Issue Date: 
Monday, May 16, 2016

Functionality in Tenders Part 1

The Preferential Procurement Policy Framework Act 2011, establishes the rules according to how Government Entities must evaluate tenders. The Preferential Procurement Regulations of 2011 takes it a step further and gives guidance on how to specifically award points according to certain criteria such as B-BBEE and Price.

Government Entities have developed a system called “Functionality” or “Technical Criteria” to enhance the system and to ensure that the companies with the best ability are evaluated according to the Regulations. This is a safety measure built into the system to keep the companies with limited ability but with the lowest price from winning a tender. Private Sector Entities have also adopted the same system, although slightly modified. For a better understanding, we will name Government Entities and Private Sector Entities together as Procuring Entities.

It is fair that a Request for Quotation or Competitive Bid (Tender) is awarded to the company with the best ability.

Otherwise no contract awarded will be executed correctly, according to specifications and delivered on time.

An Company’s ability to execute a Request for Quotation or Competitive Bid is measured through its ability to perform and deliver. This ability is measured in many different ways but most of the common areas are:

  • Experience;
  • Human Resources;
  • Financial Resources; and
  • Goods or Services delivery capability

The first three are easy to understanding and easy to approve. It is the fourth item, Goods or Services delivery capacity, which many companies struggle with. Procuring Entities must ensure that when procuring goods and/or services from an company that it will be done:

  • Timeously;
  • Correctly as per specifications; and
  • Continuously.

This can only be proved if a company has the necessary infrastructure to deliver the goods and/or services required.

We strongly believe that going forward Procuring Entities will be strict in ensuring that contracted companies have the ability to deliver.

The above mentioned criteria will be discussed in detail during the next few of articles to follow.

To receive proper training in the business of responding to quotations and competitive bids you should attend the How-to-Tender workshop (

Earn to learn!

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... Read More

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