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.

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Title Closing Date Tender No.
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
Appointment of a service provider for the rendering of cleaning, hygiene and fumigation services for the South African National Biodiversity Institute: Pretoria National Botanical Garden for a period of 36 months. 2018-10-19 11:00 SANBI: G310/ 2018
Request for a service provider to maintain and support Internet Protocol (IP) telephony for The Office of the Public Service Commission (OPSC) for a period of 36 months. 2018-10-08 11:00 OPSC 004/ 18
Design, manufacture, delivery and support for 30 RF shielded enclosures for the HERA nodes at SARAO in the Northern Cape. 2018-10-12 11:00 NRF SARAO HERA 005 2018
Appointment of a service provider to conduct wellness screening and related support services for employees within the employ of the Kwazulu-Natal Legislature. 2018-10-17 11:00 KZNL 17/ 2018
Invitation to experienced catering companies to rent the vacant cafeteria space for a period of three (3) years. 2018-10-08 11:00 HSRC/ 18/ 2018/ 19
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
Terms of reference for the appointment of a service provider to supply, deliver and offload shearing shed equipment and machinery for SENQU FPSU (Herschel Wool Growers Association) In SENQU Local Municipality at Joe Gqabi District, Eastern Cape Province. 2018-10-12 11:00 DRDLR: EC 007(2018/ 2019)
Follow on contract: East London, Queenstown & surrounding areas: Maintenance of electrical equipment for state owned buildings. (Electrical Engineering services) 2018-10-16 11:00 PET26/ 2018
Follow on contract: Port Elizabeth Regional Office: Maintenance of passenger and goods lifts. (Electrical engineering services) 2018-10-16 11:00 PET28/ 2018
Follow on contract: Port Elizabeth & surrounding areas: Maintenance of electrical equipment for state owned buildings. (Electrical engineering services). 2018-10-16 11:00 PET27/ 2018
Supply, delivery and off-loading perishable provisions. 2018-11-06 11:00 LMN 06/2018 LIMPOPO
External and Internal Painting of Water Pump Stations in Swartland Municipal Area. 2018-10-11 11:00 SCM46/18/19
Cleaning and repairs of the Water Treatment Plant (WTP) effluent launders at Duvha Power Station. 2018-09-27 10:00 MPGXC005249R
Supply and delivery of Relay Solid State at Millsite, Krugersdorp. 2018-09-27 10:00 RFQ CRAC-HO-27985.
The Provision of Supply, Delivery of Antenna; Radio, 919.25 to 921 MHZ & Plate Mounting ; 236060 – 115000, Ansys; Assy. 2018-09-27 10:00 RFQ CRAC-HO-27982.
Manufacture, Supply and delivery of 3 x Free Standing Spectator Pavilions 2018-10-04 11:00 SCM42/18/19

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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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