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.


Title Closing Date Tender No.
Construction of Indwe Feedlot 2019-01-18 16:00 ELM/5/12/2018T
Short term insurance 2019-01-21 12:00 226/2018
Provision for Travel Agency and Events Management Services 2019-01-21 12:00 ELM/7/12/2018T
Appointment of a panel of service providers to co-ordinate and fund-raise for all functions hosted by the Alfred Duma Local Municipality 2019-02-04 11:00 MO 01/2018
Supply and delivery of signage on an as and when required basis to PetroSA GTL Refinery, Mossel Bay 2019-02-04 12:00 CTT20938
Request for information [RFI] for the supply of an active freight wagon tracking solution 2019-02-05 10:00 HOAC-HO-28846
Supply and delivery of adhesives on an as and when required basis to PetroSA GTLR in Mossel Bay (call of contract) 2019-02-07 12:00 CTT0000020950
Supply and delivery of cutting and grinding materials on an as and when required basis to PetroSA GTL Refinery, Mossel Bay (call-of contract) 2019-02-07 12:00 CTT0000020951
Invitation to prospective service providers to apply to be included in the supplier database of the NECSA Learning Academy 2019-02-15 11:00 RFI 0006
Construction of Water Infrastructure in Juno Village and Fairlie Village – Phase I 2019-01-25 10:00 PM107/2018
Construction of Water Infrastructure in Kordon Village – Phase I 2019-01-25 10:00 PM108/2018
Construction of Water Infrastructure in Mahoai Village and Ceres Village – Phase I 2019-01-25 10:00 PM111/2018
Appointment of a Service Provider to Supply and Deliver Game Fence 2019-01-28 10:00 PM101/2018
Appointment of Service Provider to Conduct Biological (Fauna) Asset Count for Period of Three (03) Years 2019-01-28 10:00 PM99/2018
Appointment of Service Provider to Perform Valuation Count and Value (For Kroondraai Forest) for a Period of Three (03) Years 2019-01-28 10:00 PM100/2018
Supply and Delivery of Multi – Purpose Branches (Re-Advert) 2019-01-30 10:00 PM61/2018
Appointment of Two Service Provider for the Supply and Delivery of LED Lights for the Period of Three (03) Years 2019-01-31 10:00 PM103/2018
Supply and Delivery of Water Pipe Clamps for a Period of Three (03) Years 2019-01-31 10:00 PM105/2018
Appointment of a Service provider for the Provision and Installation of Traffic Lights and Signs and Associated Road Works (Multi Year 2018/19-2019/20) 2019-02-01 10:00 PM67/2018
Moletjie Rural Sanitation (Makibelo Village) 2019-02-01 10:00 PM110/2018


10 Features of a good Joint Venture Agreement

By W van Rooyen


A Joint Ventures is a good business idea to compete for tenders if one does not have all the necessary expertise that are required from a specific tender. The thing to remember though is that you must have a solid Joint Venture Agreement in place for your Joint Venture. A good, rock solid Joint Venture Agreement will protect the participants to the Joint Venture.

 Here are 10 features that any good Joint Venture Agreement... Read More

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