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.
Construction of an ICT Data Centre Room 2018-11-12 11:00 007– 2018/ 2019
Construction of Sidewalks on P565/P37 in the Amajuba District. 2018-11-15 11:00 C253/ 1819/ SW/ 562
Refurbishment of units 1 & 4 Electrostatic Precipitation (ESP) at Matla Power Station. 2018-11-20 10:00 MPPPSC001093
Ntabankulu CHC in Ntabankulu - Alfred Nzo District municipality: Refurbishments 2018-11-21 11:00 SCMU3-18/19-0369-HO
Request for proposal for the lease and development for a portion of erf 1406 (The Heads, Knysna). 2018-12-14 12:00 T34/2018/19
Appointment of a service provider for procurement and implementation of an E- tender platform for the DBSA. 2018-11-02 10:00 RFP264/2018
Construction of Turf Cricket Pitch at De Wet Sports Ground 2018-10-26 11:00 287993
Appointment of a service provider to provide suitable office accommodation and parking facilities for a lease period of three (03) years for the NHBRC Port ELIZABETH office. 2018-11-09 11:00 NHBRC 09/2018
Appointment of a service provider to provide suitable office accommodation and parking facilities for a lease period of three (03) years for the NHBRC East London Office. 2018-11-09 11:00 NHBRC 08/2018
Investigation and report on options for provision of tourism function in terms of section 76 & 78 of the municipal systems act 2018-11-21 12:00 T 32/2018/19
Appointment of a service provider to provide suitable office accommodation and parking facilities for a lease period of three (03) years for the NHBRC Durban office. 2018-11-09 11:00 NHBRC 04/2918
Cultural Cohesion, 8 December 2018 and Youth Day, 16 June 2019 events - Event planning, marketing, coordination and implementation 2018-11-02 12:00 T 33/2018/19
Supply and delivery of ammunition 2018-10-30 11:00 FQ/SM : 45/19
Call for Expression of Interest Appointment of a service provider to set up and manage A UJ online brand shop. 2018-10-21 16:00 RFPUJ 35/2018
Request for proposal for lease and development for a portion of Erf 1406 (The Heads, Knysna). 2018-12-14 12:00 T 34 OF 2018/19
Proposed cultural village fencing in Franklin. 2018-11-01 12:00 GKM 13-18/19
Renovations of Bhongweni Hostel. 2018-11-02 12:00 GKM 42-17/18
Minor building works at house 04 Maraisburg. 2018-11-01 12:00 RFQ06/10/020
Software Audit for National and Provincial Elections (NPE) Results Systems 2019. 2018-11-02 11:00 IEC/ICT-01/2017
Catering requested for the Ward Committee Summit at Paarl East Thusong Centre on 03 November 2018 2018-10-25 10:00 DSS0003912

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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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