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:

Pages

Title Closing Date Tender No.
Modification to primary hatchery including: - Servicing and program change to Siemens control panel, where the program needs to be changed to accommodate communication with the current Campbell system; control of required infra-red heating system, and direct on-off switches of system components. - Installation of infra-red heater lamps mounted in vertical retractable water proof sockets above primary hatchery tanks, for water temperature control. Heater lamps to be controlled by the Siemens control panel. 2018-07-27 11:00 RFQ 000252
Completion of Pholela Special School in Harry Gwala District 2018-08-13 12:00 CDC/ 323/ 18
Supply, deliver and install current Occupational Health and Safety Act No. 85 of 1993 poster must be a land scape page layout laminated and framed with stainless steel frame has hooks for hanging at the centre and must be written in black with a visibility of 2 meters. the poster must meet Department of Labour specification x 07 unit as per attached specification. 2018-08-02 11:00 118/ 2018/ 2019NSI
Appointment of a Construction Service Provider (Sp) to Undertake the Maintenance and Repairs of Existing Facilities at Roodeplaat Youth Centre (Ryc) 2018-08-10 11:00 GT/ GDARD/ 097/ 2018
Support and maintenance of The C-BRTA permit management system. 2018-08-16 14:00 CBRTA/ HO/ 0050
Supply, deliver and install current basic conditions of Employment summary Act poster must be a land scape page layout laminated and framed with stainless steel frame has hooks for hanging at the centre and must be written in black with a visibility of 2 meters. the poster must meet Department of Labour specification x 07 unit as per attached complete specification. 2018-08-02 11:00 116/ 2018/ 2019NSI
Appointment of a Construction Service Provider (Sp) to Undertake the Maintenance and Repairs of Existing Facilities at Leeufontein Provincial Nature Reserve 2018-08-10 11:00 GT/ GDARD/ 100/ 2018
Innovation Hub Management Company (SOC) invites potential services providers to submit bids for Event Management Services for the GAP Awards 2018-08-14 11:00 TIH/ 2018/ 04
Appointment of a Supplier for the Processing and Distribution of SAPS Salary Advices for a period of 3 years 2018-08-10 11:00 RFB 1766/ 2018
Socio-Economic Impact Assessment 2018-08-15 11:00 CBRTA/ HO/ 0048
Lease of vehicles for a period of 36 months. 2018-08-10 14:00 CBRTA/ HO/ 0041
Supply of Remote Environmental Management Solution to SITA for all NGN Data centres for period of three years. 2018-08-10 11:00 RFB 1771/ 2018
Supply, deliver and install current Employment Equity Act Summary poster must be a land scape page layout laminated and framed with stainless steel frame has hooks for hanging at the centre and must be written in black with a visibility of 2 meters. the poster must meet Department of Labour specification x 07 unit as per attached specification. 2018-08-02 11:00 117/ 2018/ 2019NSI
Appointment of a service provider for the investigation and grouting of a fracture in the Modderbee area for the Council for Geoscience. 2018-08-20 11:00 CGS- 2018- 023L
Appointment of a service provider to manage international investor for perception research study for Brand South Africa for the period of three (3) years. 2018-08-20 11:00 BRAND SOUTH AFRICA/ 002/ 2018
Provision of IP Telephone Solution to the Northern Cape (NC) Department of Environmental and Nature Conservation (DENC) with Maintenance and Support for a period of sixty (60) months 2018-08-10 11:00 RFB 1767/ 2018
Clear plastic bags - size: 30 x 45cm (30 micron); pack size: 250 per pack x 100 packs 2018-07-30 11:00 ZNQ 92/ 2018/ 19
The BANKSETA is seeking to appoint a suitably qualified service provider/s who is/are located in South Africa to provide training services for learnership initiative, namely Kuyasa. 2018-08-21 10:00 BS/ 2018/ RFB406
Dispensing labels (clinic card) - 70 x 49mm (no lip, no border) x 200 reams, 18 per A4 sheet 2018-07-30 11:00 ZNQ 91/ 2018/ 19
Sasria SOC Limited hereby invites proposals from suitably qualified companies to provide Change Management Services to the company 2018-08-22 12:00 2018/ 06

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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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