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.
Appointment of a service provider for the off-site storage of the National Department of Public Works record’s in terms of the national archives and record services of South Africa Act 43 of 1996 for a period of 3 years at head office and Johannesburg Regional Office. 2019-07-09 11:00 HP19/ 005GS
Pretoria: Procurement of alternative office accommodation for South African Police Service: Auction Storage and Compacting Area comprising of 3 385.91 square meters and 204 parking bays in the outskirts of Pretoria, Silverton Industrial and Watloo area for period of 5 years 2019-07-16 11:00 Pt19/ 006
Pretoria: SAPS: Pretoria West Mobilization Support Services: Automated wash bay 2019-07-16 11:00 Pt19/ 005
Limpopo Province: Polokwane: Procurement of office accommodation (existing building or building to be constructed) at a total guideline gross area of 3339.85 sqm and a lettable area of 3036.23 sqm with 47 parking bays and standby generator on behalf of Department of Rural Development and Land Reform (Deeds Registry) for a period of 5 years. 2019-07-09 11:00 PLK19/ 08
Appointment of a service provider to supply, set-up and to install Office Furniture, on a lease basis to the South African Weather Service for a period of four (4) years 2019-07-05 11:00 SAWS- 197/ 19
Appointment of a service provider to conduct a 2-D seismic survey for the Karoo Deep Drilling Project in Beaufort West, Western Cape 2019-07-18 11:00 CGS- 2019- 013K
Appointment of a panel of Legal Experts for the South African Weather Service, for a period of three (3) years 2019-07-05 11:00 SAWS- 199/ 19
Appointment of a service provider to render Psychometric Assessment Services, to the South African Weather Services for a period of three (3) years. 2019-07-05 11:00 SAWS- 196/ 19
Request for Appointment of a list of preferred suppliers to supply TLB hire for Geotechnical Site investigations across the Free State Province for a period of three (03) years for the Council for Geoscience. 2019-07-17 11:00 CGS- 2019- 018K
Appointment of a service provider to provide printing services for a period of three (3) years for the CCMA as and when required. 2019-07-05 11:00 CCMA/ 2018/ 011- COPS
Appointment of a service provider to render Employee Health and Wellness Programme Services, to the South African Weather Services for a period of three (3) years 2019-07-05 11:00 SAWS- 193/ 19
Appointment of a service provider for the provision of a cloud based Information Technology Service Management (ITSM) (Service Desk) solution for the CCMA for a period of Three (3) Years. 2019-07-05 11:00 CCMA/ 2018/ 43AICT
Appointment of a panel of Recruitment Agencies for the South African Weather Services for a period of three (3) years 2019-07-05 11:00 SAWS- 195/ 19
Appointment of a professional service provider to render a 24 hour security service for College of Cape Town for the period of three (3) years 2019-07-05 11:00 CCT- 03/ 2019
Provisioning of Microsoft Open Value Subscription for educational Solution for the NSG for a period of three years. 2019-07-05 11:00 NSG/ BID/ 02/ 2019/ 20
Renovations to the Nelson Mandela Academic Laboratory at the National Health Laboratory Services (NHLS) 2019-07-11 11:00 RFB017- 19- 20
Appointment of a Service Provider to Manage the Monthly Maintenance of Chainsaws, Supply and Deliver Two-Stroke Fuel and Chainsaw Oil to the Three Debushing Projects Sites Namely: Portion 7 Leeuwkraal 184jr, Portion 9 Leeuwkraal 184jr and Portion 12 Leeuwkraal 184jr City of Tshwane Metropolitan Municipality for a period of 6 months 2019-07-05 11:00 DRDLR- PSSC GP- 0005(2019/ 2020)
Port Elizabeth: Motherwell Magistrates Court: Provision of Horticultural/Gardening Maintenance Services for a Period of Twenty Four (24) Months. 2019-07-09 11:00 PEH04/ 2019
Supply and delivery of a portable screening/diagnostic audiometer: for various institutions: once-off 2019-07-04 11:00 ZNB 9661/ 2019- H
The provision and installation of electrical points in the new Cape Town Weather Office, in consultation with the Municipal approved building plans. 2019-07-05 11:00 SAWS- 184/ 19


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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