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.

Pages

Title Closing Date Tender No.
Appointment of a Maximum of Three (03) Contractors for Upgrading of Various Municipal Buildings and Facilities at Service Centre (Magasyn), Middelburg 2018-10-16 12:00 BS40/08/2018
Panel of service providers to provide Silviculture for a period of three years. 2018-10-19 12:00 RFB105/2018
Supply and Deliver Toilet Ablution Container Nasaret Cemetery, Middelburg 2018-10-16 12:00 BS01/09/2016
Data cleansing and debtors collection. 2018-10-19 12:00 T2018/09/18/DCDC
Supply, Deliver and Install 26 Doors at the Community Halls in Middelburg 2018-10-16 12:00 BS 02/09/2018
Supply, delivery and installation of finger jointing mechanised planer for Timbadola Sawmill. 2018-10-19 12:00 RFB 104/2018
Supply and delivery of RG12 MK2 (Nyala) multi-purpose armoured personnel carriers for the City of Cape Town. 2018-10-22 10:00 85G/2018/19
Travel, accommodation and conference services. 2018-10-22 11:00 ARC/11/09/18
Supply: Hp 37a black original laserjet toner car 2018-09-27 11:00 GM11900254
Supply and deliver New Control Centre Workstations for Emergency Services. 2018-09-28 12:00 Q18.09.18
Supply: Gcb fusion laminator a3 max. 2018-09-27 11:00 GM11900255
Request for Proposals to Package 5- Minute Series or Stand alone Packages of Radio Features on Rise Fm,94.3 for a Period of 6 (Six) months 2018-09-28 12:00 Q15.09.18
Supply: Hardware items 2018-10-02 12:00 GG11900516
Request For Proposals to Package 5 Minute Series Or Stand Alone Packages of Radio Features on Greater Middelburg and Emalahleni Fm for a period of six (06) months 2018-09-28 12:00 Q16.09.18
Supply: Medical supplies 2018-10-01 15:00 GF11900250
Request for Proposals to Package 5-Minute Series or Stand Alone Packages of Radio Features on Radio Kragbron,93.1 Fm and Kosmos Sterio, 99.3 Fm for a period of Six (06) months 2018-09-28 12:00 Q17.09.18
Supply and delivery of projectors. 2018-10-02 11:00 GK11900122
Supply and Delivery of Guardrail 2018-09-28 12:00 Q14.09.18
Supply of Food for Standby Teams (as and when required) for Civil Engineering Services Employees 2018-09-28 12:00 Q19.09.18
Supply & delivery of LDV's to Kouga Municipality. 2018-10-22 12:00 169/2018

Pages

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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