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.
Quotation for the appointment of two or more training service providers to facilitate, assess and moderate the accredited problem-solving and decision-making three-day course and portfolio of evidence of 20 learners per programme for the unit standard ID number 242817, NQF level 4, as and when required.Proof of accreditation for unit standard ID number 242817 must be provided. 2018-09-25 10:00 Q04-2018/19 RE-ADVERT
As and when supply and delivery of diesel to Umjantshi House, Shosholoza Meyl Junction, Gauteng Nerve Centre and PRASA House for a period of 12 month. 2018-09-25 10:00 RFQ/O8/09/06/2018
Supply and refurbishment of Sulzer pumps and spares at Kriel Power Station for a period of 3 years. 2018-10-04 10:00 MPGXC005314
Request for quotation for appointment of a principal agent to design and supervise access road repairs at the Sentech’s De Aar and Queenstown transmitter sites. 2018-09-26 12:00 SENT140918/Road-Cons
Supply & Delivery of Water & Sewer Pipes and Fittings (2year rates tender) 2018-10-04 10:00 PROC 10/2018
Proficiency testing. 2018-09-28 23:00 OLT1126042
Supply and delivery of various valves on an as and when required basis for a period of five (5) years. 2018-10-01 14:00 MAT00312
Service fire sprinkler system and hydrants. 2018-10-01 12:00 KZN/CRES/08/2018/015/Q
Re-advert: Appointment of registered insurance broker for short-term insurance portfolio for a period of three years. 2018-10-02 09:00 RLM/BTO/123/2017/18
Supply & Delivery of Materials for Water Connections to Drakenstein Municipality (2year rates tender) 2018-10-04 10:00 PROC 09/2018
Consultancy Services - Designing a Programme for Renewable Energy Development in African Island States (REAIS) 2018-10-19 15:00 AUC/IED/C/378
Supply & deliver thermal imager, hygrometer & clamp meter. 2018-10-01 15:00 PR 10286501
Supply and delivery of laboratory consumables for a period up to 30 June 2019 2018-09-27 10:00 CES 22/2018
For the supply and delivery of alcoholic beverages and non-alcoholic beverages to the Blue Train for a period of 12 months on an as and when required basis or once (the quantity stipulated is purchased). 2018-10-02 10:00 ERACES4660-27979
The provision of maintenance and support services for the train cab system back office system on the Transnet Freight Rail Coal line for a period of 3 years. 2018-10-02 10:00 ERAC OGS SG540-26849
Supply and delivery of semi rigid asphalt with conventional open graded asphalt (popcorn mix) to Maydon Wharf. 2018-10-02 10:00 CRAC DNR 27853
Pauper funerals for Drakenstein Municipal Area from 19 October 2018 till 30 June 2019 2018-09-27 10:00 DSC0019702
Provision of functional job evaluations and functional job match assessments for RSR related job grades. 2018-10-02 10:00 TE18-KLP-19B-05686
Provision of helicopter services on an as and when required basis for a period of 24 months. 2018-10-02 10:00 PTH/54515
Hire of hooklift truck, transportation from Paarl Transfer station to Wellington Landfill 2018-09-27 10:00 DIC0025410 (readvertise)

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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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