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.
Request to renew the following corporate subscription services BMI, CEB (IT), EBSCO, LEXISNEXIS, SAFARI, SABINET, CEB (SCM), CIS, IFR,SABS, ISF, TOGAF, CWTL and IODSA. 2018-12-07 11:00 RFB 1809/ 2018
Terms of Reference to provide customised training to 200 community college practitioners 2018-12-11 11:00 SCMU: 20 - 2018/ 19
Terms of Reference for the development of learning materials. 2018-12-11 11:00 SCMU: 19 - 2018/ 19
Appointment of service provider for a fully managed Picture Archiving Communications Systems (PACS) including the installation, configuration, enhancement, support and maintenance for the Gauteng Department of Health (GDOH) for a period of five (5) years. 2018-12-07 11:00 RFB 1840- 2018
Terms of Reference for the procurement of office furniture for ETDP SETA Head Office and Provincial Offices 2018-12-12 11:00 SCMU: 24 - 2018/ 19
Terms of Reference to appoint a panel of legal service providers 2018-12-11 11:00 SCMU: 22 - 2018/ 19
Appointment of a service provider for the provision of the SITA Micro Organisation Placement & Migration Management Services required to migrate employees to the new micro structure. 2018-12-10 11:00 RFB 1839/ 2018
Provision of Crisis Communication Management Services to Dube TradePort Corporation for a period of three (3) years 2018-12-10 11:00 DTP/ RFP/ 23/ MKT/ 08/ 2018
Appointment of a Service Provider to Assist the Department of Transport to Update the National Freight Databank. 2018-12-07 11:00 DOT/ 12/ 2018/ ITP
Appointment of a Service Provider for the Development of the Road Freight Strategy Integrated Implemetation Plan 2018-12-07 11:00 DOT/ 14/ 2018/ ITP
Appointment of a Service Provider to Conduct a Risk Management Audit From Date Of Award Until 31 March 2019. 2018-11-30 11:00 FMA 0004- 2018/ 19
Appointment of a Service Provider to Identify and Map All Fallow and Active Lands in South Africa within a Period of 5 Months. 2018-11-29 11:00 5/ 2/ 2/ 1- RDLR 0046(2018/ 2019)
Appointment of a Service Provider to Provide Operational and Compliance Audit Projects at the Department of Rural Development and Land Reform, for Two Audit Projects as per the 2018/2019 Annual Internal Audit Plan 2018-12-06 11:00 5/ 2/ 2/ 1- RDLR 0047(2018/ 2019)
Appointment of a Service Provider to Perform an External Quality Assessment Review for the Department of Rural Development and Land Reform, Chief Directorate: Internal Audit for the Period of 15 Days. 2018-11-29 11:00 5/ 2/ 2/ 1- RDLR 0050 2018/ 2019)
Appointment of a Service Provider to Manage the Land Rights Management Facility Established to Provide Legal and Mediation Services to Labour Tenants, Farm Dwellers, Communal Property Institutions, Restitution Claimants and Other Land Reform Beneficiaries in Nine Provinces for the period of three years 2018-11-29 11:00 5/ 2/ 2/ 1- RDLR 0051 (2018/ 2019)
Appointment of a Professional Service Provider In Consortium/ Multi-Disciplinary Consisting of :Architectural Services, Civil and Structural Engineering Services, Mechanical and Electrical Engineering Services and Quantity Surveying Services to Provide Project Management, Design and Construction Supervision for The Construction of Ga-Kgatla (Papola) Feedmill Situated In Blouberg Local Municipality Within The Capricorn District Municipality In Limpopo Province 2018-11-29 11:00 5/ 2/ 2/ 1- CRDP- 0004 (2018/ 2019)
Appointment of a Professional Service Provider In Consortium/ Multi-Disciplinary Consisting of :Architectural Services, Civil And Structural Engineering Services, Mechanical and Electrical Engineering Services And Quantity Surveying Services To Provide Project Management, Design and Construction Supervision for the Construction of a Community Hall at Nwamatatani Village Located In Collins Chabane Local Municipality Within Vhembe District of The Limpopo Province. 2018-11-29 11:00 5/ 2/ 2/ 1- CRDP- 0005 (2018/ 2019)
Appointment of a Professional Service Provider In Consortium/ Multi-Disciplinary Consisting of : Project Management Services, Civil And Structural Engineering Services, Quantity Surveying Services, Architectural Services, Mechanical and Electrical Engineering Services, Town and Regional Planning Services, Land Surveying Services, Agricultural Engineering Services, Environmental Practitioner Services, Construction Health And Safety Services and Geohydrology Services For The Project: The Establishment of Technical Support Unit For The Rural Infrastructure Development Directorate: Limpopo Provincial Shared Service Centre Of The Department Of Rural Development And Land Reform To Provide Project Management, Planning, Feasibility And Detail Design; And Cost Estimation For Build Environment Professional Services And Advisory Services For A Period Of Two (2) Years. 2018-12-07 11:00 5/ 2/ 2/ 1- CRDP- 0003 (2018/ 2019)
Department of Education: eThekwini Region: Amatshezulu High School: Hammarsdale: Water and Sanitation Programme Phase 3 2018-12-18 11:00 ZNTD 03835W
Department of Education: eThekwini Region: Mankayiyana Primary School: KwaDukuza: Water and Sanitation Programme Phase 3 2018-12-18 11:00 ZNTD 03869W

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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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