The document discusses South Africa's Preferential Procurement Policy Framework Act and regulations, which aim to promote participation of targeted groups in public tenders. It outlines challenges small businesses face in accessing tenders, such as lack of skills, resources, and information. Interventions like training and consortium-building are proposed to address these challenges. The tender procurement process and criteria for evaluating bids based on price and B-BBEE score are also explained. Examples calculate tender prices including markups and taxes. Overall, the document provides information on South Africa's preferential procurement system and support for small businesses to participate in public tenders.

1. Preferential Procurement
 Enabling Legislation: The National Government has
introduced an intervention to foster active participation of
targeted groups in the economic mainstream through public
tenders at all levels including organs of the state.
 PPPFA : Preferential Procurement Policy Framework Act No 5
of 2000
• The Act was in line with Preferential Procurement
Regulations 2001
• The above has been repealed and replaced by Preferential
Procurement Regulations 2011 with effect from 07 December
2011 in line with Broad Based Black Economic Empowerment
1

2. Challenges and constraints
 Lack of training
 Lack of skill
 Lack of information
 Lack of networking
 Lack of resources
2

3. Proposed interventions
 Practical hands-on training
 Weekly sessions
 Formation of consortia by SMMEs
 Formation of joint ventures
 Formation of partnerships
 Monitoring and evaluation of submitted tenders
3

4. The Process
 Identification of tenders
 Request for tender documents
 Identification of suppliers
 Request for quotations
 Compliance –Tax clearance certificates
 Pricing of document
 Calculation of preference points
 Completion of document
 Submission of tender
4

5. BID PRICE POINTS
 90/10
 90 points based on lowest responsive bid prices in excess
of R1m
 80/20
 80 points based on lowest responsive bid prices up to
R1m
5

6. BID PRICE POINTS
 90/10
90 points
R1m
0
80 points
 80/20
Formula Ps = 80/90 1- Pt – Pmin
Pmin
6

7. BBBEE ADJUSTED PIONTS
BBBEE Status level of Contributor Number of Points Number of Points
80/20 90/10
1 20 10
2 18 9
3 16 8
4 12 5
5 8 4
6 6 3
7 4 2
8 2 1
Non Compliant contributor 0 0
7

8. POINTS ALLOCATION
BIDDER PRICE PRICE BBBEE BBBEE TOTAL
POINTS CONTRIBUTOR POINTS POINTS
LEVEL
A
B
C
D
E
F
8

9. BBBEE LEVELS POINTS
CONTRIBUTION LEVEL QUALIFICATION
Level One Contributor ≥ 100 points
Level Two Contributor ≥ 85 points but < 100 points
Level Three Contributor ≥ 75 points but < 85 points
Level Four Contributor ≥ 65 points but < 75 points
Level Five Contributor ≥ 55 points but < 65 points
Level Six Contributor ≥ 45 points but < 55 points
Level Seven Contributor ≥ 40 points but < 45 points
Level Eight Contributor ≥ 30 points but < 40 points
Non Compliant Contributor < 30 points
9

10. SITES FOR TENDERS
 www.treasury.gov.za –free
 www.tenderscan.co.za – subscription
 www.tradeworld.net – subscription
 www.dailytenders.co.za – subscription
 www.onlinetenders.co.za – subscription
 www.info.gov.za/documents/tenders/index.htm - free
10

11. SITES FOR SUPPLIERS
 www.safindit.co.za
 www.findsa.co.za
 www.sayellow.co.za
 www.easyinfo.co.za
 www.sabs.co.za
 www.specifile.co.za
 www.kellysearch.com
 www.africatrade.co.za
 www.infomine-africa.com
11

12. EXERCISE 1
Company A responds to a tender to supply hospital
equipment and receives a quotation of R750 000
excluding value added tax. Calculate the price if the
company adds mark up of 10% and value added tax of
14%
12

13. EXERCISE 1
Company A responds to a tender to supply hospital
equipment and receives a quotation of R750 000
excluding value added tax. Calculate the price if the
company adds mark up of 10% and value added tax of
14%
Cost price =R750 000,00
13

14. EXERCISE 1
Company A responds to a tender to supply hospital
equipment and receives a quotation of R750 000
excluding value added tax. Calculate the price if the
company adds mark up of 10% and value added tax of
14%
Cost price =R750 000,00
Mark up 10% = R 75 000,00
14

