Tenders, B-BBEE and the new Preferential Procurement Regulations 2017

We have previously asked: How important is a good B-BBEE status level of contributor in the tender process?

The answer is still the same: VERY IMPORTANT!

In all tender documents, you will find the NEW Standard Bidding Document 6.2 which is used to claim your Preference Points for B-BBEE. The higher your B-BBEE status level of contributor, the more points you will score on the Preference Points System. Ultimately the bidder or bidders scoring the highest points will be awarded the tender.

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.

Draft Procurement Regulations Media Release

 The Draft Procurement Regulations 2016 were released on 14 June 2016. If these regulations are going to be implemented it will change the Tender environment in South Africa. Below is the media release from the Office of the Chief Procurement Officer, explaining the major changes in the Regulations:

“The Office of the Chief Procurement Officer (OCPO) has published the proposed new Preferential Procurement Regulations*, to afford the public an opportunity to comment.

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.

Tenders in South Africa are measured on three principles, namely Functionality, Price and Broad-Based Black Economic Empowerment (B-BBEE). An Enterprise's ability to execute a contract is measured through the Functionality Principal in the Tender Environment. If an Enterprise's tender response does not pass the Functionality test it can't be measured on Price and B-BBEE. Enterprises that respond to tenders must ensure that they will pass the Functionality test in order to advance.

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.

There appears to be a serious lack of knowledge regarding South African tender procedures. Here, the tender processes are ruled by various Acts, Regulation and Guidelines which are specifically designed to ensure that the tender processes are in line with the Constitution of South Africa - which dictates that the tender process should be fair, equitable, transparent, competitive and cost-effective.

It is important to know that when you respond to a tender there are certain guidelines that Government Officials need to follow in order to evaluate your tender. According to the Implementation Guide*, Accounting Officers and Accounting Authorities of all public entities** and municipal entities must comply with the rules and guidelines stipulated below.

If one looks at the General Procurement Guidelines that National Treasury issued to Government Departments, it is clear that Government wants the tender process to be fair, equitable, transparent, competitive and cost-effective exactly as Section 217 of the Constitution of South Africa requires.

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:

Pages

Title Closing Date Tender No.
Supply Wound dressing (100% soduim carboxymethylcellulose NACMC fibrous hydrocolloid dressing containing ionic silver with nylon stitching 17 x 15cm) - 3000 boxes 2018-03-06 10:00 225/ 17- 18
Request to render Security Services at Mary Moodley Child and Youth Care Centre for a period of 24 Months 2018-03-16 11:00 GT/ GDSD/ 055/ 2018
Supply: Elastic bandage 50mm x 4.5m(stretched) (12 rolls per pkt); Elastic bandage 100mm x 4.5m(stretched) (12 rolls per pkt) 2018-03-02 11:00 ZNQ 132/ 2017
Request for proposal for the appointment of a contractor for construction of electrical works, access road and water supply system 2018-03-27 11:00 GGDA/ 19/ 2017- 18/ GIDZ_INFRASTRUC
Rendering of a Security Service for period of two years (24 months) at CNR Leta & Moropotsane Street ,Phuthaditjhaba ,Qwa-qwa, 9866 2018-03-15 11:00 FSDOL07/ 2018
Appointment of a service provider for the supply, installation and maintenance of backup generators, uninterrupted power supply (UPS) unit, air-conditioners including consequential general building, electrical, mechanical, civil and engineering works in various DHA offices and Port of Entry for a period of three (3) years. 2018-03-16 11:00 DHA04- 2018
Re-Advert - Provision of alarm with armed response services and security guards at the CETA head office in Midrand. 2018-03-02 11:00 018- 2017/ 2018
Provision of ICT desktop support services for a period of 3 years. 2018-03-16 11:00 CONHILL/ 02/ FAC/ 2018
Request for proposal for the appointment of a service provider to project manage the GIDZ marketing campaign 2018-03-26 11:00 GGDA/ 18/ 2017- 18/ GIDZ_MARKETING
Faulty Find and Repair Calorifier Since Has No Hot Water in Nurses Home Building 2018-03-02 11:00 ZNQ 133/ 2017
Provision of internet connectivity services for a period of 3 years. 2018-03-15 11:00 CONHILL/ 04/ FAC/ 2018
Supply of maintenance, support and a minor upgrade for the Department of Trade and Industries (the dti) Checkpoint infrastructure. 2018-03-16 11:00 RFB 1704/ 2017
Invitation to service providers to supply MPLS connectivity between The Commission’s Main Data Center located at The DTI Campus, 77 Meintjies Street, Sunnyside, Pretoria and the Remote Sites. 2018-03-16 11:00 CIPC BID NUMBER: 31/ 2017/ 2018
Repair and Maintenance of Accessible Lifts, for a period of 3 years, including Lift Replacement Project 2018-03-16 11:00 CONHILL/ 01/ FAC/ 2018
Identification of premises for office space for the NDA to be occupied over a period of three years with an option to renew at NDA’s sole discretion for an additional twenty-four months at intervals of twelve months each 2018-03-22 14:00 NDA26/ FIN15/ 18
Manufacturing, supply and delivery of poncho, HRD trainee for a period of three (3) years in accordance with specification SAPS 3231/17 Version 01.0/June 2017: Division: Supply Chain Management. 2018-03-27 11:00 19/ 1/ 9/ 1/ 95TC (17)
Appointment of Suitable Service Provider to Provide Office Accommodation to the MICT Seta Cape Town Offices for a period 36 months Subject to Renewal Of MICT Seta License 2018-03-16 11:00 MICT- SETA/ OACPT/ 2018
Manufacturing, supply and delivery of jersey HRD trainee unisex for a period of three (3) years in accordance with specification SAPS 3206/17 Version 01.0/ April 2017 2018-03-27 11:00 19/ 1/ 9/ 1/ 94TC (17):
Appointment of Suitable Service Provider to Provide Office Accommodation to the Mict Seta Durban Offices for a period 36 months subject to Renewal of MICT Seta License 2018-03-16 11:00 MICT- SETA/ OADBN/ 2018
The supply and delivery of protective clothing and uniform for mortuaries 2018-03-02 11:00 339, 340, 347, 335/ 17/ 18

Pages

Tender adjudication process

The SBD/WCBD6.1 document must form part of all bids invited.  It contains general information and serves as a claim form for preference points for Broad -Based Black Economic Empowerment (B -BBEE) Status Level of Contribution, and explains how tenders or bids are decided.

The document says:

  • The bidder obtaining the highest number of points will be awarded the contract.
  • Preference points shall be calculated after prices have been brought to a comparative basis.
  • Points scored will be rounded off to two decimal places... Read More
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