Procurement Regulations | Page 8 |

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:


Title Closing Date Tender No.
Industrial belt drive compressor for dental chairs including installation as per specification 2018-05-25 11:00 ZNQ 09/ 18- 19
Service air conditioning (package unit). 2018-06-08 11:00 ZNQ 11/ 18- 19
Appointment of a Service Provider to Deliver Dense Seismic Array for Subsurface Fracture Mapping and Reservoir Modelling 2018-06-18 11:00 CGS- 2018- 005A
Ride on grass cutter 2018-05-29 11:00 ben01/ 2018- 2019
Appointment of a Service Provider to Provide Office Lease Space on a Lease Agreement for the CCMA Welkom Office for a period of five (5) years. 2018-06-08 11:00 CCMA/ 2018/ 07- WELK
Supply water treatment chemicals and routine testing of boiler plant heating and cooling systems. (12 months contract) 2018-05-31 11:00 03/ 2018/ 19
Servicing of air handling units (air conditioning chiller plant 100kW+) 2018-06-08 11:00 ZNQ15/ 18- 19
Appointment of a Service Provider to Provide Office Lease Space on a Lease Agreement for the CCMA Mbombela Office for a period of five (5) years 2018-06-08 11:00 CCMA/ 2018/ 05- MPU
Infrared Testing/Thermal Imaging. 2018-06-08 11:00 ZNQ 12/ 18- 19
Appointment of a Service Provider to Provide Office Lease Space on a Lease Agreement for the CCMA Tzaneen Office for a period of five (5) years. 2018-06-08 11:00 CCMA/ 2018/ 06- LIMP
Repairs to medical oxygen gas bank plant as well as oxygen points 2018-05-25 11:00 ZNQ25/ 18/ 19
Servicing of Generator Set. 2018-06-08 10:00 ZNQ14/ 18- 19
Fuel remediation, clean and test diesel fuel. 2018-06-08 11:00 ZNQ 16/ 18- 19
Request for Proposals for Appointment of Developer and Operator for Vulindlela Retail Centre in Port Elizabeth 2018-06-25 12:00 CDC/ 228/ 18
Appointment of a service provider for the refurbishment of the fire detection and voice evacuation installations at the South African State Theatre. 2018-06-15 11:00 SAST2018 Fire detection services
Supply and Deliver Washing Powder SABS / SANS (Detergent, Laundry, Industrial Powder) = 350 x 25kg Bags 2018-05-25 11:00 ZNQ0100/ 18/ 19
Appointment of a Service Provider for Print and Online Subscription of Newspapers Nationwide 2018-06-22 11:00 RFP 32/ 2018
C1089: Periodic Maintenance of TR31/01 (KM 13.58 - KM 45.02), TR 31/02 (KM 2.16 - KM 15.68) and Mr 287 (KM 2.69 - KM 14.50) Worcester to Robertson to Ashton. 2018-06-21 11:00 S033/ 18
Supply Lexmark Toner X651 H31e High Yield original only as per specification 2018-05-28 11:00 ZNQ 1286/ 17- 18
C1091: Periodic maintenance of TR32/01 from Ashton (KM 0.00) to Leeuwrivier (KM 31.20), MR287 from Bonnievale (KM 32.00) to MR288 (KM 45.31) and MR288 from Jan Harmsgat (KM 0.00) to Bonnievale (KM 6.00)). 2018-06-21 11:00 S032/ 18


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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