Most people, I encounter are conditioned to believe, that in order to win a contract from government, they only have to focus on completing the required forms and ‘bobs your uncle’, they will be in it, to win it.
Also, the majority of people submitting tenders are also of the view that their price will win it for them, which is far from the truth, in the sense that even, a bidder who has scored third best on the score sheet, could be awarded a contract, in certain circumstances.
The biggest misunderstanding in tendering is that all you have to do, to win a tender, is to complete the form and submit it before the closing date.
Many bidders are not even aware of the host of “Disqualifiers” found in the tendering process, which are prescribed by the more than 50 different pieces of legislation governing the award of contracts within the public sector.
Public sector tendering is governed by the Constitution, followed by the Public Finance Management Act (PFMA), the Municipal Finance Management Act (MFMA), the Preferential Procurement Policy Framework Act (PPPFA), the BEE Act of 2003 and a host of other enabling pieces of legislation, applicable to the process.
Despite the recent Supreme Court of Appeal ruling, declaring the Preferential Procurement Policy Framework Act Regulations of 2017 as invalid, albeit the judgement was suspended for 12 months, these rules contain numerous “Disqualifiers”, which most bidders are not even aware of.
The Regulations allow for government to apply a “Pre-Qualifying Criteria”, which requires compulsory submission of proof of a bidder’s B-BBEE status, Disqualification under the Functionality Evaluation methodology, the limitation of the “25% Sub-Contracting Rule”, Local Production and Content thresholds, compulsory sub-contracting for contracts over R30m and rules on sub-contracting after the award of a contract; etc.
These Regulations also prescribe that government is entitled to cancel an awarded contract, in “whole or in part”, where a bidder, even if it was by mistake, submitted information, which misrepresents their actual status in terms of e.g. their B-BBEE status, tax affairs, joint venture status, sub-contracting agreements; etc.
Government is also entitled to penalise a successful bidder with up to 10% of the value of a contract, where the supplier has gone and sub-contract a portion of the contract without disclosing it, to the organ of state.
Further, where suppliers are found guilty of any wrong doing in the tender process, whether it is pre or post the award of a contract, an organ of state is obliged to inform National Treasury and the supplier may be disbarred from getting government contracts for a period of up to 10 years.
In essence, we encourage bidders to government contracts, to make a serious effort to up skill their knowledge around the “Disqualifiers” in the tender process, which may potentially eliminate their bids from consideration.
Since, legislation governs the tender process from start to end, it becomes incumbent on bidders to firstly, get to know what the applicable regulations are, and secondly, comply with it when compiling their bid documents.
In the final analysis, one could argue, “What is the use, where you’ve proposed the best product or service and price respectively, if you are not compliant with all these regulations?”
TaranisCo Advisory CC
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Web Site: www.taranis.co.za