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.

Government Entities have developed a system called “Functionality” or “Technical Criteria” to enhance the system and to ensure that the Enterprises with the best ability are evaluated according to the Preferential Procurement Regulations.  This is a safety measure built into the system to keep the Enterprises with no ability but with the lowest price out from winning a tender.  Private Sector Entities have, although slightly modified, also adopted the same system.  For a better understanding, we will name Government Entities and Private Sector Entities one as Procuring Entities.

It is just fair that a Request for Quotation or Competitive Bid (Tenders) is awarded to the Enterprise with the best ability. Otherwise, no contract awarded will be executed correctly, according to specifications and on time.

An Enterprise’s ability to execute a Request for Quotation or Competitive Bid is measured through its ability to perform.  This ability to perform can be measured in many ways of which the following are common:

• Human Resources.
• Financial Resources; and
• Goods or Services delivery capability.

The first three is easy to understand and easy to proof. It is the fourth item, Goods or Services delivery capacity that many Enterprises struggle with.  Procuring Entities must ensure that when procuring goods and/or services from an Enterprise that it will be done:

•  Correctly as per specifications, and this can only be proofed if an Enterprise has the necessary infrastructure to deliver the goods and/or services required.