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.
Labels 2018-10-31 11:00 ZNQ: 275 / 2018/ 19
The Appointment of a Service Provider for the purchasing, delivery and commisioning of the Protein/Nitrogen Analyser in the analytical services north laboratory in Pretoria for the Department of Agriculture, Forestry and Fisheries. 2018-11-02 11:00 4.4.12.2/ 22/ 18
C1114.18: Routine road maintenance on TR16/8, TR16.9, TR16/10 and MR606 Near Murraysburg. 2018-11-20 11:00 S092/ 18
Major Service to Theatre Tables X 02 2018-10-26 11:00 ZNQ 301/ 2018
CATHSSETA is seeking to appoint suitably qualified and experienced service providers with applicable expertise and experience for the following competitive Bid: Panel of Office Consumables 2018-11-20 11:00 RFP Number CATHS/ POC/ 015/ 2018
The regravelling of D1129 and L1459- in The Vulindlela RRTF area - Grade 3CE 2018-11-12 11:00 ZNT373T/ 3/ 3/ 222/ 9289/ 2018T
Kwazulu-Natal: Department of Health: KwaMashu: KwaMashu Community Health Centre: Repairs to latent defects 2018-11-19 11:00 ZNTD 04179W
CATHSSETA is seeking to appoint suitably qualified and experienced service providers with applicable expertise and experience for the following competitive Bid: Project Management for Qualification Development 2018-11-20 11:00 RFP Number CATHS/ PMQD/ 013/ 2018
The regravelling of L753 And L2073 - in The Vulindlela RRTF area - Grade 3CE. 2018-11-12 11:00 ZNT373T/ 3/ 3/ 225/ 1264/ 2018T
The regravelling of L805 And L777 (km 0 -2.02km) & (km 0 -0.51km) - in The Vulindlela RRTF Area - Grade 2CE. 2018-11-12 11:00 ZNT373T/ 2/ 3/ 222/ 9280/ 2018T
10 X Boardroom Chairs; 10 X 4 Drawer Lockable Filing Cabinet 2018-10-26 11:00 ZNQ. NO: 296/ 06/ 18- 19
The road safety projects in The KZ222 & KZ223 Zone – in The Vulindlela RRTF Area- Grade 3CE. 2018-11-12 11:00 ZNT373T/ 3/ 3/ 222- 3/ 1209- 2/ 2018T
The road safety projects in The KZ224 & KZ222 Zone – in the Vulindlela RRTF area - Grade 3CE. 2018-11-12 11:00 ZNT373T/ 3/ 3/ 222- 4/ 1209- 1/ 2018T
Appointment of a panel of Travel Management Companies for the provision of travel, accommodation and related services for Northern Cape Department of Education for a period of 36 months. 2018-11-09 11:00 NC/ DE/ 002/ 2018- 2019
Provision of Routine and Safety Maintenance on various Roads, Within Zone 1 Underberg -Underberg Area Office -Grade 8CE 2018-11-16 11:00 ZNT 4022/ 16T
Supply, pack and deliver Life Sciences equipment addressing Grades 10 -12 to seven (7) selected schools 2018-11-09 11:00 B/ WCED 2463/ 18
Gardening Service for the Castle of Good Hope as per specification C/G/H/01/2018 for a period of three (3) years. 2018-11-14 11:00 SPSC- B- 049- 2018
Provision of Routine and Safety Maintenance on various Roads Within Zone 3 -IXopoArea Office -Grade 8CE. 2018-11-16 11:00 ZNT 3999/ 16T
Rendering of a Cleaning Contract at the Military Acadamy, Saldanha for the period of one (1) year as per User Requirement Specification MILACAD/01/18 2018-11-13 11:00 SPSC- B- 048- 2018
The province of KwaZulu-Natal, Department of Transport, invites tenders from Vukuzkhe Contractors for the Construction of 2.10 kms of Local Road A996 Contract 1 in the Nongoma Municipality within the Zululand District. 2018-11-27 11:45 ZNT373/ C265/ 2021/ S/ 1/ 2018T

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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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