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.
01 Pkt swabs gauze absorb 100mmx100mmx8ply pkt/100 (12 months contract) 2018-10-01 11:00 ZNQ C1A / 2018/ 2019
The Road Accident Fund (RAF) is requesting lease proposals for not less than 500m² and not more than 600m² for a suitable office space for the Mafikeng CSC for a period of five (5) years 2018-09-28 11:00 RAF/ 2018/ 00039
Request for qualification: Strategy Formulation and employee engagement sessions. 2018-10-02 12:00 MTK20/ 2018
RSR invites proposals from highly qualified, experienced and registered companied in the Property Management Sector for the provision of office accommodation. 2018-10-02 12:00 RSR/ FFMS/ OA/ 001/ 08/ 2018
BUF - Buffalo City - King William’s Town Local Office Accommodation 2018-09-21 11:00 IEC/ EC- 04/ 2018
Appointment of a Multi-Disciplinary Entity to Provide Professional Services for Repairs and Renovations at Department of Agriculture & Rural Development: State Building - 230 Currie Road, Durban 2018-10-01 11:00 WIMS 069538
Cape Town Magistrate Office: installation of Centralised Air Conditioning and standby gen set inclusive of building work: Completion of contract 2018-09-21 11:00 CPT1003/ 18
Appointment of a service provider for building maintenance services to the MHSC for a period of 36 months. 2018-10-02 11:00 MHSC006/ 2018- 19
24 Months Term Contract for Provisioning of Cleaning Services at Justice in the Western Cape : AREAS 1 - 9 2018-09-21 11:00 CPTYT15/ 18 - CPTYT23/18
Legal Aid SA would like to invite firms of attorneys to enter into agency agreements to assist all legal aid clients in certain identified courts on a retainer basis. 2018-10-02 12:00 42/ 2018
Doctors accommodation for Frere hospital 2018-09-21 11:00 SCMU3- 18/ 19- 0282- FRE
Thulamahashe: Dol: Acquisition of Office Accommodation Measuring 156.25sqm and 05 Parking Bays 2018-10-01 11:00 NST18/ 034
Bushbuckridge/ Thulamahashe/ Acornhoek: GPAA: Acquisition of Office Accommodation Measuring 480.23sqm and 23 Parking Bays 2018-10-01 11:00 NST18/ 033
Appointment of a suitable panel of recruitment agencies to provide recruitment services for a period of three (03) years for the Independent Communication Authority of South Africa on an 80/20 PPPFA 2000, Preferential Procurement Regulation: 2017. 2018-10-03 11:00 ICASA 05/ 2018
Unscheduled Maintenance for Plumbing and Drainage in State Owned Buildings: Gert Sibande District Municipality 2018-09-21 11:00 NST18/ 031
Appointment of a suitable service provider to administer a 360 degree Online assessment annually (once a year) for the period of three (03) years at the Independent Communication Authority of South Africa on an 80/20 PPPFA 2000, Preferential Procurement Regulation: 2017. 2018-10-04 11:00 ICASA 06/ 2018
Appointment of a panel of Psychometric and competency assessment service provider for a period of three (03) years for the Independent Communication Authority of South Africa on an 80/20 PPPFA 2000, Preferential Procurement Regulation: 2017. 2018-10-02 11:00 ICASA 04/ 2018
Unscheduled Maintenance for Plumbing and Drainage in State Owned Buildings: Nkangala District Municipality 2018-09-21 11:00 NST18/ 030
Terms of reference for the manufacturing, delivering and installation of senior manager furniture for the Department of Economic Development ‘S Head Office (56 Eloff Street). 2018-09-21 11:00 GT/ GDED/ 118/ 2018
Unscheduled Maintenance for Plumbing and Drainage in State Owned Buildings: Ehlanzeni District Municipality 2018-09-21 11:00 NST18/ 029

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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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