Explaining the new Preferential Procurement Policy Framework (Part 2)

Explaining the new Preferential Procurement Policy Framework (Part 2)
September 8, 2017 Tersia Landsberg

 A previous article looked at the new Preferential Procurement Policy Framework Act, 2000: Preferential Procurement Regulations, 2017 (PPPFA). It is very important that businesses who often participate in tender processes are aware of all the aspects and applications of the PPPFA when submitting a tender.

In Section 4 of the PPPFA it determines that when an organ of State decides to apply a pre-qualification criteria, the tender must be advertised with the specific tender conditions to ensure that certain designated groups are advanced. This means that only 1 or more of the tenderers applying for the tender, may qualify.

These tender conditions entail:

  1. Tenderer having stipulated minimum B-BBEE level of contribution.
  2. Is an Exempted Micro Enterprise (EME)/Qualifying Small Enterprise (QSE).
  3. The tenderer will sub-contract a minimum of 30% to:
    1. EME/QSE who is at least 51% or more black owned.
    2. EME/QSE who is at least 51% or more owned by black people who are youth (this is between the ages of 14 and 35).
    3. EME/QSE who is at least 51% black female owned.
    4. EME/QSE who is at least 51% owned by black people with disabilities.
    5. EME/QSE who is at least 51% owned by black people living in rural or underdeveloped areas or townships.
    6. Cooperative which is at least 51% owned by black people.
    7. EME/QSE who is at least 51% black owned by military veterans (as defined by the military veterans act).
    8. An EME/QSE.

If your tender does not meet any of these pre-qualifying criteria stipulated, your tender documents is an unacceptable tender.

Tenders evaluated on functionality

The Organ of State further needs to state whether the tender will be evaluated on functionality. The evaluation method of the functionality must be objective. If the tender is evaluated on functionality the tender documents must specify the following:

  1. The evaluation criteria measuring functionality.
  2. The points for each criterion.
  3. If any sub-criteria, the points for each of the sub-criteria.
  4. The minimum qualifying score for functionality.

The minimum qualification score for functionality for a tender must also take into account the following:

  1. Must be determined separately for each tender.
  2. May not be of such nature that it:
    1. is so low that it might jeopardise the quality of the required goods or services; or
    2. is so high that it is unreasonably restrictive.

Any points scored for functionality by the tenderer must be rounded off to the nearest two decimal places.

A tender that fails to obtain the minimum qualification score for functionality is not an acceptable tender.

Each tender that obtains the minimum qualifying score for functionality must be evaluated further in terms of price and the preference point system, as well as any objective criteria envisaged in Regulation 11 of the PPPFA.

The next article will, among other things, look at sub-contracting after a tender have been awarded as well as cancellation of a tender.

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