On the 20 January 2017 the Preferential Procurement Regulations were published in the Government Gazette. The impact on our members doing business with Government Departments, Implementing Agents and Local Authorities will be significant.

All members should read through the two attached documents very carefully in order to ascertain the full implications for them and their business model.

GOVERNMENT GAZETTE - PREFERENTIAL PROCUREMENT (PDF)

PREFERENTIAL PROCUREMENT - MEDIA STATEMENT (PDF)

The following is a summary of the changes:

• The 80/20 preference points system is applicable on all contracts up to R 50 million.
• The 90/10 preference points system is applicable on all contracts over R 50 million.
• The sub-contracting of a minimum of 30 % of the contract value on all projects above the value of R 30 million where it is feasible to do so.

In addition to the above, most tender documents already have a local participation goal of 30% of the contract value. Members are encouraged to request lists of identified local subcontractors from the Principal Agent in order to incorporate their rates into the tender submission.

Ross Stembridge | Building Services Manager