Procurement Regulations | Page 6 |

Tenders, B-BBEE and the new Preferential Procurement Regulations 2017

We have previously asked: How important is a good B-BBEE status level of contributor in the tender process?

The answer is still the same: VERY IMPORTANT!

In all tender documents, you will find 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 of contributor, 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.

Brand new Preferential Procurement Regulations 2017 for Tenders

The brand new Preferential Procurement Regulations 2017, has been finalized and was gazetted on 20 January 2017. There are some interesting changes and challenges that we will discuss during the coming months. This is 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.

Draft Procurement Regulations Media Release

 The Draft Procurement Regulations 2016 were released on 14 June 2016. If these regulations are going to be implemented it will change the Tender environment in South Africa. Below is the media release from the Office of the Chief Procurement Officer, explaining the major changes in the Regulations:

“The Office of the Chief Procurement Officer (OCPO) has published the proposed new Preferential Procurement Regulations*, to afford the public an opportunity to comment.

General Procurement Guidelines

Government issued the General Procurement Guidelines not only as a prescription for standards of behaviour, ethics and accountability, which it requires of its public service, but also as a statement of their commitment to a procurement system enabling the emergence of sustainable small, medium and micro businesses. These SME's will add to the common wealth of the country and its objective of enhanced economic and social well-being for all its people.

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

The Preferential Procurement Policy Framework Act 2011, establishes the rules according to how Government Entities must evaluate tenders. The Preferential Procurement Regulations of 2011 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*, Accounting Officers and Accounting Authorities of all public entities** 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.

Draft Procurement Regulations 2015

The Government thought it a good idea to have a look at the Preferential Procurement Regulations of 2011 and to change these Regulations to better fit the South African Tender Environment.

These Regulations were quietly issued end of 2015 for public comment.

As the case with most new Regulations or Acts there is always good and bad that accompanies it.

Some of the good things addressed in these draft regulations are:


Title Closing Date Tender No.
FASSET requires the services of a suitable qualified service provider to provide research services to the organisation. 2018-06-08 11:00 FAS/ LD/ RES/ RESEARCH/ CON954
Leasing Printing Machine (80/20 Preferential Points Scoring). 2018-06-18 11:00 RFT02 2018_19
Supply I-Care (Electronic Tonometer) Battery Operated 2018-05-25 11:00 ZNQ 57 / 18 / 19
Appointment of not more than six (6) Preferred Service Providers that are registered with South African Association of Freight Forwarders (SAAFF) and that is in possession of the relevant permits and or licenses to forward and clear sector specific consignment for example dangerous and hazardous substances such as chemicals etc for EMIA Customers utilising EMIA Group Offerings on a Task Order basis for a period of three (3) years. 2018-06-08 11:00 dti 03/ 18- 19
The accreditation of a panel of render services relating to Restitution projects for a period of 36 months. 2018-06-01 11:00 5/ 2/ 1/ 2/ 3- 2018/ 2019
Annual service to Infrared for Hospital as per specification 2018-05-25 11:00 ZNQ 13 / 18 / 19
Provision of Catering Services for Excelsior Place of Safety. 2018-06-22 11:00 KZNB06/ DSD/ 2018
Appointment of a panel of qualified town planning professionals to provide professional services for the National Department of Public Works for a period of three years (36 months) in Mpumalanga Province. 2018-06-19 11:00 H18/ 004AI
Invitation of bids for the appointment of service provider to conduct a detailed investigation into assessing the impact of blasting activities carried at Midmar Crushers to the cracking of houses neighboring the mine. 2018-06-15 11:00 DMR/ 003/ 2018/ 19
Annual Service to Boomgate as per specification 2018-05-25 11:00 ZNQ 59/ 18 / 19
The appointment of an independent service provider to assist the department to develop a business case for institutional arrangements for world heritage sites in South Africa for the period of eighteen (18) month(s). 2018-06-08 11:00 E 1446
The appointment of a suitable independent service provider to provide the sector with the necessary strategic capability to manage, coordinate and implement The Expanded Public Works Programme (EPWP) Phase IV for the environment and culture sector. 2018-06-08 11:00 E 1447
The appointment of the service provider to assist the Department with the review of the implementation and the effectiveness of South Africa’s plastic bag policies, with a view to making recommendations for policy improvement including if necessary on a new plastic bag policy direction. 2018-06-08 11:00 E1448
The appointment of a panel of service providers to undertake technical feasibility assessment for the Department of Energy (DOE ) under national solar water heating programme for the period 2018/19, 2019/2020 and 2020/2021 financial years. 2018-06-08 11:00 DOE/ 010/ 2017/ 18
Appointment of a Contractor for Regional Management Support Services to Sekhukhune District Municipality in the Limpopo Province. 2018-06-01 11:00 MISA/ RMSC/ SDM/ 003/ 2018
Major Service to Hospital Air-Condition as per specification 2018-05-25 11:00 ZNQ 25 / 18 / 19
Appointment of a service provider to develop, support and maintain an Integrated Electronic Built Environment System for a period of 24 months. 2018-06-08 11:00 CBE 1/ 2018
Annual service to Hospital Fire Equipment as per specification 2018-05-25 11:00 ZNQ 09 / 18 / 19
Appointment of a preferred-list of contractors for closure of mine openings. 2018-06-20 11:00 CGS- 2018- 002
Supply of Gynacology Examination Couch 2018-05-25 11:00 ZNQ 55 / 18 / 19


Tender adjudication process

The SBD/WCBD6.1 document must form part of all bids invited.  It contains general information and serves as a claim form for preference points for Broad -Based Black Economic Empowerment (B -BBEE) Status Level of Contribution, and explains how tenders or bids are decided.

The document says:

  • The bidder obtaining the highest number of points will be awarded the contract.
  • Preference points shall be calculated after prices have been brought to a comparative basis.
  • Points scored will be rounded off to two decimal places... Read More
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