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: Protective clothing 2018-11-19 10:00 GA11900431
Burglar Bars & Security Gate (Joodsekamp Fire Station) 2018-11-14 12:00 B325 /2018/19
Supply, Delivery and Installation of Electrical Fencing at the Klapmuts Multi-Purpose Centre. 2018-11-21 11:00 FQ/SM: 69/19
CCTV inspection of sewer infrastructure. 2018-12-12 10:30 JW 13524 RR
Supply, Delivery and Installation of Burgular Bars with a 100% Local Content at the Klapmuts Mpc and the Groendal Library. 2018-11-21 11:00 FQ/SM : 70/19
Catering of Health Volunteer Handover Ceremony Certificate in Knysna Municipality on the 16 November 2018 2018-11-14 12:00 B326/2018/19
Provision of a 100MBPS fibre layer 2 connectivity to Teraco 2018-11-20 11:00 FQ/SM: 67/19
Catering ward 40 senior citizens. 2018-11-19 12:00 SD11900283
Code: Learner and driver license training and testing for EPWP beneficiaries 2018-11-21 11:00 FQ/SM: 63/19
Disposal and cleaning of Bergzicht Formal Trading 2018-11-21 11:00 FQ/SM: 24/19
Knysna Municipality: Appointment of a Health and Safety Agent for electrification of various areas in the Greater Knysna from Nov 2018 to June 2019 2018-11-15 12:00 201/2018/19
Supply and delivery of concrete bollards 2018-11-21 11:00 FQ/SM: 54/19
Provision of Horticulture and Street Sweeping Services in the Port of Durban including the MSOE for a period of Thirty Six (36) Months. 2019-01-22 10:00 TNPA 719/CIDB
Appointing of Experienced Service Provider to Read Meters Remotely, Via Automated Meter Reading (AMR) System and Manage Metering Services for Large Power Users and Small Scale Embedded Generation Consumers. 2018-12-14 12:00 B/SM 28/19
Supply: Clothing 2018-11-19 10:00 GA11900433
Appointment of Service Providers for Various Training Programmes for a period until June 2021 2018-12-12 12:00 B/SM 24/19
Supply: Protective clothing 2018-11-19 10:00 GA11900434
Rehabilitation and Construction of Stormwater Outlet Structure in Kayamandi, Stellenbosch 2018-12-12 11:00 B/SM 06/19
Supply: 1 each x trans & roll kit m880 2018-11-14 11:00 GM1190371A
Supply: 8 activity unit x supply 316 stainless steel 1/4" ball valve 2018-11-16 15:00 GB11900321

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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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