Issue Date: 
Monday, June 6, 2016

General Procurement Guidelines

Government issued the General Procurement Guidelines not only as a prescription for standards of behaviour, ethics and accountability, which it requires of its public service, but also as a statement of their commitment to a procurement system enabling the emergence of sustainable small, medium and micro businesses. These SME's will add to the common wealth of the country and its objective of enhanced economic and social well-being for all its people.

Proper and successful government procurement rests upon certain core principles of behaviour - called the Five Pillars of Procurement. They are best described as pillars because if any one of them is broken the procurement system falls down. These Five Pillars are:

1. Money
This is an essential test against which a department must justify a procurement outcome. Price alone is often not a reliable indicator and departments will not necessarily obtain the best value for money by accepting the lowest price offer that has met mandatory requirements. Best 'value for money' means the 'best available outcome' when all relevant costs and benefits over the procurement cycle are considered.

2. Open and Effective Competition
This requires a framework of procurement laws, policies, practices and procedures that is transparent, i.e. it must be readily accessible to all parties;

3. Ethics and Fair Dealing
In procurement, if all parties comply with ethical standards they can deal with each other on a basis of mutual trust and respect; and conduct their business in a fair and reasonable manner and with integrity.

4. Accountability and Reporting
This involves ensuring that individuals and organisations are answerable for their plans, actions and outcomes. Openness and transparency in administration, by external scrutiny through public reporting, is an essential element of accountability.

5. Equity
This last pillar is vital to public procurement sector in South Africa. It ensures that government is committed to economic growth by implementing measures to support industry generally, and especially to advance the development of Small, Medium and Micro Enterprises and Historically Disadvantaged Individuals.

The General Procurement Guidelines address these Five Pillars and prescribe a minimum set of standards that are to be observed.

If you want to learn more about these five pillars and the tender process in general ensure that you attend a "How-to-Tender" workshop presented Country wide. Visit www.how2tender.com to find out more.

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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