Monday, 07 June 2021

Understanding government’s tendering process

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Understanding government’s tendering process

The tendering process in government is primarily driven by instructions found in the Constitution and more in particular in Section 217, which prescribes that a tender system must at all times be “Fair, equitable, transparent, competitive and cost-effective.” 

It further instructs government to create a “Framework” giving preference to historically disadvantaged individuals and the Preferential Procurement Policy Framework Act (PPPFA) is a response to that instruction, by introducing a preferential point system, which is either the 80-20 equation for tenders with a value of below R50m and the 90-10 equation for tenders with a value of above R50m.  

The greater part of the point systems is always afforded to the lowest priced tender as a maximum point, whereas the smaller part is allocated for B-BBEE points, for each bidder. 

The actual procurement process is either governed by the Public Finance Management Act (PFMA) and Treasury Regulations, applicable to organs of state above local government, whereas the Municipal Finance Management Act (MFMA) and Supply Chain Management Regulations, govern the process at local authority level, which could be a municipality, a water board or even a zoo or a museum, respectively.  

The Regulations to the PFMA and MFMA respectively, prescribe a Committee System, which must be implemented to manage the whole of the tender process of, which its members are also appointed by the Accounting Officer of the specific organ of state. 

The first structure is the Bid Specifications Committee (BSC), which is tasked with approving the actual requirement of the goods and services as well as the stipulated specifications or scope of works, depending whether it’s a tender for purchases or works, per se. 

The next structure is the Bid Evaluation Committee (BEC), which is tasked to conduct a technical evaluation on all valid, qualified and responsive tenders, by either using an “apples vs. apples” approach or applying the Functionality methodology, which is a points system requiring a minimum score that must be achieved by all bids that have graduated to this stage of the process. Bidders will also be afforded points for price and for B-BBEE, respectively. 

The last structure of the system is the Bid Adjudication Committee (BAC), which will consider a shortlist of potential bidders as compiled by the BEC and has the authority to reject its recommendations, send it back for review and where in agreement, select a recommended bidder for consideration by the Accounting Officer, who will eventually contracts on behalf of the organ of state with the successful bidder. 

According to Gerrit Davids, Lead Advisor at TaranisCo Advisory, tendering agency, “Tendering and procurement within the government sphere is a uniformed process and tender forms are standardised, as issued by National Treasury and bidders should be aware that, irrespective where they tender, the process is exactly the same for all organs of state.” 

“Also, as per the prescript in Section 217, bidders have a right to access a decision made by any of these Committees and have a Constitutional right to object, lodge a dispute or an appeal, if they are unhappy with such decisions”, says Davids. 

For more information on how to submit compliant tenders to these Committees, Click Here   

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Gerrit Davids
Lead Consultant
TaranisCo Advisory CC
Web Site: http://www.taranis.co.za
Mobile. +27 (0) 82 496 1657

E-mail:  This email address is being protected from spambots. You need JavaScript enabled to view it.