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.
Appointment of a Supplier for the Bioremediation at the pniel wwtw 2018-12-18 11:00 FQ/SM: 88/19
Construction of toilet top structures in Kutlwanong, Kagisho & Phomolong Phase 1 2019-01-28 11:00 INFRA/CE/T2/2018
Tenders are invited to Supply,Install and Deliver eight(8) Gun Safes 2018-12-18 11:00 CSQ12181511
Supply and Deliver Coin Counter Equipment 2018-12-18 11:00 GQ12182007
Repair and resurface of various roads in central business district of Upington 2019-02-01 14:00 TN099/2018
Supply and Deliver Note Counters Equipment 2018-12-18 11:00 GQ12182007
Appointment of consulting engineering firm for the planning, design and project management of water services for Hakskeen Pan 2019-02-01 14:00 TN100/2018
Terms of Reference for Consultant Gender Programme Expert Consultancy Services for Launching the AU Strategy for Gender Equality and Women’s Empowerment 2018-12-21 17:00 AUC/WGDD/C/252
For the supply and installation of HV Surge arresters. 2019-02-05 10:00 KBY/54341
Supply & deliver Tinned Wire Copper 1.6mm fusewire. 2018-12-18 11:00 SQ12181328
Supply & deliver Circuit Breakers 40amp 240volt,5ka CURVE 2 SFM1-G3 complete.no shrouds 2018-12-18 11:00 SQ12181328
Supply & deliver Energy Saving Flourescent Tubes T5 28W/840 1149MM long, Cool White. Osram, Phillips or approved equal. 2018-12-18 11:00 SQ12181328
Supply and deliver 667/TZ/30937/000 EFC Modules 128M Signal Controller -Siemens or approved equal 2018-12-18 11:00 GQ12182003
Supply and deliver Hydraulic Breakers- LH270 Atlas Copco or approved equal 2018-12-18 11:00 GQ11182001
Rental of a digger loader (6-7 ton) for a the month of December 2018 and January 2019 2018-12-18 11:00 292257
Rental of bull dozer for the months of December 2018 and January 2019 2018-12-18 11:00 292038
Rental of light delivery vehicles (engine capacity 2000 cc) for January and February 2019 2018-12-18 11:00 292218
Rental of light delivery vehicles (engine capacity 1400 cc) for January and February 2019 2018-12-18 11:00 123456
Rental of a rear end loading (REL) refuse compactor - 19 m3 (double axle) refuse compactor truck, for December 2018 and January 2019 2018-12-18 11:00 234567
Rental of landfill compactor for December 2018 and January 2019 2018-12-18 11:00 345678

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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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