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

Having a good B-BBEE status level is VERY IMPORTANT in the tender process!

All tender documents will have 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, 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.

New Preferential Procurement Regulations 2017 for Tenders

The brand new Preferential Procurement Regulations 2017, have been finalized and gazetted on 20 January 2017. There are some interesting changes and challenges that we will discuss during the coming months. We start off with 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.

General Procurement Guidelines

Government issued the General Procurement Guidelines not only as a prescription of standards of behaviour, ethics and accountability which it requires of its public service, but also as a statement of Government's commitment to a procurement system which enables the emergence of sustainable small, medium and micro businesses which will add to the common wealth of South Africa and the achievement of enhanced economic and social well-being of all South Africans.

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

Functionality in Tenders (1)

The Preferential Procurement Policy Framework Act 2017, establish the rules according to how Government Entities must evaluate tenders. The Preferential Procurement Regulations of 2017 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 - Preferential Procurement Regulations, 2017, pertaining to the Preferential Procurement Policy Framework Act, Accounting Officers and Accounting Authorities of all public entities listed in Schedules 2, 3A, 3B, 3C and 3D to the PFMA 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.


Title Closing Date Tender No.
Construction of 40KL elevated water tank at Mduku clinic- Hlabisa. 2018-10-19 11:00 ZNTU 03407 W
DUTYWA MAGISTRATE: Replacement of damaged wall. 2018-10-12 11:00 MTH 58/ 2018
KwaZulu-Natal: Department of Public Works: eThekwini Region: Durban: Installation of 800KVA standby generator for the Mayville Complex and Relocation of the existing 400KVA to iLembe District Office. 2018-10-29 11:00 ZNTD 04430W
14 SAI BATALLION: Office & Staff Quarters - Repairs to Storm Damage. 2018-10-12 11:00 MTH 56/ 2018
14 SAI BATTALION: Garrison Village - Repairs to Storm Damage Required CIDB grading: 3 GB or Higher. 2018-10-12 11:00 MTH 57/ 2018
Construction, Furnishing and Delivery of the New Boitumelo Clinic. 2018-10-18 11:00 DID40/ 09/ 2018
The South African National Roads Agency SOC Limited (SANRAL) invites tenders from qualified Bidder/s to enter into an agreement for DATABASE Administration and Managed Services (Oracle, Microsoft Mssql and Mongodb). 2018-10-16 14:00 NRA 58000/ 2018/ ORAMSSQL
Appointment of a service provider to render 24 hour security services for the KZN Department of Human Settlements at Ugu District Offices, for a period of 12 months. 2018-10-18 11:00 ZNB44/ 2018/ 19HSE
Appointment of a panel of service providers to undertake plumbing work for the KZN Department of Human Settlements on a rotational basis for a period of 2 years. 2018-10-23 11:00 ZNB20/ 2017/ 18HSE
Appointment of a panel of service providers to undertake electrical work / maintenance for the KZN Department of Human Settlements on a rotational basis for a period of 2 years 2018-10-22 11:00 ZNB18/ 2017/ 18HSE
Appointment of a panel of service providers to undertake building maintenance and roof repair work for the KZN Department of Human Settlements on a rotational basis for a period of 2 years. 2018-10-24 11:00 ZNB17/ 2017/ 18HSE
Appointment of a contractor to undertake the construction of 261 Breaking New Ground (BNG) housing units at the Forestdale/ Dlamini residential sites in Dundee within the Endumeni Local Municipality. 2018-10-19 11:00 ZNB45/ 2018/ 19HSE
Appointment of a panel of service providers to undertake land clearing work / field maintenance for The KZN Department of Human Settlements on a rotational basis for a period of 2 years. 2018-10-25 11:00 ZNB19/ 2017/ 18HSE
Establishment of a pre-qualified service providers for the provision of an alternative building technology for a period not exceeding 36 months. 2018-10-18 11:00 HLA 4/ 2 / 4 - 2018 / 06
Follow on Contract: East London & Surrounding Areas: Maintenance of Mechanical Equipment for State Owned Building. (Mechanical Engineering Services) 2018-10-16 11:00 PET25/ 2018
Chilled water air cooled chiller replacement: R K Khan Hospital. 2018-10-22 11:00 ZNB 9630/ 2018- H
Connection of electricity/water, sanitation and building of ramps stairs/walk way at Masons clinic. 2018-10-01 11:00 ZNQ 23/ 18/ 19
Appointment of a service provider to provide maintenance and repairs of x-ray machines and walkthrough metal detectors to the NPA for a period of three (3) years. 2018-10-22 11:00 NPA 04- 18/ 19
Supply, installation, commissioning of weighing balances including training and maintenance for three (3) years in accordance with specification no 32120: Division: Visible policing. 2018-10-23 11:00 Bid no. 19/ 1/ 9/ 1/ 180TR (17/ 18)
Supply, Maintenance and Servicing of Tractors and Accessories for SANParks for a period of five (5) years. 2018-10-04 11:00 GNP- 025- 18


Advantages and disadvantages of Consortiums

Consortiums are often considered as entities to use when responding to tenders in South Africa. The question that arises is whether to use a Consortium or a Joint Venture when responding to a tender. To help you with this we have compiled a list of advantages and disadvantages for both Consortiums as well as Joint Ventures. In this article we list the advantages and disadvantages of Consortiums. Look out for the same article on Joint Ventures.

Consortiums Advantages:

  • Easy to establish as there are no formal procedures... Read More
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