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.
Chemical dosing of septic tanks at the following clinics Assisi, St. Faiths, Nhlalwane, Phungashe, Ntimbankulu and Madlala. Contract period: 24 months 2018-11-20 11:00 PSH 1072/ 1819
Chemical dosing of septic tanks at the following clinics: Mtentweni and Southport Clinics. Contract period: 24 months 2018-11-20 11:00 PSH 1073/ 1819
Chemical dosing of septic tanks at the Port Shepstone Hospital kitchen 2018-11-20 11:00 PSH 1074/ 1819
Manufacturing, supply and delivery of tracksuits students for a period of three (3) years: Division: Supply Chain Management. 2018-12-11 11:00 19/ 1/ 9/ 1/ 30TC (18)
Water treatment of cooling towers at Port Shepstone Hospital. Contract period: 36 months 2018-11-20 11:00 PSH 1075/ 1819
Suitably Qualified Service Provider to Supply with Round Up Spray and Spray 90 Hectors to Prepare Land For Planting at Renier Farm. 2018-11-15 12:00 RFQ/478
Manufacturing, supply and delivery of rain suit two piece for a period of three (3) years: Division: Supply Chain Management. 2018-12-11 11:00 19/ 1/ 9/ 1/ 69TC (18)
Supply and delivery of communication and sensory toolkits, fine motor toolkits and gross motor toolkits. 2018-12-07 11:00 B/ WCED 2462/ 18
Supply and Plant Soya Beans (Round Up Ready) for 90 Hectors at Renier Farm. 2018-11-19 12:00 RFQ/479
Appointment of a service provider to quantify asbestos fibres in different environmental samples for a period of three (3) years. 2018-12-10 11:00 CGS- 2018- 034A
Invitation to submit bid proposals for the provision of attire for MOD coaches within the Sport Development Directorate of the Western Cape Department of Cultural Affairs and Sport. 2018-12-07 11:00 5/ 1/ 3 CAS 05/ 2018
Request for information (RFI): for the appointment of a service provider to provide office lease space on a lease agreement for the CCMA Johannesburg office for a period of five (5) year 2018-11-30 11:00 RFI- CCMA/ 2018/ 01 - JHB
Appointment of a service provider to plan, design, supply 8 moveable low throughput poultry abattoirs (such as a container) for delivery to Gauteng Department of Agriculture and Rural Development 2018-11-30 11:00 GT/ GDARD/ 158/ 2018
Suitably Qualified Service Provider to Provide and Install Pipe at Avalon Farm for Water to the Installed Jojo Tanks 2018-11-19 12:00 RFQ/480
Contract for the removal of wet waste (pigswill) from Naval Base Durban for a period of two (2) years. Evaluation 80/20 principle. Validity period 120 days. 2019-01-09 11:00 SPSC- B- 052- 2018
Proffessional Registered Engineers to Design Landfill Cell of A Class B Containment Barrier. 2018-11-20 12:00 RFQ / 481
Contract for the removal of wet waste (pigswill) from various Naval Bases in the Cape Metropol for a period of two (2) years. Evaluation 80/20 principle. Validity period 120 days. 2018-12-06 11:00 SPSC- B- 042- 2018
Supply and delivery of 150x Indigenous (50l Bag and 1.2m Tall) Trees for Halls and open Spaces 2018-11-20 11:00 RFQ / 482
Terms of reference for the appointment of a suitable External audit firm to perform the external audit on The annual financial statements for the 2015, 2016, 2017 And 2018 financial years for Western Cape Community Education and Training college. 2018-12-10 11:00 CET- WC09
The supply, install, configure and support of an integrated Health Information System to Free State Department of Health for a Period of 10 years. 2018-11-30 11:00 RFB 1829/ 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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