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.
The Province of KwaZulu Natal,Department of Transport,invites tenders from Vukuzakhe Contractors: Tenderer must be registered as grade 3 CE only with the CIDB in the Civil Engineering class of construction works. 2018-09-28 11:00 ZNT373T/ C235/ 1100/ S/ 10
The Province of KwaZulu Natal,Department of Transport,invites tenders from Vukuzakhe Contractors: Tenderer must be registered as grade 3 CE only with the CIDB in the Civil Engineering class of construction works 2018-09-28 11:00 ZNT373T/ C235/ 1100/ S/ 5
Appointment of an accredited training provider to provide training in Project Management skills programme for 340 public service officials. 2018-10-01 11:00 LP19/ 20/ 02/ PSETA/ 2018- 23
01 Boxes Dressing wound non adherent knitted cellulose acetate fabric impregnated with a specially formulate petrolum emulsion sterile individually peel packed size 7.5cmx20cm box/24 (12 months contract ) 2018-10-01 11:00 ZNQ C4H/ 2018/ 2019
The Province of KwaZulu Natal,Department of Transport,invites tenders from Vukuzakhe Contractors: Tenderer must be registered as grade 3 CE only with the CIDB in the Civil Engineering class of construction works 2018-09-28 11:00 ZNT373T/ C235/ 1100/ S/ 12
01 Boxes dressing wound gauze paraffin BP 10CMX40CM BOX/10 (12 months contract). 2018-10-01 11:00 ZNQ C4G/ 2018/ 2019
Appointment of an accredited training provider to provide training in customer care skills programme for 590 public service employees 2018-10-01 11:00 LP18/ 19/ 01/ PSETA/ 2018- 23
Betterment & Re-graveling of L2358 within Buhlebamakhosi Rural Road Transport Forum 2018-09-28 11:00 C252/ 1819/ BR/ 462
01 Boxes Dressing gauze chlorhexidene bp 10x40cm box/10 (12 months contract). 2018-10-01 11:00 ZNQ C4F 2018/ 2019
Appointment of an accredited training provider to conduct recognition of prior learning for 100 Public Service Sector employees against the National Diploma: Public Administration NQF 7, 260 credits. 2018-10-01 11:00 RPL/ 01/ PSETA/ 2018- 23
Betterment & Re-graveling of L1364 in the Amajuba District 2018-09-28 11:00 C252/ 1819/ BR/ 471
01 Pkt swabs gauze absorb 225x225x16ply pkt/100 (12 months contract). 2018-10-01 11:00 ZNQ C1C / 2018/ 2019
Betterment & Re-graveling of L1364 in the Amajuba District. 2018-09-28 11:00 C252/ 1819/ BR/ 469
01 Boxes dressing wound activated charcoal with silver 190x105cm box/10 (12 months contract). 2018-10-01 11:00 ZNQ C4D/ 2018/ 2019
Appointment of a service provider to provide research services for the review of the PSETA qualifications. 2018-10-01 11:00 SSP&R/ PSETA/ 2018- 09
Appointment of a Contractor for the Upgrading of the Suurbraak Wastewater Treatment Works, Swellendam in Western Cape Province 2018-09-21 11:00 SSC WC 11 (2018/ 2019) DRDLR
01 Pkt swabs gauze absorb 225x225x16ply pkt/100 (12 months contract). 2018-10-01 11:00 ZNQ C1B / 2018/ 2019
Request for information - audit remediation. 2018-09-28 11:00 EFC0205432
Appointment of suitable service provider to lease suitable office accommodation for period of five years for the SAHRC Limpopo office with the option of cancellation after 3 year into the contract 2018-10-03 11:00 ref 8/ 1/ 5
Procurement for Voice-over-IP (VOIP) telephony Services for a period of 36 Months. 2018-09-21 11:00 NEMISA/ 2018/ VOIP/ RFB003

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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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