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.
Appointment of a service provider to host and provide support for milestone portal for the period of 24 months. 2018-12-14 11:00 MHSC012/ 2018- 19
Appointment of a panel of attorneys for the Mine Health and Safety Council for the period of 36 months. 2018-12-14 11:00 MHSC013/ 2018- 19
Appointment of a service provider to render translation services to the MHSC for a period of 36 months 2018-12-14 11:00 MHSC010/ 2018- 19
Appointment of a service provider to provide a fibre internet link connectivity 2 x 50 MB 1:1 contention ratio with two different pops for seamless redundancy for a period of 24 months. 2018-12-14 11:00 MHSC009/ 2018- 19
Appointment of a service provider for the supply of 32 laptops for the Mine Health and Safety Council for the period of 6 months 2018-12-14 11:00 MHSC015/ 2018- 19
Provision of Medical Aid Brokerage Services for a period of (3) three years 2019-01-07 11:00 54/ 2018
The background of this project is to up skill 220 18.2. (Unemployed) Members from 20 Cooperatives nationally on several W&RSETA Skills Programmes 2018-12-07 11:00 RDO/ 2018/ 0014
The aim of the project is to train 100 NGOs/ NPOs that reside within the W&R sector on any skills development initiatives in order to enable them to operate more effectively and efficiently in their respective areas of work. 2018-12-07 11:00 RDO/ 2018/ 0012
Suitable Service Providers Are Hereby Invited to Bid for the Appointment of the Service Provider to Render Services of Incubation Project Manager for the Incubation Programme for the period of 36 months 2018-12-07 11:00 KZNFC- T38/ 2018/ 19
The objective of this bid is to enter into a contract with a Travel Management Company to manage all travel, accommodation, car hire and conferencing services. 2018-12-07 11:00 SCM/ 2018/ 0011
Appointment of a Service Provider to Develop Learning Materials and Assessment Tools for Occupational Qualifications 2018-12-10 11:00 ETQA/ 2018/ 09
The objective of this bid is to appoint a service provider to assist the W&RSETA with courier services for a period until 31 March 2020. 2018-12-07 11:00 SCM/ 2018/ 0012
The objective of this bid is to procure offices for the W&RSETA six (6) Regional Offices. 2018-12-07 11:00 SCM/ 2018/ 0013
Travel and Accommodation Services at Government Pensions Administration Agency. 2018-12-12 11:00 GPAA 13/ 2018
Provide Legal Services for the Government Pensions Administration Agency 2018-12-10 11:00 GPAA 12/ 2018
Website Design & Hosting Intranet 2018-12-14 11:00 WCNCB 01/ 11/ 2018
Appointment of a service provider to develop and test the performance of the business continuity management system for the SHRA in accordance with ISO 22301 standards 2018-12-07 11:00 SHRA/ RFB/ ADMIN/ 10/ 201819
Terms of Reference for the appointment of an accredited service provider for the implementation of Learnerships and Skills Programme for the ETDP SETA 2018-12-10 11:00 SCMU: 23 - 2018/ 19
Terms of Reference for training providers to offer the ETDP SETA Skiils Programme Teaching with Technology 2018-12-11 11:00 SCMU: 21 - 2018/ 19
Terms of Reference for the appointment of an accredited service provider for the implementation of Learnerships and Skills Programme for the ETDP SETA 2018-12-10 11:00 SCMU: 18 - 2018/ 19

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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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