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.
Supply and install new direction sign board for the following Clinics Under Appelsbosch Hospital 2018-06-01 11:00 ZNQ 80/ 2018
Appointment of a service provider to upgrade, provide support and maintenance services for telephone management as well as switchboard systems at the Department of Rural Development and Land Reform at the following Deeds Registries Offices: Vryburg, Kimberley, Pietermaritzburg and Pretoria Deeds Registry for a period of 24 months. 2018-06-18 11:00 DRDLR (CRD- 08) 2018/ 19
Supply and Delivery of Frozen Vegetables, to the three (3) Central Hospitals (Groote Schuur-, Tygerberg- and Red Cross War Memorial Children’s Hospitals) on a twelve (12) month contract period with an option to extend the contract for a further twelve months based on performance 2018-06-22 11:00 RCCH02/ 2018
The Appointment of a Service Provider for the purchasing, delivery and commisioning of the Protein/Nitrogen Analyser in the analytical services north laboratory in Pretoria for the Department of Agriculture, Forestry and Fisheries. 2018-06-08 11:00 4.4.12.2/ 7/ 18
Department of Defence: Lenz Military Base: DMRS: Replacement and upgrade of Civil Engineering Services: Procurement of Professional Services: Built Environment: Civil Engineering. 2018-06-19 11:00 JHB.18/ 01
Supply and Delivery of Fresh Fruits and Vegetables, to the three (3) Central Hospitals (Groote Schuur-, Tygerberg- and Red Cross War Memorial Children’s Hospitals) on a twelve (12) month contract period with an option to extend the contract for a further twelve months based on performance 2018-06-22 11:00 RCCH03/ 2018
Terms of Reference: For the appointment of human settlements Programme delivery facilitators for a period of thirty six (36) months. 2018-06-19 11:00 BID VA 49/ 605
Appointment of a Service Provider to Conduct the KZN Private Sector Procurement Analysis. 2018-06-27 11:00 ZNT 05 EDTEA 18/ 19
Hygiene service for Benedictine Hospital (2 year contract) 2018-06-08 11:00 ben02/ 2018- 2019
Appointment of a Service Provider to Conduct B-BBEE Verification for 14 Provincial Departments and 11 EDTEA Public Entities. 2018-06-27 11:00 ZNT 01 EDTEA 18/ 19
Adhesive support bandage 100mm x 4.5m stretched ( to bring sample ) 2018-05-25 11:00 ben04/ 2018- 2019
Appointment of a Service Provider for the Procurement of Protective Clothing. 2018-06-27 11:00 ZNT 18 EDTEA 17/ 18
Request for proposals: Production of corporate videos and audio for the African Union 2018-06-22 15:00 AUC/DIC/G/240
Service and Repair Five Diesel Tanks 2018-06-01 11:00 ZNQ0234/ 18/ 19
Appointment of a service provider for the Manufacture, Supply Delivery and Installation/Assembling of Infrastructure, Production inputs and Training requirements for Ant Fish Farm Cooperative, Mtubatuba, Umkhanyakude District KwaZulu Natal. 2018-06-27 11:00 ZNT 25 EDTEA 17/ 18
Appointment of a Service Provider for the Formulation of a KZN Automotive Strategy. 2018-06-27 11:00 ZNT 04 EDTEA 18/ 19
Annual service of Laundry equipment. 2018-06-15 11:00 H82/ 18/ 19
Appointment of a Service Provider to Conduct a Feasibility Study and a Business Plan for the Establishment of the Amajuba and Umhlathuze Auto Service Hubs. 2018-06-27 11:00 ZNT 03 EDTEA 18/ 19
Annual service of Kitchen equipment. 2018-06-15 11:00 H81/ 18/ 19
Outsourcing of the Layout, Printing and Distribution of the Department of Defence Strategic Plan, Annual Performance Plan and Annual Report for a Period of Three (03) Years. 2018-06-28 11:00 CPSC- B- PC- 013- 2018

Pages

Tender adjudication process

The SBD/WCBD6.1 document must form part of all bids invited.  It contains general information and serves as a claim form for preference points for Broad -Based Black Economic Empowerment (B -BBEE) Status Level of Contribution, and explains how tenders or bids are decided.

The document says:

  • The bidder obtaining the highest number of points will be awarded the contract.
  • Preference points shall be calculated after prices have been brought to a comparative basis.
  • Points scored will be rounded off to two decimal places... Read More
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