The Office of the Chief Procurement Officer in the National Treasury has published draft new preferential procurement regulations, which propose far-reaching changes to the way tenders are adjudicated.

The revisions, which are open for public comment, are reportedly designed to assist in ensuring at least 30% of government procurement is sourced from small, medium-sized and microenterprises (SMMEs), cooperatives, township and rural enterprises and other targeted groups.

A key proposed change would be to raise the price threshold to R100-million for the application of the current 80/20-preference point system for tenders with a rand value of between R30 000 and R1-million. Under the system, 80 points are allocated for the lowest price and a maximum of 20 points are earned based on the supplier’s broad-based black economic–empowerment (BBBEE) status.

“The draft regulations propose that this threshold for the application of the 80/20 system be increased to R100-million to further stimulate the development of small enterprises.”

Likewise, it proposed that the threshold for the current 90/10-point system, which applies for tenders above R1-million, be applicable only for tenders above R100-million.

The draft changes to the Preferential Procurement Regulations of 2011 also proposed that it be “compulsory to sub-contract a minimum of 30% of the value of the contract for all contracts above R30-million to further develop emerging suppliers”.

That 30% portion should be subcontracted to one or more black female-owned exempted microenterprises (EMEs), or one or more black youth-owned EMEs, or one or more black-owned EMEs, or one or more qualifying small business enterprises, or one or more small business, as defined in the National Small Business Act.

The draft regulations also outline a requirement for prequalification criteria based on BBBEE levels of and proposes that a tender failing to meet the prequalification criteria will not be accepted.

The draft regulations also introduce “objective criteria” to be taken into account after price and preference have been evaluated.

“The organs of state that intend using the objective criteria on evaluation of tenders will be required to indicate in the advertisement of such tenders that the tender will be subject to further evaluation in terms of objective criteria over and above the 80/20 or 90/10 preference point system,” The National Treasury said.