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.
Prieska: Construction of a New Technical Workshop at Prieska High School 2018-11-20 11:00 DRPW 020/ 2018
The removal and disposal of general waste, ash and garden waste, from Groote Schuur Hospital over a three (3) year period, with the option of extending the contract for an additional year. 2018-11-16 11:00 GSHPT25/ 2018
Ntabankulu CHC in Ntabankulu - Alfred Nzo District municipality: Refurbishments 2018-11-21 11:00 SCMU3- 18/ 19- 0369- HO
Calvinia: Construction of a Large Admin Block at Hantam Primary School 2018-11-20 11:00 DRPW 015/ 2018
The appointment of a private security contractor to render a security service at the aquarium building, Lower Beach Road, Sea Point, Western Cape province for a period of two (2) years. 2018-11-09 11:00 4.4.12.4/ MLRF 155/ 19
Ronderbosch: Groote Schuur House/ Museum: Appointment of a Curator for a two year period. 2018-11-09 11:00 CPTSC 18/ 18
Provision of security services for a period of three years. 2018-11-16 12:00 DAC005/ 1819
Alternate office accommodation: 461.36m² and 15 parking bays for a period of 3 or 5yrs 2018-11-09 11:00 LS14/ 2018
Replace septic tank at Philani Clinic 2018-10-30 11:00 ZNQ 773/ 18
Service to heat pumps x2 units as per spec. 2018-10-31 11:00 ZNQ 569/ 18
Service to calorifier, inspection and test certificate x 7 units units as per spec 2018-10-31 11:00 ZNQ 568/ 18
Carry out planned annual service to 6kva UPS in labour ward x 01 unit. 2018-10-26 11:00 ZNQ 171/ 18
Annual servicing of oxygen, nitrous & Vacuum (HP/LP points) x 700 units 2018-10-26 11:00 ZNQ 1448 / 18 / 19
Rendering of cleaning and hygiene services to Government Communication and Information System 2018-11-23 11:00 RFB 007 2018 2019
Carry out planned servicing of the compressor x 02 units. 2018-11-26 11:00 ZNQ 92/ 18
Carry out major servicing to cold room x 01 unit. 2018-10-26 11:00 ZNQ 173/ 18
Replacement of water tanks x02 units 2018-11-02 11:00 89/ 10/ 2018/ 19
On site laboratory services required for the determination of the following enzymatic activities from 25 Fish Samples: Protease activity; Amylase activity; Lipase activity; Cullulase activity; Acetylcholinesterase 2018-10-26 11:00 RFQ000292
Appointment of Panel of Contractors for Construction of Water, Sewer, Roads and Storm Water services in Bakenpark ext 6 & 7 in Bethlehem in the Free State Province for a period of twelve (12) months. 2018-11-09 11:00 HDA/ FS/ 2018/ 007
Service to Early Fire Detecting Unit X 05 Units 2018-10-31 11:00 ZNQ 595/ 18

Pages

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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