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.
The appointment of service provider to implement the Animal and Veld Management Programme (AVMP) Soil Rehabilitation Project in Tot Hier Toe Land Reform Farm in The Heilbron Area in Ngwathe Local Municipality within Fezile Dabi District Municipality in the Free State Province. 2018-08-10 11:00 PSSC- RID- FS 0001 (2018/ 2019)
Appointment of the Service Provider to Render Travel Management Services for a period of 36 months 2018-08-14 11:00 IPID 03 - 18/ 19
Appointment of service providers to implement the Animal and Veld Management Programme (AVMP) Soil Rehabilitation Project in driekoppen & Seymour Land Reform farm in the Senekal area in Setsoto Local Municipality within Thabo Mofutsanyana District Municipality in the Free State Province. 2018-08-10 11:00 PSSC- RID- FS 0002 (2018/ 2019)
Polycarbonate soup bowls x 550 2018-07-30 11:00 ZNQ 136/ 2018/ 19
Appointment of a service provider to test and benchmark the performance and quality of services (QoS) for voice and data services for a period of six (06) months in four (04) provinces on an 80/20 PPPFA 2000, Preferential Procurement Regulation: 2017 2018-08-22 11:00 ICASA 03/ 2018
Appointment of a Service Provider for Comprehensive Hygiene Services for a period of three (3) years 2018-08-10 10:00 HSRC/ 12/ 2018/ 19
Consulting services for legal expert services to redraft the dispute settlement mechanism and establishment of its institutions – enhancing the single African Air Transport Efficiency 2018-08-03 15:00 AUC/IED/C/277
Appointment of service providers to implement the Animal and Veld Management Programme (AVMP) Soil Rehabilitation Project in Rietfontein Land Reform Farm in the Soutpan Area in Masilonyana Local Municipality within Lejweleputswa District Municipality in the Free State Province. 2018-08-10 10:00 PSSC- RID- FS 0004 (2018/ 2019)
Appointment of a panel of training providers 2018-08-13 11:00 GPAA 09/ 2018
Appointment of service providers to implement the Animal and Veld Management Programme (AVMP) Soil Rehabilitation project in Rietfontein Land Reform Farm in the Soutpan area in Masilonyana Local Municipality within Lejweleputswa District Municipality in the Free State province. 2018-08-10 11:00 PSSC- RID- FS 0003 (2018/ 2019)
Appointment of a Service Provider for the Provision of Traffic Contravention Management and Collection System, Back Office Support, Supply and Deployment of Traffic Law Enforcement Equipment in the Gauteng Province for a period of 60 months (05 years). 2018-08-10 11:00 GT/ GDCS/ 084/ 2018
Queenstown Magistrates Court: Provision of cleaning services for a period of twenty four (24) months. 2018-08-14 11:00 PEC11/ 2018
Double bed base set x7; 363l Combi fridge with water dispenser x14 2018-07-27 11:00 169/ 018/ 019
Panel of Service Providers for the Provision of Transportation Services to Gauteng Department of Community Safety for a Period of Twenty Four Months (2 Years). 2018-08-10 11:00 GT/ GDCS/ 085/ 2018
Service oil pots including change off oil x2 (see description for more items) 2018-07-30 11:00 ZNQ 258/ 18
Dimbaza Magistrates Court: Provision of cleaning services for a period of twenty four (24) months. 2018-08-14 11:00 PEC10/ 2018
Provision of Courier/Delivery Services to the Driving License Card Account (DLCA) for a period of twenty four (24) Months, at 459B Tsitsa Street, Erasmuskloof, 0105. 2018-08-10 11:00 DLCA/ 2018/ 02
Port Elizabeth: Gelvandale Magistrates Court: Provision of cleaning services for a period of twenty four (24) months. 2018-08-14 11:00 PEC09/ 2018
Department of Rural Development and Land Reform invites suitable service provider to supply, deliver and offload three (3) recycling Bailing Machines for Joe Gqabi recyclers at Senqu, Elundini and Water Sisulu Local Municipalities under Joe Gqabi District in the Eastern Cape Province 2018-08-13 11:00 DRDLR: EC 001(2018/ 2019)
Service threatre lights and repair if needed 2018-07-30 11:00 ZNQ 254/ 18

Pages

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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