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.


Title Closing Date Tender No.
Tenders are invited for the Manufacturing of 34 Units, Galv Hot Dipped Frames, and the Installation of the Bird Proofing Covers at Henry Fasie Community Hall 2018-11-16 11:00 CSQ11181486
Tenders are invited for Staff to be trained in " Sign Language 2018-11-19 11:00 CSQ11181482
Tenders are invited for the Service and Maintenance on Total Organic Carbon Analyzer 2018-11-20 11:00 CSQ11181481
General Cleaning and Garden Maintenance at Offices, Depots and Rental Housing Estates including Supply of Containers for the City of Cape Town. 2018-12-18 10:00 122S/2018/19
Supply, delivery and installation of chlorine dioxide generator system and supply of precursor chemicals for Cullinan Water Treatment Plant for a period of five (5) years 2018-11-27 12:00 RFB/MW/151/2018-19
Fencing of Wallmannsthal Water Treatment Plant: CIDB3SQ 2018-11-26 12:00 RFB/MW/149/2018-19
Supply and delivery of the main turbine control oil pump, Auxilliary control oil pump and SFPT lube oil pump elements. 2019-01-14 10:00 MPGXC005400
Establishment of a prequalified list of construction clerk of works for a period of three (3) years. 2019-02-01 16:00 SCMU5-18/19-0027
Pecu Nema Type 1800va Fail 230v (6280) 2018-11-15 11:00 No Refference
Pecu Nema Type 1800va Fail On (6279) 2018-11-15 11:00 No Refference
Pecu Micro Type 1800va Fail On (6295) 2018-11-15 11:00 No Refference
Appointment of a service provider to provide media monitoring and analysis services for the office of the chief justice for a period of thirty-six (36) months 2018-11-30 11:00 OCJ2018/ 01
Appointment of consultants to conduct the Gauteng Liquor Board Health Check. 2018-11-30 11:00 GT/ GDED/ 154/ 2018
Terms of reference for the appointment of a service provider to manufacture, supply and deliver solar based fire fighting trailer units for land reform farms and state land within the Eastern Cape Province. 2018-11-30 11:00 DRDLR: EC 010(2018/ 2019)
Department of Justice & CD: Brixton Magistrate Court, c/o Queen & Mercury Road: Rendering of cleaning services for a period of 24 months (EPWP). 2018-12-04 11:00 JHB.18/ 30
Suitably Qualified Service Provider to Ripper 90 Hectors to Prepare Land for Planting Soya at Renier Farm 2018-11-15 12:00 RFQ/476
Department of Justice & CD: Randburg Magistrate Court, 18 Shepard Avenue: Rendering of cleaning services for a period of 24 months (EPWP) 2018-12-04 11:00 JHB.18/ 29
Suitably Qualified Service Provider to Disk 90 Hectors of Land to Plant Soya Beans at Renier Farm. 2018-11-15 12:00 RFQ/477
Department of Defence: Randfontein Military Base: Complete repairs and renovations of Military Base. (Query Ref No. 1106) 2018-12-04 11:00 JHB.18/ 28
Road signage to Turton CHC and supported clinics 2018-11-23 11:00 ZNQ 154/ 1819


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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