New tendering regulations favour SMMEs

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20-02-2023
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Taranis
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With the recently promulgated Preferential Procurement Policy Framework Regulations (PPPFA) having come into effect on 16 January 2023, it now prescribes that organs of state may include preference points for specific goals inclusive of race, gender, disability, and promoting small, medium and micro-enterprises (SMMEs), respectively.

It also, affords organs of state the choice to include any programme, of the long-forgotten Reconstruction and Development Programme of 1994 (RDP), as a specific goal for preference points.

Chapter Three of the RDP deals with the various transformation interventions government may prioritise to transform the economic landscape of the country and most of these programmes also benefit the advancement of SMMEs through deliberate support initiatives like preferential procurement.

For that reason, the advancement and promotion of SMMEs as part of the procurement activities of all organs of state, has become a key process to awarding more contracts to this ever-growing sector of the economy.

In terms of the PPPFA Regulations, organs of state, may award preference points to such specific goals as the promotion of SMMEs, female-owned businesses and enterprises that are owned by the disabled, located in specific municipal areas, regions and districts as well as provinces.

Organs of state are also demanding in some tenders that principal bidders subcontract pre-determined percentages of contracts to SMMEs both through the B-BBEE qualification as well as the Contract Participation Goal (CPG) criterion, respectively.

However, despite these Regulations now favouring the award of contracts to SMMEs, they are still very much challenged to understand and apply all the aspects of the PPPFA Regulations as required by these organs of state.

It thus also becomes imperative for those charged with enterprise and supplier development initiatives, to consider upskilling their program beneficiaries, especially on how to maximise the opportunities afforded to small businesses in government tenders.

With the above in mind, SMMEs are now challenged to understand not only how to claim preference points in tenders for specific goals, but also how to complete the relevant bidding forms and submit supporting evidence to prove their claim for such preference points.

Larger companies are also challenged to make informed decisions on perhaps, how to form joint ventures and arrange subcontracting agreements, in partnership with SMMES to continue benefitting from government contracts.

For any further queries on the new PPPFA Regulations and how to upskill SMMEs in ED & SED-Programs or for any larger enterprise, contact, Gerrit Davids | Lead Advisor | TaranisCo Advisory CC  | E-mail: gerrit@taranisco.co.za  | Cell.082 496 1657