Tenders, B-BBEE and the new Preferential Procurement Regulations 2017

Having a good B-BBEE status level is VERY IMPORTANT in the tender process!

All tender documents will have the NEW Standard Bidding Document 6.2, which is used to claim your Preference Points for B-BBEE. The higher your B-BBEE status level, the more points you will score on the Preference Points System. Ultimately the bidder or bidders scoring the highest points will be awarded the tender.

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.

General Procurement Guidelines

Government issued the General Procurement Guidelines not only as a prescription of standards of behaviour, ethics and accountability which it requires of its public service, but also as a statement of Government's commitment to a procurement system which enables the emergence of sustainable small, medium and micro businesses which will add to the common wealth of South Africa and the achievement of enhanced economic and social well-being of all South Africans.

Tenders in South Africa are measured on three principles, namely Functionality, Price and Broad-Based Black Economic Empowerment (B-BBEE). An Enterprise's ability to execute a contract is measured through the Functionality Principal in the Tender Environment. If an Enterprise's tender response does not pass the Functionality test it can't be measured on Price and B-BBEE. Enterprises that respond to tenders must ensure that they will pass the Functionality test in order to advance.

Functionality in Tenders Part 1

Functionality in Tenders (1)

The Preferential Procurement Policy Framework Act 2017, establish the rules according to how Government Entities must evaluate tenders. The Preferential Procurement Regulations of 2017 takes it a step further and gives guidance on how to specifically award points according to certain criteria such as B-BBEE and Price. 

There appears to be a serious lack of knowledge regarding South African tender procedures. Here, the tender processes are ruled by various Acts, Regulation and Guidelines which are specifically designed to ensure that the tender processes are in line with the Constitution of South Africa - which dictates that the tender process should be fair, equitable, transparent, competitive and cost-effective.

It is important to know that when you respond to a tender there are certain guidelines that Government Officials need to follow in order to evaluate your tender. According to the Implementation Guide - Preferential Procurement Regulations, 2017, pertaining to the Preferential Procurement Policy Framework Act, Accounting Officers and Accounting Authorities of all public entities listed in Schedules 2, 3A, 3B, 3C and 3D to the PFMA and municipal entities must comply with the rules and guidelines stipulated below.

If one looks at the General Procurement Guidelines that National Treasury issued to Government Departments, it is clear that Government wants the tender process to be fair, equitable, transparent, competitive and cost-effective exactly as Section 217 of the Constitution of South Africa requires.

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Title Closing Date Tender No.
Implementation evaluation of corporate governance in South Africa’s State Owned Enterprises (SOE’s) 2018-12-07 12:00 DPME 11/ 2018- 2019
Repairs to ceiling boards, gutters, floors, fascia boards, wall, tiles and paintwork at DOT cost centre office, Eshowe 2018-12-14 11:00 ZNTU 03429 W3
Supply and delivery of ten (10) laptops equivalent to lenovo thinkpad T580 2018-12-14 11:00 ZNQ 18/ 19/ 0017/ NCR
Dundee Regional Laundry: Refurbishment, Service Equipment and Procurement of New Equipment. 2018-12-14 11:00 WIMS 068237- ZNTL 03894W
Supply and delivery of twenty (20) of all-in-one desktops equivalent to Lenovo think centre M910z. Contract period: 01 month. 2018-12-14 11:00 ZNQ 18/ 19/ 0016/ NCR
Appointment of a Mult-Disciplinary Entity to Provide Professional Services to Undertake the Assessment and Upgrading of the Central Air Conditioning System at St. Aidans Hospital 2018-12-14 11:00 WIMS 063141
The Department of Local Government (DLG) requires a Service Provider to provide the Municipal Minimum Competency (MMC) Training programme to identified officials. 2018-12-14 11:00 LG 01/ 2018/ 2019
Training of 100 beneficiaries in Vehicle Maintenance & Repair Assistant Skills Programme NQF L2. 2018-11-23 11:00 T/ 37/ 18 Skill VMRA
The appointment of the service provider to develop an Environmental Management Framework (EMF) for the Cape Floral Region Protected Areas World Heritage Site (CFRPA WHS) for the period of eighteen months. 2018-12-07 11:00 E 1489
False Bay College: All Campuses: Supply & Delivery of IT Workstations and Peripheral Devices 2018-12-07 11:00 FBC T12/ 2018
Sibasa SAPS Training Centre: Repairs to Training Centre 2018-12-11 11:00 PLK18/ 43
SAPS: Grassy Park Police Station: Upgrading of Stormwater Drainage 2018-12-07 11:00 CPT 1014/ 18
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. 2018-12-07 12:00 E 1490
Service and maintenance of standby and base load generators for 24 months. 2018-12-07 11:00 KIM- 1018/ 107452
Invitation of service providers for monitoring and evaluation of Gauteng City Region Academy (GCRA) Training and Development Intervention Programmes for a period of three (3) years 2018-12-07 11:00 GT/ GDE/ 160/ 2018
Outsource for the Service Providers for a Forensic Investigation of the Repair and Maintenance Project at 11 Military Hospital for Defence Inspectorate Division (DACAF). 2018-12-14 11:00 CPSC- B- G- 161- 2018
Midlands Region: Department Of Basic Education: Umzinyathi District ( Msinga) Umbonje High School: Sanitation Programme Phase II 2018-12-18 11:00 ZNTL 02899 W
Midlands Region: Department Of Basic Education: Umzinyathi District ( Msinga) Mhlangezulu Secondary School: Sanitation Programme Phase II 2018-12-18 11:00 ZNTL 03804 W
Midlands Region: Department of Basic Education: Umzinyathi District ( Msinga) Asibambisane Primary School: Sanitation Programme Phase II 2018-12-18 11:00 ZNTL 03089 W
Appointment of Professional Services Providers for development of 5-year reliable water and sanitation services delivery plan (Phase1) – Situational Assessment Review and Phase 2 – Development) for Ilembe DM. 2018-12-07 11:00 MISA/ DWSS/ IDM/ 043/ 2018

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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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