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The Tendering Process in South Africa

The Tendering Process in South Africa

A tender refers to the process whereby governments invites bids for large projects that must be submitted within a prescribed deadline. During this process, an offer, bid, proposal or expressing interest in response to an invitation are made.

It is important for all potential bidders to familiarize themselves with the tender process and principles in South Africa.

The process includes attending briefing sessions, reading the whole tender document, ensure you take note of the closing date and closing time of the tender, completion of all the documents in the original bid document, and attach all the compulsory documents.

How is a tender evaluated?

  1. Functionality

Functionality is where you advertise your company so make sure you do it properly. It is the most critical part of any tender. Familiarize and understand exactly what is required in the Functionality part of the tender. Read the scope of the tender with care and respond to the questions asked.

  1. Price

Price will be the determining factor in winning the tender. At the end of the day, all that buyers want is to procure the best product at the best price.

  1. BEE Level

All tender responses will be evaluated on its Broad-Based Black Economic Empowerment (B-BEE) level. Your B-BBEE score will always be taken into account to determine the outcome of the tender award.

There are 2 preference point systems for the acquisition of goods or services for Rand value equal to or above R30 000 and up to R50 million (80/20 point system); and Rand value above R50 million (90/10 point system). Failing to submit proof of your B-BBEE level as being non-compliant does not disqualify the tenderer. He will only be able to score points out of 80 or 90 for the price and 0 (zero) out of 20 or 10 for B-BBEE. No points may be scored if the tenderer indicates that he is going to sub-contract more than 25% of the contract value to anyone not scoring at least equal points the tenderer will qualify for. The tender must be awarded to the tenderer scoring the highest points. Prices must also be market-related.

Having an equal score between 2 tenderers on the total number of points, the tender must be awarded to the 1 with highest points for B-BBEE. When having an equal total score between 2 tenderers and equal preference points for B-BBEE, the tender must be awarded to the tenderer with the highest score for functionality, if part of the evaluation process. Scoring equal in all respects, the award must be decided by drawing of lots.

 

ABOUT THE AUTHOR

Dominique van Deventer obtained his LLB qualification from the University of the Free State and is currently a SEESA BEE legal advisor. He has been working for SEESA for 37 months.

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