Issue Date: 
Tuesday, February 7, 2017

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.

The revision of the Preferential Procurement Regulations of 2011 was largely influenced by the need to empower certain categories (Small Medium and Micro Enterprises (SMME) also classified as EMEs or QSEs, Co-operatives, Township and Rural enterprises) through procurement. This was a product of social dialogue on the New Growth Path (NGP), wherein government and social partners signed a Local Procurement Accord on 31 October 2011. To this end, a commitment was made by government to leverage public procurement.

The revised regulations are also aligned to President Jacob Zuma's pronouncement in his 2015 State of the Nation Address, wherein he said, that government will set-aside 30% of appropriate categories of State procurement for purchasing from SMMEs or co-operatives as well as township and rural enterprises. Also, giving impetus/ incentive to the NGP. The highlights of the revision are:
 

  • Introducing the prequalification criteria, which allows the advancement of these selected categories of people, by limiting competition to only amongst themselves. This restricts the inclusion of well established companies, unless they meet further requirements of subcontracting to these groups, should they (established company) be successful. (Refer to regulation 4).
  • Acknowledging that in the main, that high value tenders in the region of R30 million and above have a tendency to be awarded to established companies, due to economies of scale and affordability, leaving out categories of aspiring businesses. The revised regulations require all those, with the ability to deliver the required service, to demonstrate the element of subcontracting to the categorised groups at a tendering stage. (Refer to regulation 9).
  • Addressing the outcry of the categorised groups, who felt that the threshold of R1 million is too insignificant for them to grow to a level of established companies. Current regulations have increased to R50 million. This now gives smaller companies a greater chance to compete in the economy, in a meaningful way. (Refer to 6 & 7)

Commenting on the release of the regulations, Minister Pravin Gordhan said that the regulations aim to use public procurement as a lever to promote socio-economic transformation, empowerment of small enterprises, rural and township enterprises, designated groups and the promotion of local industrial development. He said this is in line with the current dialogue on inclusive economic growth in South Africa.

To learn more about this and all the other new developments regarding tenders, please attend one of our How-to-Tender workshops. Tender Workshop dates are published on our website at www.how2tender.com. For more information on the tender courses please email Werner at werner@how2tender.com.

This article was written by Werner van Rooyen, Director of HowToTender (Pty) Ltd. which specializes in tender consulting and tender training.

Title Closing Date Tender No.
Information on Water Treatment System 2019-03-01 10:00 CORP 4647
Consulting engineering services for the routine road maintenance of national route N2 section 10 km 73.40 to section 11 km 71.74 and national route R75 section 1 km 0 to section 2 km 25.93 and national route R335 section 1 km 0 to km 30.12 2019-02-04 10:00 X.003-031-2019/1F
Panel of professional services (civil, building, mechanical, electrical and environmental) for a period of three (03) years 2019-02-08 12:00 T32/2018
The Replacement and Maintenance of Signages at O R Tambo International Airport (ORTIA) for A Period Of 60 Months 2019-01-31 11:00 COR5652/2018/RFP
Supply and Delivery of Stationery for SABC Offices at Auckland Park on an “as and when” Requiredd Basis, for a Period of Three (3) Years 2019-01-11 12:00 RFP/LOG/2018/19
Maintenance of Electricals and HVAC Controls Systems 2019-02-01 11:00 ORT5749/2018/RFP
Replacement of TVOB camera equipment. 2018-12-18 12:00 RFP/TVO/2018/76
Supply and Delivery of 10 X 290 2wd Sunroof 60 Kw Tractors for Zululand District Municipality 2018-12-19 12:00 ZDM 111/2018
An Enabling Agreement (EA) for Design, Supply, Delivery, Installation, Commissioning, Training, Support and Repairs of Operational Technology (OT) Voice and Regional Operational Voice Control System on an "as and when required" basis for a period of 5 (Five) years. 2019-02-07 10:00 CORP4640
Refurbish Fit and Install Lime Feeder Machine at Withoogte Purification Plant 2018-12-19 12:00 6/5/2/387
Eskom to conduct tests at the supplier's laboratory for determination of the current withstand of medium voltage overhead line hardware over period of three (3) years on an "as and when required" basis 2019-02-08 10:00 CORP 4609
Appointment of service provider to upgrade and installation of a security systems at Council for Geoscience Head Office. 2019-02-08 11:00 CGS-2018-041A
Request for proposal for pilot project for leak detection on Rand Water pipelines using satellite technology 2019-02-08 12:00 RFP00552/18
Compilation of the 2017/2018 MIG Annual Report 2018-12-20 12:00 RFQ/501
Request for proposal for development of economically viable solutions for the handling, disposal and reuse of water treatment residue at Rand Water 2019-02-08 12:00 RFP00553/18
Copper Tube 28mm Class 2, Sabs 460 2018-12-21 11:00 SQ12181326
Couplings 15 Mm X 20 Mm Reducing Male I.T.C. Cobra Or Q D-2rxs - Sans 10525/1 Approved. 2018-12-21 11:00 SQ12181326
Elbow 3/4" X 22mm X 90 Deg. Male I.T.C. D8xs (Sabs Approval Required On Coupling) 2018-12-21 11:00 SQ12181326
Developing, hosting and managing Black Umbrellas virtual incubation platform 2019-01-21 17:00 No reference supplied
Coupling 15 Mm Straight C.T.C. D-1xs (Sabs Approval Required On Coupling) -Sans 10525/1 Approved 2018-12-21 11:00 SQ12181326

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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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