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.
24 Months Contract: 2x Change Annually of the Primary and Secondary Filters as per existing for the Theatres (1,2,3 And 4) as per the specification attached. 2018-11-23 11:00 ZNQ 00138/ 18
24 Months Contract Service and Repairs on the 2 Autoclaves as per the specification attached 2018-11-23 11:00 ZNQ 00137/ 18
24 Months Contract Treatment of the Water for the Chiller Plants as per the specification attached 2018-11-23 11:00 ZNQ 00139/ 18
Conversion of 18 Toyota Hilux Pickup Vans Into Ambulances For Ems: Once Off Contract 2018-11-20 11:00 ZNB 9636/ 2018- H
Supply and Deliver Equipment for Public Ordinary Schools In Respect of the Following Services: Service 1: Supply, deliver and install 21 Photocopier Machines; Service 2: Supply, deliver and install 32 Duplicating/Risograph machines; and Service 3: Supply and deliver 63 Scrubber polish Machines. 2018-11-23 11:00 B/ WCED 2461/ 18
Appointment of a Contractor for the Restoration and Renovation of the Council For Geoscience Office Building In Port Elizabeth. 2018-11-26 11:00 CGS- 2018- 014F
The Supply and Delivery of Maxillofacial and Oral Surgery Including Implants for Greys Hospital, King Edward Viii Hospital & Inkozi Albert Luthuli Central Hospital : 3 Year Contract. 2018-11-20 11:00 ZNB 5495/ 2017- H
Supply and Delivery of Administartion / Giving Sets: Needle Free Admin and Blood Giving Sets, Extension Sets, Ivi Fluid Access Devices, Securement Devices for Lines and Catheters: Various Institutions: Contract Period: 3 Years 2018-11-21 11:00 ZNB 6730/ 2018- H
The Supply and Delivery of Occupational Therapy Consumables: Various Institutions for a Three Year Period 2018-11-21 11:00 ZNB 6573/ 2018- H
Supply and Delivery of Physiotherapy Therapy Consumables For Various Institutions In KZN: Department of Health: Three Year Period. 2018-11-21 11:00 ZNB 5728/ 2017- H
The Supply, Delivery, Installation, Commissioning and Maintenance of Imaging One X-Ray Digital System including PACS (Picture Archiving and Communication System) for economical storage and access to X-Ray Images for the National Department of Health: Medical Bureau for Occupational Diseases. 2018-11-26 11:00 NDOH 31/ 2018- 2019
Manufacturing, supply and delivery of trousers field dress grey; trousers field dress saps guards black trousers field dress STF camouflage; trousers field dress PPS camouflage for a period of three (3) years: Division: Supply Chain Management. 2018-11-27 11:00 19/ 1/ 9/ 1/ 07TC (18)
Clanwilliam: Augsburg College: Entrance Road Repairs. 2018-11-20 11:00 S097/ 18
The upgrading of earthworks, layerworks and surfacing on main road P232: km 15.80 to km 22.60. 2018-11-23 11:00 ZNT 3647/ 17T
Manufacturing, supply and delivery of hat blue woman police for period of three (3) years in accordance with specification SAPS 313 Version 03.0/FEBRUARY: Division: Supply Chain Management. 2018-11-27 11:00 19/ 1/ 9/ 1/ 61TC (18)
Manufacturing, supply and delivery of gloves leather female W/P for a period of three (3) years in accordance with specification SAPS 319 Revised June 2008: Division: Supply Chain Management. 2018-11-27 11:00 19/ 1/ 9/ 1/ 51TC (18)
Manufacturing, supply and delivery of trousers summer wear for a period of three (3) years: Division: Supply Chain Management. 2018-11-27 11:00 19/ 1/ 9/ 1/ 13TC (18)
Manufacturing, supply and delivery of shoulder boards assembly of ranks chaplains men and women police and shoulder boards assembly of ranks blue men and women police in accordance with specification SAPS 32156/18 Version 01.0/JULY 2018 and SAPS 2079 Version 08.0/ JUNE 2018 for a period of three (3) years: Division: Supply Chain Management 2018-11-27 11:00 19/ 1/ 9/ 1/ 67TC(18)
Senekal Magistrate Offices: Construction of Facilities for People With Disabilities 2018-11-20 11:00 BL18/ 069
Manufacturing, supply and delivery of cap ceremonial and gold embroided designs for cap peaks and hats in accordance with specification SAPS 248 revised June 2010 and SAPS 244 Revised May 2010 for a period of three (3) years: Division: Supply Chain Management. 2018-11-27 11:00 19/ 1/ 9/ 1/ 50TC(18)

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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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