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.
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)
Request for Information on the appointment of a Principal Agent and Design authority for the proposed GOCC move from OR Tambo Airport and Airways Park to In-flight Services Building. 2018-10-02 11:00 RFI-GSM052/2018
Appointment of a Travel Management Company for the Ministry of Defence and Military Veterans. 2018-10-02 11:00 ESUS/2018/17
Appointment of Town Planner to attend to the land use rights applications of erf 15964, Paulus street, Paarl 2018-09-27 10:00 DCG0011622
Supply and Installation of new air conditioners at Salt River Relay rooms, Nokqubela, Stikland, Vlottenberg, Observatory and Koerberg Station. 2018-10-02 15:00 RFQ 165/2018
The University of South Africa invites tenders from suitably qualified service providers to provide the University with professional civil and structural engineering services for the Sunnyside development design and project management 2018-10-03 12:00 PT2018/17
As and when for plumbing at various stations in the Western Cape Region. 2018-10-02 15:00 RFQ 175/2018
Training: Accredited service providers to facilitate an accredited forklift refresher course. (Valid from 01 July 2018 till 30 June 2019) 2018-09-27 10:00 DCG0011616
Training: Accredited service providers to facilitate an accredited medium / high voltage cable jointing course NQF level 4. (Valid from 01 July 2018 till 30 June 2019). 2018-09-27 10:00 DCG0011586
Staff transportation of Transnet employees at Operations General Freight Business (OPS GFB) depot and 2279 depot for a period of 6 months (01 November 2018 – 30 April 2019). 2018-10-04 10:00 ERAC-EMU-27808-MM-109
Financial accounting support for 2018/19 financial year (Re-advert). 2018-10-04 11:00 MLM/FIN/03/2018/19
Training: Accredited service providers to facilitate an accredited truck mounted crance refresher course NQF level 3. (Valid from 01 July 2018 till 30 June 2019) 2018-09-27 10:00 DCG0011583
Design and Construction of Matipana to Madikand gravel to tar road. 2018-10-04 11:00 mlm/tech/04/2018/19
Supply and Delivery of Microbiological Air Sampler 2018-10-04 11:00 iThemba LABS – RFQ/2018/19:71
Supply & delivery of excellence awards certificate frames. (Valid till 31 January 2019). 2018-09-27 10:00 WEB 27: 2018/2019
Request for Expression of Interest for Panel of Experts - Hydro-Mechanical Expert 2018-10-15 15:00 5506
Supply & delivery of power marker tape 3M 1500 EMS (6m spacing) 305m. (Valid til 30 June 2019) 2018-09-27 10:00 WEB 26: 2018/2019
Accounting and audit services. 2018-09-26 08:00 7G‐40428

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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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