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.
The Western Cape Government Department of Human Settlements invites tenders for the construction of 600 emergency housing units for the Kosovo Community located close to Philippi, Cape Town. 2019-03-29 11:00 HSC 18/ 2018/ 2019
The Western Cape Government Department of Human Settlements invites tenders for the construction of 750 emergency housing units for the Silvertown Community located in Khayelitsha, Cape Town 2019-03-29 11:00 HSC 17/ 2018/ 2019
Specification for Supply, Delivery and Erection of Mobile Classrooms -National Contract 2019-04-05 12:00 PUR 5600/ 22
Preferred Service Providers for Technical Services (General Building) for COEGA Development Corporation (PTY) LTD 2019-04-08 12:00 CDC/ 112/ 19
Preferred Service Providers for Technical Services (General Building) for COEGA Development Corporation (PTY) LTD 2019-04-08 12:00 CDC/ 112/ 19
The request for development proposals for the leasing of Takkieskloof Holiday Resort situated in Truterstreet, Riversdale 2019-04-26 12:00 HESICORP 16/1819
Provision of fraud and corruption hotline services for Saldanha Bay Municipality for the period 01 July 2019 to 30 June 2022. 2019-04-26 12:00 SBM 09/18/19
Request for bid for the appointment of a professional team to undertake township establishment processes at Masilonyana Municipality in the Free State 2019-04-02 11:00 HS - B06/2018/2019
The completion of outstanding building work at Elandsdoorn CNC required within Mpumalanga Operating Unit 2019-04-11 10:00 PTATEN2444
Appointment of a service provider(s) for the provision of learning support materials for university students supported by the Mpumalanga Department of Education for a period of three (03) years 2019-04-12 12:00 EDU/139/19/MP
Appointment of a service provider for the supply of locums of all grades, EMS and specialities (exclusive of administrative personnel) to all hospitals/institutions under the control of the Department of Health in Mpumalanga for a period of three (3) years 2019-04-12 12:00 HEAL/109/19/MP
Hire of road construction equipment in Mpumalanga Province as and when required for a period of three years 2019-04-15 12:00 PWRT/1624/19/MP Re-Advertisement
Rigging services and load testing of beams and lifting equipment during normal maintenance and outages at Tutuka Power Station 2019-04-24 10:00 MPGXC004980R1
The provision of horticultural maintenance services to Kusile Power Station 2019-04-25 10:00 MPPPSC001085R1
Supply of Digital Aerial Photography 2019-03-29 12:00 T 61/2018/19
Supply of Stationery 2019-03-25 11:00 No reference number supplied
Small Contractor Mining 2019-03-25 11:00 No reference number supplied
Production Equipment Maintenance & Supply 2019-03-25 11:00 No reference number supplied
Product Transport 2019-03-25 11:00 No reference number supplied
Plant Operations Cleaning Services 2019-03-25 11:00 No reference number supplied

Pages

Extension of validity period

By Werner van Rooyen

www.howtotender.co.za

31 January 2019

Those of you who are familiar with responding to tenders will know that it is common practice for procuring entities to extend the bid price validity period. We received the undermentioned queries regarding the extension of the validity period of the bid price.

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