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 delivery of heavy duty mobile 4x4 firefighting/ rescue vehicles 2019-02-12 10:00 206G/2018/19
NC065 - Hantam Local Office Accommodation 2019-01-18 11:00 IEC/ NC- 04/ 2018
DCS: Westville Correctional Service: Installation of Facilities for People with Disabilities 2019-02-19 11:00 DBN18/ 11/ 09
South African Police Service: Ladysmith 8 Mill Street: Rehabilitation of Existing Facilities 2019-02-05 11:00 DBN18/ 11/ 05
Justice Hlabisa Magistrate Court: Various Building Repairs 2019-02-06 11:00 DBN18/ 11/ 06
Pretoria: Service, Repairs and Maintenance of Fire Prevention Equipment (Portable Fire Extinguishers, Fire Hose Reels and Fire Hydrants) in Area 3 in Pretoria for period of 24 months 2019-02-05 11:00 PT18/ 065
Pretoria: Service, Repairs and Maintenance of Fire Prevention Equipment (Portable Fire Extinguishers, Fire Hose Reels and Fire Hydrants) in Area 1 Pretoria for period of 24 months 2019-02-05 11:00 PT18/ 062
Pretoria: Service, Repairs and Maintenance of Fire Prevention Equipment (Portable Fire Extinguishers, Fire Hose Reels and Fire Hydrants) in Area 4 Pretoria for period of 24 months 2019-02-05 11:00 PT18/ 064
Pretoria: Service, Repairs and Maintenance of Fire Prevention Equipment (Portable Fire Extinguishers, Fire Hose Reels and Fire Hydrants) in Area 2 Pretoria for period of 24 months 2019-02-05 11:00 PT18/ 063
Southern Corridor Phase 1: Penhill Development Project (Phase 1B) 2019-02-15 11:00 HSC 10/ 2018/ 2019
Southern Corridor Phase 1: Penhill Development Project (Phase 1C) 2019-02-15 11:00 HSC 11/ 2018/ 2019
Appointment of Architect: Renovations to M Block : RK Khan’s 2019-01-23 11:00 ZNB 5756/ 2018- H
Appointment of Quality Surveyor: Renovations to M Block: R K KHan’s 2019-01-23 11:00 ZNB 5753/ 2018- H
The South African National Roads Agency SOC Limited (SANRAL) invites tenders for the provision of Consulting Engineering Services for the Routine Road Maintenance of National Route 8 Sections 6 from from Groblershoop to Rooisand and National Route 10 Sections 8 to 11 from Omdraai to Boegoeberg. 2019-01-28 14:00 X.005- 029- 2019/ 1F
The South African National Roads Agency SOC Limited (SANRAL) invites tenders for the provision of Consulting Engineering Services for the Routine Road Maintenance of National Route 2 sections 5 to 7 from Riet Kuil Outspan to Rondeheuwel. 2019-01-28 14:00 N.002- 057- 2019/ 1F
The South African National Roads Agency SOC Limited (SANRAL) invites tenders for the provision of Consulting Engineering Services for the Routine Road Maintenance of National Route 10 sections 5 to 8 from Kopieskraal to Omdraai Vlei. 2019-01-28 14:00 N.010- 058- 2019/ 1F
The appointment of the service provider to assist the Waste Bureau with the identification and securing of site, development of a business plan, and management of the setting-up; equipping; operating; training of beneficiaries and handover of the Pilot Construction and Demolition Waste Crushing and Block Manufacturing Facility 2018-12-14 11:00 E 1490
The South African National Roads Agency SOC Limited (SANRAL) invites tenders for the provision of Consulting Engineering Services for the Routine Road Maintenance of National Route 12 sections 7 to 9 from Pretorius Baken to Klipdrift. 2019-01-28 14:00 N.012- 079- 2019/ 1F
The South African National Roads Agency SOC Limited (SANRAL) invites tenders for the provision of Consulting Engineering Services for the Routine Road Maintenance of National Route 8 Sections 8 &9 from Vaal River to NC/FS Border, National Route 12 Sections 9 to 11 from Riet River to NC/NW Border and National Route 18 Section 1 from Warrenton to NC/NW Border. 2019-01-28 14:00 X.005- 030- 2019/ 1F
Appointment of a service provider for BPM Solution for South African Tourism 2019-01-07 12:00 SAT137/ 18

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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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