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.

Pages

Title Closing Date Tender No.
General Building Works for Hygiene Test Lab. 2018-11-27 10:00 TE18-SRX-1DF-08213-CIDB
Request Proposal for Contractor Appointment for Design, Manufacture,Install Wayfinding Signage. 2018-11-28 11:00 KIM08/2017
Provision of professional services for a multi-disciplinary feasibility study and concept design for the Western Suburbs Public Tranport Depot for a period of 14 months. 2018-12-06 11:00 SCM/19-66/S/2018-2019
Provision of professional services for a multi-disciplinary feasibility study and concept design for the development of the Njoli Public Transport Depot and Passenger Terminal for a period of 16 month. 2018-12-06 11:00 SCM/19-81/S/2018-2019
Installation of civil services in Kwanobuhle area 11: phase 5. 2018-12-06 11:00 SCM/19-46/C/2018-2019
The clearing of Erven in Hessequa Municipal area for a period of three (3) years. 2018-12-07 12:00 HES-TECH 12/1819
Supply & Delivery of Cleaning Material for Secunda Stores. 2018-11-20 12:00 RFQ: 8/3/2-88/2018
Port Engineering - Column Repairs to Tanker Berth. 2018-11-20 12:00 PEH 151/VB
RFQ for a SHE consultant for taxi ways projects. 2018-11-20 14:00 58299
Supply, Delivery, Repair or Replace 6 valves and Fasten Ranger Coupling at Valve Chamber Adullum Reservoir 2018-11-20 12:00 RFQ: 8/3/2-101/2018
Refurbishment of Woodlands & Sanddrift Water Treatment. 2018-11-23 12:00 11/2018
Refurbishment of Blikkiesdorp water treatment Plant. 2018-11-23 12:00 09/2018
Refurbishment of Twee Riviere Watewater works. 2018-11-23 12:00 10/2018
Supply and delivery of recycling and waste disposal management services for on board products. 2018-11-27 11:00 RFP: 050/18
Upgrading of John Steyn Library 2018-11-28 12:00 08/2/16/42
For provision of a service provider to assist the land bank to develop an enterprise development fund. 2018-11-20 11:00 T15/11/18
Request for proposals for the provision of Integrated Reporting Services. 2018-11-20 12:00 COR5675/2018/RFP
Design, fabricate and install a structural steel canopy complete with IBR roof cladding at the Cambrigde Goods Shed in East London. 2018-11-20 10:00 PTH54531CIDB
The supply and installation of new air conditioning units for Transnet Freight Rail at East London, Springfontein and Queenstown. 2018-11-20 10:00 PTH/54455CIDB
Supply and delivery of office furniture. 2018-11-20 10:00 WRAC/KBC/28012

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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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