Procurement Regulations | Page 4 |

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.
Sale of Industrial Erven – Aberdeen 2018-06-07 12:00 46/2018
Supply, Delivery, Installation and Commissioning of a Conference Microphone System 2018-06-07 12:00 47/2018
On Management Information System. 2018-06-18 11:00 RFI/01/On Management Information System/18/19/MK
Tenders are invited to Repair Compactor Tailgate Slide Pins 2018-05-29 11:00 CSQ05181296
The Supply and Delivery of Wet Rations, bread and rolls to the Department of Defence (West Coast area). 2018-10-11 11:00 SPSC- B- 003- 2018
Delivery /Mobile Post Box Solution. 2018-06-18 11:00 RFI 03/Delivery /Mobile Post Box Solution/18/19/MK
Automated Parcel Locker/Pack Station Solution/18/19/MK. 2018-06-18 11:00 RFI 02/Automated Parcel Locker /Pack Station Solution
The Supply and Delivery of Wet Rations, various meat (fresh and frozen) to the Department of Defence (West Coast area). 2018-10-11 11:00 SPSC- B- 002- 2018
Tenders are invited to Conduct Research of Artist as well as Host Cluster Indaba's 2018-05-28 11:00 CSQ05181291
Request For Information For A Suitable Mobile APP Solution. 2018-06-18 11:00 RFI 04/Request For Information For a Suitable Mobile APP Solution /18/19/MK
Financing of Emalahleni Local Municipality multi year capital budget for 2018/2028 for the amount of r 15 000 000.00 by means of external loan from a financial institution in line with National Treasury Investment Regulation. 2018-06-18 12:00 ELM/6/5/2018T
The Breede Valley Municipality invites tenders for the provision of speed law enforcement and back office services for a period not exceeding three (3) years (36 months), of which the first two (2) years will be operational and the remaining year (12 months) will be a dry run. 2018-06-22 11:00 BV 694
The Supply and Delivery of Wet Rations, various fish (fresh and frozen) to the Department of Defence (West Coast area). 2018-10-11 11:00 SPSC- B- 001- 2018
The Breede Valley Municipalities invites tenders for the professional interpretation and translation services for the period ending 30 June 2021. 2018-06-22 11:00 BV 708
The Supply and Delivery of Dry Rations, Coffee, Tea and Cooking Oil to the Department of Defence (West Coast area). 2018-10-25 11:00 SPSC- B- 012- 2018
Supply, delivery and offloading of lime to Umgeni Water’s Operational area in Kwazulu Natal. 2018-06-28 12:00 2018/137
The Supply and Delivery of Dry Rations, Condiments, Pickles and Herbs and Spices to the Department of Defence (West Coast area). 2018-10-25 11:00 SPSC- B- 011- 2018
Maintain and repair Centlec (SOC) fleet of distribution transformer and associated equipment. 2018-06-29 11:00 RFP31 -2017
Pool of contractors for Civil engineering and general building works (CIDB grading 6-8) to be appointed on an "as and when" required basis for the period of 36 months. 2018-06-29 12:00 G/G/M/015/005/2018
Request for the Appointment of a Service Provider to Supply and Deliver of Pothole Repair Material for Department of Police Roads and Transport for a Period of 36 Months (TENDER DOCUMENT AMOUNT R500) 2018-06-15 11:00 PR&T/BID01/2018/19


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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