Issue Date: 
Thursday, October 31, 2019

Preferential Procurement Regulations 2017

By Werner van Rooyen, Director of HowToTender (Pty) Ltd which specializes in tender consulting and tender training.

The Preferential Procurement Regulations 2017 have been finalized and gazetted on 20 January 2017.

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 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 tend 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 many other tender conditions attend our “Become a Tender Expert” 2-Day workshops presented in Johannesburg, Pretoria, Durban, Port Elizabeth, and Cape Town.  Book and pay online at https://howtotender.co.za/tender-expert-form/

Contact us at wernervr@howtotender.co.za should you require more information.

You can also purchase a Tender Manual (Handbook) on our website https://howtotender.co.za/ which is a step by step guide how to respond to a South African Tender.  It includes examples of completed SBD forms.

Title Closing Date Tender No.
Supply, Delivery and Off-loading and Installation of Perimeter Fence for Tzaneen Correctional Centre: Polokwane Management Area. 2021-01-18 11:00 LMN 04/ 2020
Supply, delivery, installation & commissioning of a new fully automatic 24 point milking machine to Kirkwood Management Area 2021-01-15 11:00 KIRB 1/ 2020
Appointment of a service provider for servicing and repairs of earth moving Plant, Machinery and Municipal Vehicles for a period of Three years 2020-12-21 11:00 PSJLM-BTO-2020/21-33
Provision for the Appointment of an Energy Expert for a period of 6 Months 2020-12-01 13:00 EWSETA/RFQ/72/2020
Provision for the Appointment of a Quality Assurance Specialist Manager 2020-12-03 13:00 EWSETA/RFQ/70/2020
Provision of cleaning services in the EWSETA head office 2020-12-01 13:00 EWSETA/RFQ/66/2020
Request for proposals: Provision of external audit services 2020-12-17 12:00 CS/SCM/FINANCE/R20-21/13
Covid-19 Hygiene Services 2021-01-07 12:00 CO 20/26 O
Disposable Face Masks 2020-12-11 11:00 iThemba LABS – RFQ: iLABS/RFQ 2020/21:106
Supply and Delivery of COVID-19 Rapid Testing Kits 2020-12-11 11:00 iThemba LABS: iLABS/RFQ 2020/21:107
Panel of forensic investigation services 2020-12-23 12:00 MW/9/7/2020/2021
Provide Security services for emails and website at Majuba TVET College 2021-01-11 12:00 IT 19/06 C
Request for Information (RFI) for a Transmission Plant Historian 2021-01-28 10:00 CORP5235
Provision of ICT Platform as a Service including backup, Replication and Disaster recovery 2021-01-11 12:00 IT 19/07 C
Servicing of aircons at SAFCOL Roburnia Plantation 2020-12-02 12:00 RFQ/737/183
Framing of an approved list of suppliers to provide transportation services to Transnet Engineering on an “as and when” required basis for a period of three (3) years 2021-01-19 10:00 TE20-KLP-8GE-13130
Provide Annual Licensing and Support Services for Vidyo Connect at Majuba TVET College 2021-01-07 12:00 IT 21/01 O
Supply and delivery of drums and cartridges. 2020-12-02 10:00 SCM/NB14/2020/2021
Quotation for the appointment of a service provider for the supply, delivery and installation of a public address (PA) system in the auditorium. 2020-12-03 10:00 Q45-2020-21
Supply and delivery of equipment and materials 2020-12-02 10:00 SCM/NB15/2020/2021

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