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.
Construction Of Mkhuhlu And Mthonjeni Streets. 2018-08-27 11:00 161A/2017
Request for proposals for the long term lease and development of Erf 658 Yeoville 2018-11-30 10:30 RFP 56/2018
Request for proposals for the long term lease and development of Erf 383 Yeovile. 2018-11-30 10:30 RFP 55/2018
Request for proposals for the long term lease and development of Erven 43,44,91 and 92 Yeoville. 2018-11-30 10:30 RFP 54/2018
Request for proposals for the long term lease and development of Erven 139,140,142,144 and 147 Fairview. 2018-11-30 10:30 RFP 53/2018
Request for proposals for the long term lease and development of Erven 149,153,155,157,158 and 159 Fairview. 2018-11-30 10:30 RFP 52/2018
Request for proposals for the long term lease and development of Erven 105, 106, 109, 110, 111 and 112 Fairview. 2018-11-30 10:30 RFP 51/2018
Request for proposals for the long term lease and development of Erven 76,79 and 80 Wolhuter. 2018-11-30 10:30 RFP 50/2018
Request for proposals for the long term lease and development of Portion 1 and 2 of the Erf 89 Fairview and 87 Fairview . 2018-11-30 10:30 RFP 49/2018
Request for proposals for the long term lease and development of the Remainder of Portion 260 of the Farm Dorrnfontein 92 IR. 2018-11-30 10:30 RFP 48/2018
Request for proposals for the long term lease and development of Erven 3545,3546,3547,3548,3549,3550 and 3551 Johhanesburg. 2018-11-30 10:30 RFP 47/2018
Request for proposals for the long term lease and development of Erven 495-501 and 516 Vrededorp 2018-11-30 10:30 RFP 46/2018
Request for proposals for the long term lease and development of Erven 490 and 492 Vrededorp. 2018-11-30 10:30 RFP 45/2018
Request for proposals for the long term lease and development of Erven 235-240 Vrededorp. 2018-11-30 10:30 RFP 44/2018
Request for proposals for the long term lease and development of Erven 225 and 226 Vrededorp. 2018-11-30 10:30 RFP 43/2018
Request for proposals for the long term lease and development of Erven 381, 396-399 and 401 Vrededorp. 2018-11-30 10:30 RFP 42/2018
Request for proposals for the long term lease and development of Erf 351 and 366 Vrededorp. 2018-11-30 10:30 RFP 41/2018
Request for proposals for the long term lease and development of Erven 132 and 148 Vrededorp. 2018-11-30 10:30 RFP 40/2018
Request for proposals for the long term lease and development of Erven 97, 98,113 and 114 Vrededorp. 2018-11-30 10:30 RFP 39/2018
Request for proposals for the long term lease and development of Erven 39,51 and 54 Vrededorp 2018-11-30 10:30 RFP 38/2018

Pages

7 Disadvantages of Competitive Bidding

The bidding process can be very tedious sometimes. Here are some of the disadvantages of the bidding process.

1.    Leading suppliers may not tender

In Australia, for example, government procurement guidelines only allow suppliers who actually tender to be considered for a procurement decision. If the leading supplier or suppliers do not tender, the purchaser can only consider bids from suppliers who do tender. If leading suppliers are not considered, the purchaser may end up buying inferior product or service... Read More

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