15. EXERCISE 1
Company A responds to a tender to supply hospital
equipment and receives a quotation of R750 000
excluding value added tax. Calculate the price if the
company adds mark up of 10% and value added tax of
14%
Cost price = R750 000,00
Mark up 10% = R 75 000,00
Total price (exc) = R825 000,00
15

16. EXERCISE 1
Company A responds to a tender to supply hospital
equipment and receives a quotation of R750 000
excluding value added tax. Calculate the price if the
company adds mark up of 10% and value added tax of
14%
Cost price =R750 000,00
Mark up 10% = R 75 000,00
Total price (exc)= R825 000,00
VAT = R115 500,00
16

17. EXERCISE 1
Company A responds to a tender to supply hospital
equipment and receives a quotation of R750 000
excluding value added tax. Calculate the price if the
company adds mark up of 10% and value added tax of
14%
Cost price =R750 000,00
Mark up 10% = R 75 000,00
Total price (exc)= R825 000,00
VAT = R115 500,00
Total price (incl) = R940 500,00
17

18. EXERCISE 2
Company B responds to a tender to supply farming
equipment and receives a quotation for R969 000 including
value added tax. Calculate the price if the company adds
mark up of 15% and value added tax of 14%.
18

19. EXERCISE 2
Company B responds to a tender to supply farming
equipment and receives a quotation for R969 000
including value added tax. Calculate the price if the
company adds mark up of 15% and value added tax
of 14%.
Cost Price = R969 000,00
19

20. EXERCISE 2
Company B responds to a tender to supply farming
equipment and receives a quotation for R969 000
including value added tax. Calculate the price if the
company adds mark up of 15% and value added tax
of 14%.
Cost Price = R969 000,00
Less Vat (Input) = R 119 000,00
20

21. EXERCISE 2
Company B responds to a tender to supply farming
equipment and receives a quotation for R969 000
including value added tax. Calculate the price if the
company adds mark up of 15% and value added tax
of 14%.
Cost Price = R969 000,00
Less Vat (Input) = R 119 000,00
= R850 000,00
21

22. EXERCISE 2
Company B responds to a tender to supply farming
equipment and receives a quotation for R969 000
including value added tax. Calculate the price if the
company adds mark up of 15% and value added tax
of 14%.
Cost Price = R969 000,00
Less Vat (Input) = R 119 000,00
= R850 000,00
Mark Up 15% = R127 500,00
22

23. EXERCISE 2
Company B responds to a tender to supply farming equipment
and receives a quotation for R969 000 including value added
tax. Calculate the price if the company adds mark up of 15%
and value added tax of 14%.
Cost Price = R969 000,00
Less Vat (Input) = R 119 000,00
= R850 000,00
Mark Up 15% = R127 500,00
Total = R977 500,00
23

24. EXERCISE 2
Company B responds to a tender to supply farming equipment
and receives a quotation for R969 000 including value added
tax. Calculate the price if the company adds mark up of 15%
and value added tax of 14%.
Cost Price = R969 000,00
Less Vat (Input) = R 119 000,00
= R850 000,00
Mark Up 15% = R127 500,00
Total = R977 500,00
Add Vat (Output) = R136 850,00
24

25. EXERCISE 2
Company B responds to a tender to supply farming equipment
and receives a quotation for R969 000 including value added
tax. Calculate the price if the company adds mark up of 15%
and value added tax of 14%.
Cost Price = R 969 000,00
Less Vat (Input) = R 119 000,00
= R 850 000,00
Mark Up 15% = R 127 500,00
Total = R 977 500,00
Add Vat (Output) = R 136 850,00
Total price =R 1 114 350,00
25

26. Vat Payable
Vat payable = Output tax less Input tax
Formula = Price x rate/ 100 + rate
Output = R 1114350,00 x 14
114
R 136 850,00
Input = R 969 000,00 x 14
114
R 119 000,00
Vat payable = R 136 850,00 - R 119 000,00
R 17 850
26

27. Tools required
 Laptop
 Access to internet – 3G data card
 Data projector
 Training venue
 Will to learn
27

28. Thank You
28

29. Sello & Associates
booksysello@mweb.co.za
f www.facebook.com/tender.opportunities
www twitter.com/BooksySello
Mobile : 0847976212 Fax : 0865152849
29