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

We have previously asked: How important is a good B-BBEE status level of contributor in the tender process?

The answer is still the same: VERY IMPORTANT!

In all tender documents, you will find 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 of contributor, 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.

Brand new Preferential Procurement Regulations 2017 for Tenders

The brand new Preferential Procurement Regulations 2017, has been finalized and was gazetted on 20 January 2017. There are some interesting changes and challenges that we will discuss during the coming months. This is 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.

Draft Procurement Regulations Media Release

 The Draft Procurement Regulations 2016 were released on 14 June 2016. If these regulations are going to be implemented it will change the Tender environment in South Africa. Below is the media release from the Office of the Chief Procurement Officer, explaining the major changes in the Regulations:

“The Office of the Chief Procurement Officer (OCPO) has published the proposed new Preferential Procurement Regulations*, to afford the public an opportunity to comment.

General Procurement Guidelines

Government issued the General Procurement Guidelines not only as a prescription for standards of behaviour, ethics and accountability, which it requires of its public service, but also as a statement of their commitment to a procurement system enabling the emergence of sustainable small, medium and micro businesses. These SME's will add to the common wealth of the country and its objective of enhanced economic and social well-being for all its people.

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

The Preferential Procurement Policy Framework Act 2011, establishes the rules according to how Government Entities must evaluate tenders. The Preferential Procurement Regulations of 2011 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*, Accounting Officers and Accounting Authorities of all public entities** 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.

Draft Procurement Regulations 2015

The Government thought it a good idea to have a look at the Preferential Procurement Regulations of 2011 and to change these Regulations to better fit the South African Tender Environment.

These Regulations were quietly issued end of 2015 for public comment.

As the case with most new Regulations or Acts there is always good and bad that accompanies it.

Some of the good things addressed in these draft regulations are:

Pages

Title Closing Date Tender No.
Unometer intra abdominal pressure device Ref 158100110190 x 100 units 2017-08-30 11:00 134/ 08/ 17
Double oxygen flow meters x 95 (specification attached) 2017-08-30 11:00 136/ 08/ 17
Spiral Extension set for anaesthetic use, micobore +-3 m, manufactured from medical grade Plastic & kink resistant micro-bore tubing x 1000 units. 2017-08-30 11:00 132/ 08/ 17
Disposable cuscos Large x 5000 Medium x 3000 Small x 2000 2017-08-30 11:00 95/ 07/ 17
Surgical gowns disposable reinforced X -Large x 8000 units. (Periodic Contract for 04 months). 2000 units to be delivered per month. 2017-08-30 11:00 119/ 08/ 17
Gowns surgical sterile reinforced - Large x 8000 units. (Periodic Contract for 04 months). 2000 units to be delivered per month. 2017-08-30 11:00 108/ 07/ 17
Half day infusor 5ml/h portable elastometric infusion system sterile x 120 units 2017-08-30 11:00 99/ 06/ 16
Skin graft carriers 3:1 dermacarriers (box of 20) x 60 boxes 2017-08-30 11:00 07/ 04/ 17
6-0 Prolene (0.7 metric) 30” (75cm) polypropylene suture blue monofilament sterile non absorbable surgical suture -4 strands per packet x 40 units. (This item is used in arterial surgery to repair tiny structures). 2017-08-30 11:00 131/ 08/ 17
Percutaneous endoscopic gastrostomy standard P.E.G.Kit 20F (67mm) for single use - sterile with contents x 20 units (This item is used in endoscopic surgery for gastrostomies). 2017-08-30 11:00 133/ 08/ 17
Skin graft carriers 1,5 : 1 dermacarriers (box of 20) x 60 boxes 2017-08-30 11:00 06/ 04/ 17
Dressing transparent adhesive film 56cm x 84m (box of 10) x 480 boxes. (Periodic Contract for 12 months) 40 boxes to be delivered per month 2017-08-30 11:00 40/ 05/ 17
2 Boxes, Advance DSP tip curved scissors 23Ga, 2 Boxes, Advance DSP tip ILM forceps 23Ga, 2 Boxes, Advance DSP tip endgrasping forceps 23Ga, 2 Boxes, Advance DSP tip MPC vertical scissors 23GG 2017-08-28 11:00 ZNQ: 492/ 17/ 18
Each box, Hydrofiber dressing with silver size 20 x30cm (Box/5) 2017-08-28 11:00 ZNQ: 490/ 17/ 18
Each, Magnetic resonance conditional superalloy coil with with spaced synthetic fibers 0.035” compatible various sizes 2cm- 2mm, 2cm- 3mm, 3cm- 2mm, 3cm-3mm. 2017-08-28 11:00 ZNQ: 498/ 17/ 18
Each, Magnetic resonance conditional superalloy coil with with spaced synthetic fibers 0.035” compatible various sizes 1cm- 2mm, 1cm- 3mm, 5cm-5mm, 20cm- 10mm, 20cm- 20mm 2017-08-28 11:00 ZNQ: 496/ 17/ 18
Each, Magnetic resonance conditional superalloy coil with with spaced synthetic fibers 0.035” compatible various sizes 10cm- -10mm, 10cm-12mm, 10cm-15mm, 10cm- 5mm, 10cm-8mm 2017-08-28 11:00 ZNQ: 495/ 17/ 18
Each, Temporary hymodialisis double lumen catheter kit size 11.5F 19.5cm 2017-08-28 11:00 ZNQ: 484/ 17/ 18
Each, Clear suction liner, 2L, Blue/White/ LIGHT Green with shutoff valve 2017-08-28 11:00 ZNQ: 480/ 17/ 18
10 Pack, Adult cardiopulmonary by pass tubing pack 2017-08-28 11:00 ZNQ: 382/ 17/ 18

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Functionality and Tenders

In all competitive bids (tenders) you as the bidder will have to respond to Functionality. You will need to score a set minimum number of points, measured as a percentage, on Functionality of a competitive bid (tender) in order to advance to the next phase of evaluation in the tender process.

Usually Organs of State evaluate competitive bids (tenders) as follows:

  • The tender response is evaluated on Functionality where the bidder must score points out of a maximum of 100 points.
  • A threshold of between 65 to 75 out of 100 points... Read More
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