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 service provider for provision of internal audit services for a period of three (3) years. 2018-12-21 11:00 HSRC/ 11/ 2018/ 19
Physical verification of all spaza shops in the Gauteng Region 2019-01-18 11:00 GEP003/ SPAZASHOPSPROJECT/ 18
Procurement of Checkpoint Firewall including maintenance and support for three years for the Office of the Premier 2019-01-15 11:00 RFB 1823 2018
Child and Youth Care training for Gauteng Department of Social Development for a period of twelve months 2019-01-18 11:00 GT/ GDSD/ 166/ 2018
Maintenance of Kinross landfill site for a period of 24 months 2019-01-30 12:00 8/3/1-9/2018
Supply, install, configure and commission audio visual and video conferencing system for the Municipal Infrastructure Support Agent (MISA) including maintenance and support for a period of thirty six (36) months 2019-01-18 11:00 RFB 1865/ 2018
Catering services at Soshanguve Secur Care Centre for a period of 36 months for Gauteng Department of Social Development 2019-01-18 11:00 GT/ GDSD/ 164/ 2018
Maintenance of Secunda landfill site for a period of 36 months 2019-01-08 12:00 8/3/1- 7/2018
Hire of office accommodation for the Department of Sport and Recreation, Hluhluwe. Contract Period: 05 Years 2019-01-11 11:00 ZNT 7791 W
Request for Procurement of Check Point Software Renewal or Equivalent Firewall Security Solution for the period of three, four or five years for the Department of Agriculture, Forestry and Fisheries (DAFF). 2019-01-15 11:00 RFB 1802/ 2018
Proposal for Lamp post 2019-01-08 12:00 8/3/1-8/2018
Department of Justice & CD: JHB Magistrate Court , c/o Ntemi Piliso & Fox street: Rendering of cleaning services for a period of 24 months (EPWP) 2019-01-22 11:00 JHB.18/ 39
SANParks invite prospective bidders for the appointment of a Professional Service Provider to Conduct a Survey and Assessment of Cultural Heritage Resources, Determination of the state of Cultural Heritage, and Development of Cultural Heritage Management Plans for the Kruger National Park, Table Mountain National Park and Garden Route National Park. 2019-01-08 11:00 GNP- 018- 18
Provision of Security services for a period of 3 years (36) months region 2 (Trichardt ,Secunda evander,Kinross leslie and lebohang) 2019-01-30 12:00 8/3/1- 3/2018
Department of Justice & CD: Office the Chief Justice,188 4th Road, Noordwyk: Rendering of cleaning services for a period of 24 months (EPWP). 2019-01-15 11:00 JHB.18/ 37
Appointment of Service Provider for Actuarial Services for Khula Credit Guarantee (KCG) (Soc) Limited for period of three (03) years 2019-01-09 11:00 sefa: 30/ KCG/ 2018
Department of Justice & CD: Master of the High Court, 66 Marshall street, Johannesburg: Rendering of cleaning services for a period of 24 months (EPWP) 2019-01-15 11:00 JHB.18/ 38
Pretoria: Department of Justice and Constitutional Development: Attridgeville Magistrate Office: Installation of air conditioning system 2019-02-12 11:00 PT18/ 078
Provision of Security services for a period of 3 years (36) months region 1 (Bethal and Emzinoni) 2019-01-12 10:00 8/3/1-2/2018
The Small Enterprise Development Agency (Seda) seeks to appoint a suitably qualified and experienced Service Provider who will provide Seda with an in depth analysis of Small Businesses owned by Women and Youth in South Africa. 2019-01-14 12:00 T09- 2018/ 19

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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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