Opportunity Issue 98

ADVISORY SERVICES
Understanding Government’s
Tendering Process
Tendering and procurement is a uniform process
and tender forms are standardised.
The tendering process in government is primarily
driven by instructions found in the Constitution and 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. It introduces a preferential point
system, which is either the 80-20 equation for tenders with a
value of below R50-million or the 90-10 equation for tenders
with a value of above R50-million. 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
which is applicable to organs of state above local government,
or the Municipal Finance Management Act (MFMA) and Supply
Chain Management Regulations, which govern the process at local
authority level, which could be a municipality, a water board or
even a zoo or a museum.
Committee system
The regulations of the PFMA and MFMA prescribe a committee
system, which must be implemented to manage the whole of
the tender process. Committee members are 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 on whether it is a tender for purchases
or works.
The next structure is the Bid Evaluation Committee (BEC), which
is tasked with conducting a technical evaluation on all valid,
Gerrit Davids
qualified and responsive tenders, either by 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.
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
contract on behalf of the organ of state with the successful bidder.
According to Gerrit Davids, Lead Advisor at tendering agency
TaranisCo Advisory, Tendering and procurement within the
government sphere is a uniform process and tender forms are
standardised, as issued by National Treasury. Bidders should be aware
that, irrespective of 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 they have a
constitutional right to object, lodge a dispute or an appeal, if they are
unhappy with such decisions,” says Davids.
TaranisCo Advisory CC
Mobile: +27 (0) 82 496 1657 | E-mail: gerrit@taranisco.co.za | Website: www.taranis.co.za
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