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.
Supply, Delivery, Installation and Configuration of Firewall and Switches on an outright purchase or rental basis (Managed) and maintenance thereof for a period of 12 months with the option to renew 2018-12-10 11:00 RFP/ SASSETA/ 201819130
Provision of Telecommunication and Internet Services for a period of 12 Months with the option to renew 2018-12-10 11:00 RFP/ SASSETA/ 201819125
Appointment of a service provider for the evaluation, due diligence and monitoring of Discretionary Grants until 31st March 2019 2018-12-10 10:00 RFP/ SASSETA/ 201819127/ 1
The rendering, manufacturing, repairing, fitting and supplying of aids for orthotic and prosthetic services to institutions in the Eden and Central Karoo District under Western Cape Government the Department of Health for a three year period 2018-12-07 11:00 WCGHCC031/ 1/ 2018
Appointment of a Service Provider to Facilitate Organisational Design and Related Services for RTMC. 2018-12-10 11:00 RTMC BID 19/ 2018/ 19
George: District Office: CBD : New Lease Office Accommodation For SASSA: Eden Karoo: 500m2, 10 Undercover Parking Bays for a 3 year lease period - Category - C 2018-11-28 11:00 CPTL27 / 18
Appointment of a Service Provider to Provide Online Banking Gateway Platform to the RTMC for a period of five years. 2018-12-07 11:00 RTMC BID 20/ 2018/ 19
George: Local Office: CBD: New Lease Office Accommodation For Dept of Rural Development & Land Reform: Eden Karoo: 1847.76m2, Secured parkingparking bays for GG vehicles, 2 Dedicated parking bays for persons with disabilities, 2 Parking bays for SMS, 20 Parking for private vehicles for staff & 6 safe parking bays for visitors & departmental customers for a 5 years lease period - Category - A, B,& D 2018-11-28 11:00 CPTL29 / 18
The RAF hereby invites service provider for Management and Administration of Fraud Hotline and Awareness for a period of five (5) years 2018-12-14 11:00 RAF 2018/ 00053
George : Local Office : CBD : New Lease Office Accommodation For SASSA: Eden Karoo: 778.75m2, 8 Lockup garages, 2 open parking bays & 5 visitors parking bays for a 5 years lease period - Category - A, B,& D 2018-11-28 11:00 CPTL28 / 18
TOR Research to Assess the Financial Feasibity of a Basic Income Grant 2018-12-19 10:00 Nedlac 2018/ 19/ 03
Repairs and upholstery of chairs, 29 chairs 2018-11-23 11:00 ZNQ 61/ 08/ 2018
Impact of the National Social Security Fund (NSSF) on Saving and Investment Markets 2018-12-19 14:00 Nedlac 2018/ 19/ 02
Compacting and disposal of forfeited and boarded saps vehicles to the South African Police Service: Nationally for a period of three (03) years 2018-12-14 11:00 19/ 1/ 9/ 1/ 68TV(18)
Voice, Data and Managed IT Services 2018-12-14 11:00 Nedlac 2018/ 19/ 04
Contract for the removal of wet waste (pigswill) from SAS Saldanha, West Coast for a period of two (2) years. Evaluation 80/20 principle. Validity period 120 days. 2018-12-11 11:00 SPSC- B- 051- 2018
The National Consumer Tribunal seek to appoint a software developer resource to assist with ongoing programming, database and technical support to the in-house developed NCT Case Management System (CMS). 2018-12-14 15:00 NCT- 4/ 3/ 2/ 31
Appointment of a service provider for the provision of Information Technology Disaster Recovery Solution for the Mine Health and Safety Council for the period of 24 months 2018-12-14 11:00 MHSC014/ 2018- 19
Appointment of a service provider for office cleaning services, supply and install hygiene equipments and consumables for the period of 36 months 2018-12-14 11:00 MHSC011/ 2018- 19
The objective of this bid is to appoint and contract accredited Training Providers who have valid approved programme to deliver W&R Informal Small Business Practice NQF Level 3 qualification. The contracted Training Providers will each receive an allocation of the approved 500 unemployed learners who reside within identified rural areas of South Africa. 2018-12-07 11:00 RDO/ 2018/ 0013

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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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