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.
Provision of community outreach services (COS) by community based organisations (NPO`s)/ non profit organisations in the four health districts of the Eastern Cape namely Alfred Nzo, Joe Gqabi, Nelson Mandela Metro and Sarah Baartman for three consecutive financial years 2019/2020; 2020/2021 and 2021/2022. 2019-07-15 11:00 SCMU 3- 19/ 20- 0084- HO
Rendering security services at Tshwane Region for a period of eighteen (18) months 2019-07-12 11:00 GT/ GDSD/ 030/ 2019
Supply, delivery and off-loading of veneered medium density fibre (MDF) and high density fibre (HDF) boards for a period of three (3) years (36 months) 2019-07-15 11:00 DCS10/ 2019
Supply, delivery and off-loading of day old broiler chicks to various correctional centre farms for a period of 36 months (3 years): Department of Correctional Services. 2019-07-15 11:00 DCS 8/ 2019
Installation and Maintenance of Security System at DOD Logistic Support Formation for a Period of Three (03) Years 2019-07-22 11:00 CPSC- B- PC- 003- 2019
Pretoria: Centurion: Erasmia Police Station: Construction of platforms, External works and connection of services, Water, Sewer and Power to erven 656 & 657: Completion Project 2019-07-23 11:00 Pt19/ 007
The province of KwaZulu-Natal, Department of Transport, invites tenders of Vukuzakhe Contractors for the Betterment and Regravelling of D1805 Contract 2 in the Nongoma Municipality within the Zululand District. The duration of the project will be 3 months. 2019-08-13 11:00 ZNT373/ C265/ 2045/ S/ 2/ 2018T
The province of KwaZulu-Natal, Department of Transport, invites tenders of Vukuzakhe Contractors for the Betterment and Regravelling of A996 in the Nongoma Municipality within the Zululand District. The duration of the project will be 3 months 2019-08-13 11:00 ZNT373/ C265/ 2021/ S/ 1/ 2018T
Supply and Delivery of Product Training (PLC, Traffic Lights and Work Benches) 2019-07-17 11:00 PUR 5800/22
Five New Fifteen Seater Busses for Various Sites 2019-07-17 11:00 PUR 3103/1
The province of KwaZulu-Natal, Department of Transport, invites tenders of Vukuzakhe Contractors for the Betterment and Regravelling of L2602 Contract 1 in the Ulundi Municipality within the Zululand District. 2019-08-13 11:00 ZNT373/ C266/ 2111/ S/ 1/ 2018T
Supply, deliver and registration of skip loader truck 2019-07-05 10:00 T/FLEET/06/02/2019/2020
Summarizing; compiling and printing of all municipal documents 36 months 2019-07-05 10:00 T/MM06/01/ 2019/2020
Operational leasing and maintenance of office automation ; photocopying machines for 36 months 2019-07-05 10:00 T/ICT/06/03/2019/2020
Supply, deliver, install and maintenance of internet, Wan (internet Wan connecting remote offices) and voice over the internet protocol (VOIP) for 36 months 2019-07-05 10:00 T/ICT/06/02/2019/2020
Supply and delivery of Microsoft licensing (Microsoft volume licensing) renewal of existing licenses for 36 months 2019-07-05 10:00 T/ICT/06/01/2019/2020
Appointment of a service provider to provide Transaction Advisory Services for the Sourcing of Capabilities Programme 2019-07-19 11:00 GEMS/TransactionAdvisor/2019/CON010
Appointment of a service provider to provide Phase 3 of the GEMS Learnership Programme which focuses on soft Skills 2019-07-19 11:00 GEMS/LearnershipProgramme / 2019/CON009
Appointment of a panel of service providers to provide Travel Agency services for the Government Employees Medical Scheme for a period of one (1) year commencing 01 January 2020, which contract may be annually renewable for a maximum of 2 more years 2019-07-18 11:00 GEMS/TravelAgencyPanel/2019/CON008
Total water treatment service - Request for initial response of interest 2019-06-25 10:00 IRI DSP 05/06/2019


2 items that determine tender pricing

Article by Werner van Rooyen


31 January 2019

Many bidders that respond to tenders struggle when it comes to calculating a price for a specific tender. One of the reasons for this is that a large number of Small Business Owners are usually new to the tender process and therefore they lack the necessary experience to price their bids correctly.

Without getting into the fundamentals of accounting there are two basic items that determine your... Read More

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