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.
Supply and Deliver of Custon Rescue Paddle Board 2018-12-14 11:00 GQ12182004
Tenders are invited for the maintenance of ABB SCADA SYSTEM 2018-12-14 11:00 CSQ12181503
Rental of landfill compactor for December 2018 and January 2019 2018-12-18 11:00 345678
Advertisement for suitable Suppliers and Service Providers to apply and become part of Save the Children South Africa’s Supplier Database 2019-02-15 12:00 No reference number
Supply & deliver Decalit Chokes Oglis 0.5,100watt,B80 230volt for 1000watt High Pressure Fittings 2018-12-14 11:00 SQ11181321
Demolition of Redundant Structures Citywide 2019-02-08 10:00 196Q/2018/19
Supply & deliver Liquefied Petroleum Gas in 9kg cylinders,to S.A.B.S 690 specifications 2018-12-14 11:00 SQ11181321
Supply & deliver Boxes With Lids 455 L X 340 W X 290mm H Doubled Walled on sides with handles 2018-12-14 11:00 SQ11181321
Supply & deliver Envelopes Manilla With Window Face 220mm x 110mm. Straight flap cut type KE.80/100gm. 2018-12-14 11:00 SQ11181321
First Line Response- Distribution Area East, North and South 2019-02-08 10:00 192S/2018/19
Term Tender for Supply, Installation and Retrofitting of Water Efficient Technologies Citywide 2019-02-11 10:00 197Q/2018/19
Supply & deliver Truck Tyres 12R22.5 2018-12-13 11:00 SQ12181325
Supply & deliver Couplings Rubber DISC F-60 tyre 2018-12-13 11:00 SQ12181325
Supply & deliver Pipe,Coil Safe 15mm X 50mtr 2018-12-13 11:00 SQ11181312
Supply & deliver Electrical Spring Connectors Part no. 200665 Blue & Grey connectors.Scotc hlok 3M or approved equal 2018-12-13 11:00 SQ11181312
Tenders are Invited for the Servicing and Issue of Safe Lift Certificate for 19 Vehicle Lift Hoist 2018-12-14 11:00 CSQ12181507
Supply and delivery of heavy duty mobile vehicle 55 metre aerial firefighting/rescue turntable ladder for the fire and rescue services 2019-02-11 10:00 204G/2018/19
Supply and delivery of various articles of human protective clothing for use in structural fires by the fire and rescue service 2019-02-11 10:00 202G/2018/19
The supply of aerial support to the fire and rescue service during high fire season 2019-02-12 10:00 207G/2018/19
Supply and delivery of various firefighting foam concentrate for the City of Cape Town 2019-02-12 10:00 205G/2018/19

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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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