanding of how many points each subsection of functionality will count.
  • Fair and reasonable pricing. This means that an Organ of State must conduct price analysis in order to determine what fair and reasonable pricing is. Further good news is that each price analysis conducted by Organs of State must be documented in writing and must form part of the evaluation pack of each tender.
  • Incorporation of procedures already used. These include negotiating with companies pre-awarding the tender to clarify unclear issues and streamlining the functionality process to what is already the norm in measuring functionality.

The bad thing is the proposed change in the preference points system. People familiar with the tender process will know that your tender response is eventually evaluated either on the 80/20 or the 90/10 preference points system, depending on the size of the tender. Currently the 80/20 principal is used for tenders less than one million Rand and the 90/10 principal is used for tenders with a value above one million Rand. The new thresholds proposed in the draft regulations are:

  • 50/50 preferential points system for tenders less than R10 million;
  • 80/20 preferential point system for tenders between R10 million and R50 million;
  • 90/10 preferential point system for tenders above R50 million.

There are a few uncertainties on how exactly the 50/50 preferential point system will work and if it includes white females and white persons with disabilities.

Hopefully all stakeholders will comment on the recommended Draft Regulations.

We will follow the progress of passing the Draft Regulations. As soon there is more news we will communicate it so that everybody knows what is coming.

Learn to earn

www.how2tender.com

When Must I Sub-Contract?

There seems to be a lot of confusion amongst entrepreneurs when it comes to tenders and sub-contracting. The Draft Preferential Procurement Regulations, have been gazetted and are currently up for review. However, these Regulations are the major cause for the confusion. Many entrepreneurs ask whether they should sub-contract or not whilst responding to a tender.

The Draft Preferential Procurement Regulations stipulates the following: 

  1. For contracts above R30 million, the tenderer MUST sub-contract a minimum of 30% of the value of the... Read More
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