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.
Training of 50 beneficiaries in Further Education + Training certificate, Automotive Repair and Maintenance NQF LEVEL 4; SAQA ID 78525 2018-09-28 11:00 T/ 20/ 18 Learn AMR
Training of 50 beneficiaries in Vehicle Maintenance & Repair Assistant Skills Programme NQF L2 2018-09-28 11:00 T/ 27/ 18 Skill VMRA
Training of 50 beneficiaries in Further Education + Training certificate: Information Technology Technical Support NQF L4; SAQA ID 78964 2018-09-28 11:00 T/ 19/ 18 Learn TS
The appointment of a consultant to undertake specialist studies to inform the developable area for the proposed subdivision on ER84603, Retreat, Cape Town. 2018-09-20 11:00 SSC WC Q12 (2018 / 2019) DRDLR
Training of 50 beneficiaries in National Certificate, Information Technology, End User Computing, NQF Level 3; SAQA ID 49077 2018-09-28 11:00 T/ 21/ 18 Learn EUC
Training of 50 beneficiaries in Further Education + Training certificate: Information Technology Systems Development NQF L4; SAQA ID 78965 2018-09-28 11:00 T/ 18/ 18 Learn SD
Training of 50 beneficiaries in National Certificate, Animal Production, NQF Level 4, SAQA ID 48979 2018-09-28 11:00 T/ 24/ 18 Learn Animal
Internal Audit services 2018-09-28 11:00 T/ 14/ 18 IA
Appointment of the Service Provider to Undertake an Assessment of the Socio-Economic Impacts of the Implementation of the Waste Classification and Management Regulations and the Associated Waste Norms and Standards. 2018-09-21 11:00 Q- 119- 18- 19
Appointment of Auditors to Do Value for Money (VFM) and Performance Audits for Selected Projects within the Department’s Expanded Public Works Programmes 2018-09-21 11:00 Q- 113- 18- 19
Appointment of a Service Provider to Undertake the Hazard Identification and Risk Assessments (HIRA) and the Review of Existing as well as Development of Appropriate Risk - Responsive Control Measures at the Branch: Oceans & Coasts 2018-09-21 11:00 E 1468
Appointment of service for the manufacturing and delivery of 1000LT complete fire truck units for firefighting in the Eastern Cape Province for the Department of Agriculture Forestry and fisheries at regional office King Williams Town. 2018-09-21 11:00 4.4.12.4/ 17/ 18
Cleaning services for inner city hostels in Johannesburg for a period not exceeding 36 months (Denver, George Goch, Jeppe, LTA, MBA and Murray and Roberts). 2018-09-21 11:00 HLA 4/ 2/ 4- 2018/ 04
Appointment of a security contractor to render security services at Modimolle, Polokwane and Makhado for the Department of Agriculture, Forestry and Fisheries for a period of three (3) years. 2018-09-21 11:00 4.4.12.4/ 10/ 18
Provision and service of chemical toilets. 2018-09-25 11:00 HLA 4/ 2/ 4- 2018/ 05
The appointment of a security company to render security services in the Mpumalanga province at mbombela to the department of agriculture, forestry and fisheries for a period of three (3) years. 2018-09-21 11:00 4.4.12.4/ 11/ 18
The Western Cape Department of Agriculture (WCDoA) requires the service of a radio presenter. 2018-09-24 11:00 BID 848 - 2018/ 2019
Printing and binding of maternity case records for the Eastern Cape Department of Health Institutions for a period of 12 months . 2018-09-21 11:00 SCMU3- 18/ 19- 0135- HO
Request for Proposals to develop remuneration policy and philosophy for Council for Medical Schemes 2018-09-25 11:00 CMS022018/ 19
Appointment of a Service Provider to Provide Cleaning Services at the South African State Theatre for a period of three years 2018-09-21 14:00 SAST2018/ CLEANING

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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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