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.
Video Conferencing Rental Solution for a period of 36 months 2018-12-03 11:00 HDA/JHB/2018/017
Appointment of Professional Service Providers to Compile Wayleave Applications on Behalf of Bloem Water for all Infrastructure Under their Control and Jurisdiction (Servitudes). 2018-12-14 12:00 BW249/WLA/18
Small-Scale Embedded Generation: State of Play Assessment and Policy Options to Support Social, Environmental and Economic Benefits for the Department of Energy 2018-11-23 11:00 #83306338
Mechanical Pumps Repair and Maintenance. 2019-01-18 11:00 DIA5635/2018RFP
Tracking the Transition to a Low Carbon and Climate Resilient Society and Economy 2018-11-23 11:00 #83306336
Develop, Manage, Operate and Maintain Balele Caravan & Game park. 2019-01-10 11:00 No refference
Supply, delivery and installation of a palisade fence for Lamberts Bay Caravan Park and the removal of old fence 2018-11-27 12:00 CED 06/2018-2019
Supply and delivery of Material for Foreman Containter Office Block at Clanwilliam Dam in the Western Cape for DWS Construction South 2018-11-15 11:00 WQ7605 WTE
Provision of live work training services within LOU. 2018-12-13 10:00 59CON1887
Supply and Delivery of Water Tanks, Pumps and Fittings at Clanwilliam Dam in the Western Cape for DWS Construction South. 2018-11-15 11:00 WQ7500 WTE
Erection of the Mc 310 K12 Potain Tower Crane Located at Clanwilliam Dam Raising Project Site with the view of Commissioning The Crane 2018-11-15 11:00 WQ7606 WTE
Supply and delivery of Assorted PPE. 2019-01-15 10:00 MPGXC005401
Supply: 1 each x brush cutter & 1 each x chainsaw 2018-11-15 12:00 GD11900588
Supply and delivery of “critical Spares” for the Continued Operation of the Liebherr Mobilmix 2.25 Concrete Batching Plant. 2018-11-15 11:00 WQ7503 WTE
Assurance of Engineering Integrity of the Critical Structural Beams and Critical Bearer Columns of the Liebherr Batch Plant Located at Clanwilliam Dam. 2018-11-15 11:00 WQ7553 WTE
Supply: Batteries rp240-bh 2018-11-21 11:00 GH11900216
Supply and Delivery of Temporary 200mm Dia Municipal By-Pass Pipeline on Right Bank for the Raising of Clanwilliam Dam in the Western Cape for DWS Construction South. 2018-11-15 11:00 WQ7554 WTE
Supply: Tools and equipment 2018-11-20 12:00 GD11900593
Supply: 1 each x hv oil dielectric tester 60kv 2018-11-20 12:00 GD11900594
Re-Commisioning of the Liebherr Batching Plant Located at Clanwilliam Dam Raising Project 2018-11-15 11:00 WQ7497 WTE

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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