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.
Appointment of Quality Surveyor: Renovations to M Block: R K KHan’s 2019-01-23 11:00 ZNB 5753/ 2018- H
The South African National Roads Agency SOC Limited (SANRAL) invites tenders for the provision of Consulting Engineering Services for the Routine Road Maintenance of National Route 8 Sections 6 from from Groblershoop to Rooisand and National Route 10 Sections 8 to 11 from Omdraai to Boegoeberg. 2019-01-28 14:00 X.005- 029- 2019/ 1F
The South African National Roads Agency SOC Limited (SANRAL) invites tenders for the provision of Consulting Engineering Services for the Routine Road Maintenance of National Route 2 sections 5 to 7 from Riet Kuil Outspan to Rondeheuwel. 2019-01-28 14:00 N.002- 057- 2019/ 1F
The South African National Roads Agency SOC Limited (SANRAL) invites tenders for the provision of Consulting Engineering Services for the Routine Road Maintenance of National Route 10 sections 5 to 8 from Kopieskraal to Omdraai Vlei. 2019-01-28 14:00 N.010- 058- 2019/ 1F
The South African National Roads Agency SOC Limited (SANRAL) invites tenders for the provision of Consulting Engineering Services for the Routine Road Maintenance of National Route 12 sections 7 to 9 from Pretorius Baken to Klipdrift. 2019-01-28 14:00 N.012- 079- 2019/ 1F
The South African National Roads Agency SOC Limited (SANRAL) invites tenders for the provision of Consulting Engineering Services for the Routine Road Maintenance of National Route 8 Sections 8 &9 from Vaal River to NC/FS Border, National Route 12 Sections 9 to 11 from Riet River to NC/NW Border and National Route 18 Section 1 from Warrenton to NC/NW Border. 2019-01-28 14:00 X.005- 030- 2019/ 1F
Appointment of a service provider for BPM Solution for South African Tourism 2019-01-07 12:00 SAT137/ 18
Appointment of a suitably qualified Service Provider for the Development, Implementation and Management of forty (40) Business Accelerator Programme for National Gazelles for a period of twenty four (24) months 2019-01-18 12:00 RFP/ T 10- 2018/ 19
The South African National Roads Agency SOC Limited (SANRAL) invites tenders for the provision of Consulting Engineering Services for the Routine Road Maintenance of National Route R33 from Mpumalanga/Kwazulu-Natal Provincial Boundary to Mkhondo Municipal Boundary and the N2 from Mpumalanga/Kwazulu-Natal Provincial Boundary to Mkhondo Municipal Boundary 2019-01-30 14:00 NRA X.002- 091- 2019/ 1F
The South African National Roads Agency SOC Limited (SANRAL) invites tenders for the provision of Consulting Engineering Services for the Routine Road Maintenance of National Road R35 from Lekwa municipality border through Bethal to Steve Tshwete municipal border, R38 from Bethal to Msukaligwa municipality border, N17 from Gauteng / Mpumalanga border through Bethal to Msukaligwa municipality border. 2019-01-30 14:00 NRA X.002- 096- 2019/ 1F
The South African National Roads Agency SOC Limited (SANRAL) invites tenders for the provision of Consulting Engineering Services for the Routine Road Maintenance of National Route 1 sections 1 to 4 from Joostenbergvlakte to Constable. 2019-01-28 14:00 N.001- 014- 2019/ 1F
The South African National Roads Agency SOC Limited (SANRAL) invites tenders for the provision of Consulting Engineering Services for the Routine Road Maintenance of National Route 10 sections 11 to 12 from from Boegoeberg to Nakop Border and National Route 14 Sections 4 to 5 from Olyvenhoutsdrift to Zonderhuis. 2019-01-28 14:00 X.005- 028- 2018/ 1F
The South African National Roads Agency SOC Limited (SANRAL) invites tenders for the provision of Consulting Engineering Services for the Routine Road Maintenance of National Route 2 sections 7 to 8 from from Rondeheuwel to Natures Valley. 2019-01-28 14:00 N.002- 078- 2019/ 1F
Independent Panel of Researchers 2019-01-21 12:00 FFC/ 01/ 08/ 2018q
Establishment of a panel of Oracle Specialized Partners for the implementation of the Integrated Financial Management System (IFMS) for National Treasury for Period of three (3) years 2019-01-30 11:00 RFB 1859- 2018
The acquisition, maintenance, support and related services for security administration and reporting solution supporting Z/OS security server (RACF) for a period of thirty six (36) months 2019-01-25 11:00 RFP 53/ 2018
Appointment of a service provider to provide Board Secretariat services to the National Arts Council for a period of three (3) years on the 80/20 PPPFA. 2019-01-29 11:00 NAC- 04- 2018- 19
Appointment of a service provider to offer lease space to the Municipal Demarcation Board (MDB) in the area surrounding Pretoria for a period of five (5) years, commencing 01 July 2019. 2019-01-25 11:00 MDB007- 2018/ 2019
Appointment of a service provider to render professional services (sponsorship sourcing management) for GovTech 2019 2019-01-15 11:00 RFB 1870- 2018
Supply of vulnerability assessment tool including maintenance and support for Office of the Premier 2019-01-15 11:00 RFB1821/ 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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