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.
Chairs Recliner x 30 Units 2018-07-27 11:00 ZNQ 28- 2018/ 19
Supply and configure a next generation firewall including advanced threat protection solution for two NRF sites and a five year maintenance and licensing service for related hardware and software requirements. 2018-08-18 11:00 NRF/ CORP- RISA ICT/ 003/ 2018
Security Warehousing and Distribution 2018-08-20 11:00 IEC/ LG- 05/ 2018
Cabinets; Cupboards; Lockers - 6 Tiers; Lockers - Single; Shelving; 2018-07-27 11:00 ZNQ 24- 2018/ 19
Engcobo Magistrate office : Condition base maintenance 2018-08-10 11:00 MTH 35/ 2018
Fryer; Toaster; Bain Marie table top; Vegetable Prep. Machine; Trolley - Dish clearing; Trolley - Tea 2018-07-27 11:00 ZNQ 26- 2018/ 19
The appointment of a service provider to assist GGDA with its 6th term of governance 5 year strategy 2019-2024. 2018-08-24 11:00 GGDA/ 06/ 2018- 19/ CORPORATE STRA
The appointment of an external service provider to undertake evaluation of GGDA programmes. 2018-08-24 11:00 Gauteng: Gauteng Growth and Development Agency
Department of Health: Empangeni: Hiring of office accommodation. 2018-08-17 11:00 ZNT 7850 W
Department of Agriculture and Rural Development: Mtubatuba: Hiring of office accommodation 2018-08-17 11:00 ZNT 7852 W
The Financial Intelligence Centre requires proposals from service providers that will provide a Syspro support and upgrade. 2018-08-10 11:00 FIC/ RFB/ SYSPRO/ 0003/ 1/ 2018/ 19
Department of Education: Empangeni: Hiring of office accommodation. 2018-08-17 11:00 ZNT 7853 W
The services of a suitably qualified company to provide ICT systems and support services including an MIS, accounting system, SCM system, payroll and leave system, call centre function, disaster recovery and other related solutions. 2018-08-17 11:00 FAS/ ET/ EXE/ ICTSYSTEMS/ CON1002
Fridges Bar,; Fridges 314L; Freezer Chest 2018-07-27 11:00 ZNQ 27- 2018/ 19
Terms of Reference for the appointment of an accredited service provider for the implementation of Learnerships and Skills Programme for the ETDP SETA. 2018-08-14 11:00 SCMU: 08 - 2018/ 19
Microwaves; Kettles; Hydroboils; Water dispensers 2018-07-27 11:00 ZNQ 25- 2018/ 19
Department of Agriculture and Rural Development: Mbonambi: Hiring of office accommodation. 2018-08-17 11:00 ZNT 7844 W
The South African National Roads Agency SOC Limited (SANRAL) invites tenders from qualified Bidder/s to enter into an agreement for the provision of SAP digital transformation, and end-to-end solution and support services. Only Bidders who are BBBEE compliant and are between level 1,2,3 and 4 are eligible subject to a minimum of 30 % of the contract value to be subcontracted to EME’s or QSE’s with a level 2 or higher BBBEE compliance. 2018-08-15 14:00 NRA 58000/ 2018/ SAP
Department of Community Safety and Liaison: Mkuze: Hiring of office accommodation 2018-08-17 11:00 ZNT 7856 W
The NEF herewith invites potential service providers to submit proposals for the provision of RFP: NEF 03/2018: Payroll and Automated Leave Services for the NEF 2018-08-03 14:00 RFP: NEF 03/ 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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