New regulationsAdministrative law - public procurement - new regulations


The Office of the Chief Procurement Officer (OCPO) recently circulated new Preferential Procurement Regulations for public comment.

According to a media statement issued by the National Treasury, the main changes are as follows:

  • It is proposed that the threshold for the 80/20 preference point system be increased from R 1 million to R 100 million.
  • The threshold for the 90/10 preference point system would be applicable to tenders above R 100 million.
  • The draft regulations make it compulsory to sub-contract a minimum of 30% of the value of a contract to a black female-owned Exempted Micro Enterprise (EME), or a black youth-owned EME, or a black-owned EME, or a Qualifying Small Business Enterprise (QSE), or a small business (as defined in the National Small Business Act, 1996).
  • It is proposed that a procuring entity may use pre-qualification criteria, based on B-BBEE levels of contribution, e.g. to qualify, a bidder would require a stipulated minimum B-BBEE status level.
  • The use of objective criteria is proposed, to be considered after the evaluation of price and preference, and provided that the criteria have been indicated beforehand in the tender advertisement. The criteria include sub-contracting a minimum of 30% of the value of a contract to EMEs (as already mentioned), local co-operatives, township or rural enterprises, or SMMEs.

The draft regulations are intended for the development of targeted groups, such as SMMEs, co-operatives, township and rural enterprises.

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