New Government Procurement Regulations
 The Minister of Finance has published new regulations in terms of the Preferential Procurement Policy Framework Act (“PPPF Act”). These were published in the Government Gazette on 8 June 2011 and will take effect from 7 December 2011. This is a short summary of the new contents of the regulations only.
Evaluation of Tenders on Functionality
1.Recently the Pietermaritzburg High Court declared the current regulation invalid that allows for splitting the points for price between functionality and price.
2.The new regulations allow for tenders to record if the tender will be evaluated on functionality.
3.The criteria for measuring functionality must be objective.
4.The tender must clearly specify the:
(a) evaluation criteria for measuring functionality;
(b) weight of each criterion;
(c) applicable values; and
(d) minimum qualifying score for functionality.
5.A tender that does not achieve the minimum qualifying score for functionality will not be regarded as an acceptable tender and will not be evaluated further.
6.For the same reason that the existing regulation relating to functionality was struck down by the court, this regulation may also be considered invalid until the PPPF Act is itself amended accordingly.
Preference Points System and B-BBEE Status
1.The 80/20 Preference Points System now applies to tenders up to a Rand value of R1 000 000.00. The 90/10 Preference Points System will apply for tenders with a Rand value above R1 000 000.00.
2.The 20 or 10 points will now be awarded to a tenderer based on its B-BBEE status level only.
3.Tenderers must submit an original and valid B-BBEE Status Level Verification Certificate or a certified copy.
4.A trust, consortium or joint venture must submit a B-BBEE Status Level Certificate. A consolidated B-BBEE scorecard for the group structure must be prepared for every separate tender.
5.This will pose time problems for joint ventures who will have to ensure that an accredited agency has audited and prepared a certificate in respect of each separate tenderer.
6.Tenderers are not entitled to be awarded points for their B-BBEE Status Level if they intend subcontracting more than 25% of the value of the contract to any other enterprise that does not qualify for the same BBEE points as the tenderer.
7.A tenderer awarded a contract may not subcontract more than 25% of the value of the contract to any enterprise that does not have an equal or higher BBEE Status Level.
Cancellation of Tenders
1.A tender may be cancelled if:
(a) due to changed circumstances, there is no longer a need for the services, works or goods requested; or
(b) funds are no longer available;
(c) no acceptable tenders are received.
2.The decision to cancel must be published in the Government Tender Bulletin or the media in which the original tender invitation was advertised.
3.The decision to cancel a tender is an administrative decision and may be challenged.
Local Production and Content
1.Tenders in the case of designated sectors may specify minimum thresholds for locally produced goods and content.
2.Specific directives will be issued by National Treasury in consultation with the Department of Trade and Industry in this regard.
3.Such tenders will be adjudicated on functionality and minimum threshold for local production and content in the first stage and those that meet these requirements will be evaluated at the second stage on price and B-BBEE.
Tax Clearance
A tender may not be awarded to a tenderer whose tax matters have not been declared by SARS to be in order as demonstrated by a tax clearance certificate.
Richard Hoal
Partner
Cox | Yeats Attorneys
Tel: 031 536 8500 |
