Tendering Tips

Tip No.7: 17 August 2010

Evaluation of Tenders

How your tenders are scored

All tenders evaluated for national and provincial departments, state institutions and public entities must do so in terms of the Preferential Procurement Policy Framework Act. No.5 of 2000. The act prescribes that the lowest acceptable bid must either receive 80/90 points for price. All tenders must also stipulate the evaluation criteria that will be applied and part of it may focus on aspects like negative banking reports of the bidder, failure to submit a valid tax clearance, not having the required capacity and/or capability to complete or deliver the required product or service. All bidders will also be checked whether they are listed on the Register for Tender Defaulters.

Tender evaluation is applied on two points systems i.e. 80:20 and the 90:10 frameworks. The lowest acceptable bid will either receive 80 or 90 (lowest price) and the remaining 20 or 10 points will be awarded as incentive points for e.g. the HDI shareholding of the respective bidders, whether female and disabled ownership are included in such shareholding or not. These factors are crucial in the application of the aforementioned points systems which are based on Rand values i.e. for projected budgets of a Rand value of up to R500 000.00 the 80:20 points system will be applied and the 90:10 points system for projected Rand values of more than R500 000.00. These values are inclusive of all taxes, irrespective whether you are required to price your tender inclusive or exclusive of VAT and other taxes.

When completing a tender, it is essential to establish which points systems will be applied in the evaluation process and it is important that your pricing falls within the ambits of the applicable points system.