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.

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Title Closing Date Tender No.
Conduct women Councillors gender mainstreaming training programme 2018-11-09 11:00 COGTA 4/ 2/ 2- 2018/ RFP/ 04
Construction Of Infrastructure For Cement Crusher Plant (OSHO) and Kenako Concrete Batching Plant In Zone 5 Of The SEZ Retender 2018-11-12 12:00 CDC/ 496/ 18
Request for Proposal - Expression of Interest - provision of an E-Sourcing solution. 2018-10-31 17:00 ESD0001
The South African Social Security Agency hereby invites proposals from independent auditors to perform audit verification on cash paymaster services (Pty ) Ltd ( CPS)’s audited statements of expenses incurred, income received and net profit earned for a period not exceeding Four (4) Months. 2018-11-02 11:00 SASSA: 13/ 18/ IA/ HO
The appointment of a service provider to conduct feasibility study for the Amalgamation of the Department of Arts and Culture (DAC) entities. 2018-11-09 11:00 DAC 13/ 18- 19
The South African Social Security Agency hereby invites proposals from potential service providers to provide the CONTENT LIFECYCLE MANAGEMENT SUITE 16 ( LIVELINK) Support and Maintenance for a period of three (3) years 2018-11-09 11:00 SASSA: 14/ 18/ ICT/ HO
Food mincer. Quantity: 1 unit 2018-10-30 11:00 PSH 959/ 1819
Request to Appoint a Panel of External Compliance Risk Management Service Providers for a period of three (03) years 2018-11-09 11:00 RFA 1824/ 2018:
The Department of Arts and Culture (DAC) invites suitably, qualified and experienced service provider to bid for a task of Development and Implementing Arts and Culture Development Programmes in collaboration with Community Arts Centres (CACs) and Community Arts Organisation in the four provinces of Free State, Mpumalanga, Northen Cape, and Limpopo. 2018-11-09 11:00 DAC 11/ 18- 19
Appointment of a Service Provider to Provision, Upgrade And Implement Sage Enterprise Resource Planning (ERP) System To Robben Island Museum (RIM) for the period of thirty-six (36) months 2018-11-19 11:00 RIM ICT- 02- 2018 / 2019
The appointment of a service provider to render project management services in the implementation of training, mentorship and placement of graduates in farms funded by the national skills fund. 2018-11-16 11:00 4.4.12.4/ 14/ 18
Appointment of a Service Provider to undertake a comprehensive refurbishment of a 13m fibreglass coastal research vessel, including the provision of a dolly, routine and unforeseen maintenance and modifications to the vessel over a period of three (3) years 2018-11-19 11:00 NRF/ SAIAB/ 2019- 006
Appointment of a panel of service providers to supply and deliver 50ppm diesel in the ports of Mossel Bay, Cape St. Francis, Port Elizabeth, East London, Durban and Richards Bay to fuel two coastal research vessels and vehicles for a period of five (5) years 2018-12-05 11:00 NRF/ SAIAB/ 2019- 002
Repairs and upholstery of chairs - 29 chairs 2018-10-26 11:00 ZNQ 61/ 08/ 2018
Welkom Department of Rural Developement and Land Reform (Drd & Lr): Lejweleputswa District: Alternative Office Accommodation and Parking Facilities (1557.50m² and 20 Parking Bays) 2018-11-13 11:00 BL18/ 064
Invitation to service providers to submit proposals for acquisition of a service provider to provide project management services to the Enterprise Project Management office for a period of 12 months /or 785 Hours, whichever comes first. 2018-11-19 11:00 CIPC BID NUMBER: 13/ 2018/ 2019
Bethlehem Department of Rural Developement And Land Reform (Drd & Lr): Thabo Mofutsanyane District: Alternative Office Accommodation And Parking Facilities (1994.17m² and 25 Parking Bays) 2018-11-13 11:00 BL18/ 063
For sale of: removal and recycling of cardboard and waste paper 2018-10-26 11:00 ZNQ 64/ 08/ 2018
FICKSBURG: SOUTH AFRICAN SOCIAL SECURITY AGENCY (SASSA): New Office Accommodation and Parking Facilities (561.01m² and 20 Parking Bays) 2018-11-13 11:00 BL18/ 065
Appointment of a service provider at the Independent Communications Authority of South Africa for provision of storage facilities on an 80/20 PPPFA 2000, Preferential Procurement Regulation: 2017 2018-10-26 11:00 ICASA 21/ 2018

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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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