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:


Title Closing Date Tender No.
Provision of Office Accommodation: Siyabuswa Satellite Office for a leased period of 5 years.(Leases ranging from seven to ten years will also be considered) 2018-08-24 11:00 32/ 2018
ORBIT TVET College invites capable and competent service providers to supply and deliver New Classroom Furniture for CET. 2018-08-24 11:00 CET01/ 2018
Provision of Office Accommodation: Dundee Satellite Office for a leased period of 5 years.(Leases ranging from seven to ten years will also be considered). 2018-08-24 11:00 33/ 2018
Provision of a comprehensive catering service to Eerste River Hospital under control of the Department of Health, Western Cape Government for a 3-year period. 2018-08-17 11:00 WCGHSC0096/ 2018
Provision of Office Accommodation: Ladysmith Local Office for a leased period of 5 years.(Leases ranging from seven to ten years will also be considered) 2018-08-24 11:00 29/ 2018
Provision of Office Accommodation: Estcourt Satellite Office for a leased period of 5 years.(Leases ranging from seven to ten years will also be considered) 2018-08-24 11:00 27/ 2018
Supply Chest Freezer - Frost Free. 410 - 500L 2018-07-27 11:00 ZNQ 07/ 05/ 2018
Request for the procurement of external vendors to assist with creation of Records Centre. 2018-08-14 11:00 RFB 1773/ 2018
Provision of Office Accommodation: Port Shepstone Local Office for a lease period of 5 years or more 2018-08-24 11:00 28/ 2018
Provision of Office Accommodation: Grahamstown Local Office for a lease period of 5 years or more. 2018-08-24 11:00 35/ 2018
Draining Pumps; Circulator Pump 2018-07-27 11:00 ZNQ 30- 2018/ 19
Hosting Event Management, Erection Exhibition Stalls and Décor Services for the Department of Defence for the DOD Suppliers day. (Procurement Plan Number: DOD PROC PLAN 18-19/LOG DIV/572). 2018-08-20 11:00 CPSC- B- G- 085- 2018
Supply and delivery of building materials to 11 Sections in Tshakhuma Village, Vhembe District. 2018-08-13 11:00 WRC- 010- 18/ 19
Pounding yard for Department of Community Safety for a period of 60 months (05 years) 2018-08-10 11:00 GT/ GDCS/ 083/ 2018
Establishment of a Pre-Qualified Service Providers for the Supply and Installation of library furniture (including space planning and layout) for a period of 36 months. 2018-08-10 11:00 GT/ GDSACR/ 091/ 2018
The Rural Housing Loan Fund NPC (RHLF) is a Schedule 3A public entity and Development Finance Institution reporting to the Minister of Human Settlements. In terms of PFMA, the company is required to have an internal audit function reporting to its Audit and Risk Committee. As RHLF is a small entity this function is outsourced and the company now calls for tenders, from established internal auditing firms, to undertake this work from August 2018 for a three-year period. 2018-08-21 16:00 IA001
Appointment of a Qualification Development Facilitator to develop and realign occupational qualification. 2018-08-21 11:00 QDF/ PSETA/ 2018- 07
Mixer Pillar Elbow; Mixer Bib Elbow; Geyser 200 L; Geyser 150 L; Heavy Duty shire low level Cistern; PVC Toilet Flushing Mechanism 2018-07-27 11:00 ZNQ 31- 2018/ 19
NC092 - Dikgatlong Local Office Accommodation. 2018-08-10 11:00 IEC/ NC- 03/ 2018
Appointment of a service provider to supply, install and integrate an enterprise level Nintex or equivalent business process automation tool solution with the NRF’s existing sharepoint infrastructure and support the tool solution for a period of five years. 2018-08-16 11:00 NRF/ CORP- RISA ICT/ 002/ 2018


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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