Issue Date: 
Tuesday, July 12, 2016

Pre-Qualification Criteria When Awarding Tenders

On June 14 2016, the Draft Procurement Regulations 2016 were released for public comment. One of the new Regulations that will certainly have an effect on the awarding of tenders is the “Pre-qualification criteria” that is stated in paragraph 10 which states the following criteria:

a.     The tenderer must have a stipulated minimum B-BBEE status level of contribution;

b.     The tenderer must sub-contract at a minimum of 30 per cent of the value of the contract to one or more:

  1. Black female owned Exempt Micro Enterprises or Qualifying Small Enterprises;
  2. Black youth (aged between 14 and 35 years) owned Exempt Micro Enterprises or Qualifying Small Enterprises;
  3. Black owned Exempt Micro Enterprises or Qualifying Small Enterprises;
  4. Black people with disabilities who own Exempt Micro Enterprises or Qualifying Small Enterprises.

c.     A tender that fails to meet the pre-qualification criteria will not be accepted.

It is clear that the Draft Procurement Regulations 2016 is focused on increasing the tender opportunities for Black Owned Businesses, especially Small Black Owned Businesses with a turnover of less than R50 million per year.

Objective Criteria

The current regulations are silent on the use of objective criteria as envisaged in section 2(1)(f) of the Act. The draft Regulations introduced objective criteria to be taken into account after price and preference have been evaluated. The organs of state who intend using the objective criteria when evaluating tenders will be required to indicate in the tender advert that the tender will be subject to further evaluation in terms of objective criteria over and above the 80/20 or 90/10 preference point system.

Watch this space for updated information as soon as it becomes available.

The “How-to-Tender” workshops which are presented country-wide where you can learn all about this and much more. 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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