Functionality in Tenders

The Preferential Procurement Policy Framework Act of 2017 outlines the guidelines for how Government Entities should assess tenders. The accompanying Preferential Procurement Regulations of 2017 further detail how points should be awarded based on specific criteria such as B-BBEE and Price.

To improve the evaluation process, Government Entities have implemented a system called “Functionality” or “Technical Criteria.” This system ensures that Enterprises with the highest capabilities are assessed in accordance with the Preferential Procurement Regulations. This safeguard prevents Enterprises that lack the necessary skills but offer the lowest prices from winning tenders. The Private Sector has also adopted a similar, albeit slightly modified, system. For clarity, we will refer to both Government Entities and Private Sector Entities as Procuring Entities.

It is only fair that a Request for Quotation or Competitive Bid (Tenders) is granted to the Enterprise demonstrating the best capabilities. Otherwise, contracts awarded may not be fulfilled accurately, to specifications, or within the required timeframe.

An Enterprise’s capability to execute a Request for Quotation or Competitive Bid is gauged by its performance. This performance can be assessed through several criteria, including:

The first three criteria are straightforward and easily substantiated. However, the fourth criterion, Goods or Services delivery capacity, poses challenges for many Enterprises. Procuring Entities must ensure that when sourcing goods and/or services from an Enterprise, the delivery will be: