On 10 March 2022, the draft Preferential Procurement Regulations in terms of Section 5(2) of the Preferential Procurement Policy Framework Act of 2000 (“the Act”), were published for public comment. Written comments must be submitted by 11 April 2022.
The draft regulations propose to prescribe:
a) the threshold amounts in which the 80/20 and 90/10 preference point systems must be used, together with the formula to be applied; and
b) other matters necessary or expedient in order to achieve the objects of the Act.
Regulation 3 of the draft regulations provides that an organ of state, in its tender documents, must stipulate the preference point system applicable to the tender and any envisaged goal in terms of Section 2(1)(d) and (e) of the Act.
If it is unclear whether the 80/20 or 90/10 preference point system applies:
a) in the case of a tender to generate income or to dispose of or lease assets, the highest acceptable tender; or
b) in the case of any other tender, the lowest acceptable tender, must be used to determine the applicable preference point system.
In the case of acquisition of goods or services with a Rand value between R 30 000 to R 50 million, the formula to be used to calculate the points out of 80 for price inclusive of all taxes is as follows:
Pmin )
Ps = Points scored for price of tender under consideration;
Pt = Price of tender under consideration; and
Pmin = Price of lowest acceptable tender.
A maximum of 20 points may be awarded to a tenderer for the specified goals envisaged in section 2(1)(d) and (e) of the Act. The contract must be awarded to the tenderer scoring the highest points.
The following formula must be used to calculate the points out 90 for price in respect of a tender with a Rand value above R50 million, inclusive of all applicable taxes:
Pmin )
A maximum of 10 points may be awarded to a tenderer for the specified goals envisaged in section 2(1)(d) and (e) of the Act. The contract must be awarded to the tenderer scoring the highest points.
If two or more tenderers score an equal total number of points, the contract must be awarded to the tenderer that scored the highest points for specific goals. If two or more tenderers score equal total points in all respects, the award must be decided by the drawing of lots.
A contract may be awarded to a tenderer that did not score the highest points only in accordance with section 2(1)(f) of the Act. Section 2(1)(f) contemplates objective criteria in addition to those contemplated in Section 2 which justifies the award to another tenderer.
Remedies are available in terms of Regulation 10 to an organ of state where false information is submitted by a tenderer. Upon discovering that false information has been submitted, the organ of state must:
a) inform the tenderer accordingly;
b) give the tenderer an opportunity to make representations within 14 days as to why:
(i) the tender submitted may not be disqualified or, if the tender has already been awarded to the tenderer, the contract should not be terminated in whole or in part; and
(ii) the organ of state should not restrict the tenderer from conducting any business for a period not exceeding 10 years with any organ of state.
After considering the representations referred to in subregulation (1)(b), the organ of state may:
(a) if it concludes that such false information was submitted by the tenderer, disqualify the tenderer or terminate the contract in whole or in part; and if applicable, claim damages from the tenderer;
(b) if it concludes that the tenderer must be restricted, restrict the tenderer from doing business with any organ of state for a period not exceeding 10 years.
An organ of state must, within five working days—
(a) inform the National Treasury, in writing, of any action taken; and
(b) if it decides to restrict a tenderer, request the National Treasury to publish the name of the tenderer in its list of restricted suppliers.
The National Treasury must, within three working days after receiving a request in terms of subregulation (3)(b), publish the name of the tenderer in its list of restricted suppliers.
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