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.
Manufacture and Supply of (02) two (12m) Riverine Patrol Boats with Trailers 2018-04-10 11:00 SPSC- B- 041- 2017
Manufacture and Supply of (01) one, (18.5m long) 130 Passenger Ferry Boat 2018-04-09 11:00 SPSC- B- 042- 2017
Conversion of the World War II Generator Building on the Blaauwberg Hill into an interpretive centre. 2018-02-28 09:00 SP11800107
Supply, installation and commissioning of an overhead travelling crane, complete with all ancillary equipment and associated works as per specification 2018-03-27 11:00 SPSC- B- 045- 2017
Supply Anti-biofilm wound bed preparation gel with Betaine & Polyhexadine 50g (boxes/20) 2018-02-23 11:00 ZNQ 321 / 17- 18
Supply Anti-bacterial Foam soap 1 litre - to fit Kimberly Clark dispenser 2018-02-23 11:00 ZNQ 322 / 17- 18
Rental of a new hyster machine for specifications and special conditions are attached on the tender document. 2018-02-23 11:00 ZNQ 25/ 05/ 2017
Replacement of existing damaged outer perimeter wire fence at Signal School, Simon’s Town 2018-03-22 11:00 SPSC- B- 046- 2017
Laparoscopic port kit comprising of: Laparoscopic port kit comprising of: 1x12mm optical bladeless tip trocar and stability sleeve, 12mm diameter 100mm length, 1 x stability sleeve only 12mm diameter and 100mm length and (see description for more details) 2018-02-27 11:00 ZNQ NO.4734/ 01/ 18
Surgical visors- sv2000 half face visors with sponge and elastic to go across forehead with opening holes for either side. 2018-02-27 11:00 ZNQ NO.4736/ 01/ 18
Single step locking pigtail drain 25cm 0.38 / 14fr. 2018-02-27 11:00 ZNQ NO.4658/ 01/ 18
Monocryl 3/0 rc (poliglecaprone) PS -2, 19mm, 3/8 circle cutting needle undyed 45cm 2018-02-27 11:00 ZNQ NO.4713/ 01/ 18
Urine meter must have a spout and safe guard and needleless sampling port. 2018-02-27 11:00 ZNQ NO.4644/ 01/ 18
Closed suction system, single lumen, endotracheal catether with rounded atraumatic tip, size 12. “45mm, (see description for more details) 2018-02-27 11:00 ZNQ NO.4642/ 01/ 18
Closed suction system, single lumen, endotracheal catether with rounded atraumatic tip , size 10. “3.3mm, (see description for details) 2018-02-27 11:00 ZNQ NO.4641/ 01/ 18
Mobiderm pad (5x5mm ) size of pad 27cm x 1m-Quantity:1unit; Mobiderm pad (15x15mm) size of pad 27cm x 1m-Quantity:1unit; Morbiderm bandage (15x15mm) size of pad / bandage 10cm x 3m 2018-02-27 11:00 ZNQ NO.3335/ 10/ 17
Waterless hand cleaner PH 7-8 25kg (SABS approved). 2018-02-27 11:00 ZNQ NO.4417/ 01/ 18
Rendering of a Specialised Hospital Laundry Service at 2 Military Hospital, Wynberg for a period of 30 months. 2018-03-13 11:00 SPSC- B- 040- 2017
Steel & rubber solid wheels castor 50mm tente non marking swivel with round expanding bushes 19-21,5mm dia 2018-02-27 11:00 ZNQ NO.4407/ 01/ 18
Supply and delivery of cloth polyester cotton PPS camouflage and cloth polyester cotton camouflage STF for a period of three (3) years 2018-03-08 11:00 19/ 1/ 9/ 1/ 159TC (17)

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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