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New Preferential Procurement Regulations
see the light BEE

February 2017

“My business is quite reliant on government tenders. I
understand that new procurement regulations will soon be
published which will impact on government tender processes.
How concerned should I be?”

New Preferential Procurement Regulations were published on 20
January 2017 and will come into effect on 1 April 2017, replacing the
current Preferential Procurement Regulations published in 2011 and
holding a number of significant changes for tenderers.
The 80/20 preference point system will apply to tenders with a contract
value equal to or above R30,000.00 up to R50 million. Tenders with a
contract value of up to R50 million will accordingly be evaluated by
allocating 80 points towards the pricing of goods and services and
20 points towards the B-BBEE status level of the tenderer. The 90/10
principle will apply to tenders with a contract value exceeding R50
million, with 90 points awarded for pricing and 10 points for the B-BBEE
status level of the tenderer.

As from 1 April 2017 an organ of state will be able to include certain
pre-qualification criteria in a tender in order to advance or preference
the following designated groups:

• A tenderer with a stipulated minimum B-BBEE status level;
• A tenderer qualifying as an EME (annual turnover below
R10 million) or QSE (annual turnover below R50 million);
• A tenderer subcontracting a minimum of 30% of the tender
to EME’s and QSE’s, or EME’s and QSE’s that are at least 51%
owned by black people / black woman / black youth /
black people with disabilities / black people living in rural
areas / black people who are military veterans; or
• Cooperatives which are at least 51% owned by black people.
A tenderer failing to meet the pre-qualification criteria as specified
in the tender advertisement will then be deemed an unacceptable
tender and may be disqualified.
In the case of certain designated sectors, an organ of state may be
required to only consider locally produced or manufactured goods
which meet the stipulated minimum threshold for local production.
This requirement may however also be included in the case of non-

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