Navigating New Procurement Rules and Their Impact

In the complex world of tenders and procurement, every action triggers a reaction, and recent developments have certainly set the stage for significant change.

The South African National Roads Agency (SANRAL) has recently made headlines with the suspension of its Chief Financial Officer and Head of Supply Chain Management. Allegedly, these suspensions are tied to concerns about the new procurement policy that the SANRAL Board introduced in May 2023. This policy brought about a noteworthy shift by placing greater emphasis on factors such as black ownership and subcontracting.

Traditionally, SANRAL used a bidder’s B-BBEE rating to assign 10 or 20 points to assess compliance with the State-Owned Enterprise’s preferential procurement requirements. Companies achieving a Level 1 B-BBEE rating, the highest and most sought-after empowerment status, were automatically granted the maximum points. However, in May, SANRAL revamped the scoring system, elevating the importance of black ownership and subcontracting. Under this new system, black ownership and subcontracting now account for five points (or 10 points in the case of an 80/20 scoring model) and four points (or eight points in the case of an 80/20 model), respectively, in tenders using the 90/10 scoring regime. This change effectively diminishes a bidder’s B-BBEE rating to just one point for a 90/10 tender (valued at over R50 million) or two points for an 80/20 tender (valued between R30,000 and R50 million). SANRAL, however, staunchly defends its new tender scoring system, citing its commitment to constitutional economic transformation and its goal to foster growth among black-owned construction companies, thereby improving their CIDB grading and advancing 100% black-owned firms within the construction industry.

The South African construction sector, which has invested billions over the past decade to enhance its empowerment profiles and engage with the government, finds itself facing unique challenges. This industry, now only 20% of its former size due to economic weaknesses, is grappling with turbulence. For instance, in July, construction firm Haw & Inglis (H&I) secured an interdict preventing SANRAL from awarding two tenders for which H&I had submitted bids. In a follow-up application, supported by WBHO and 11 other construction companies, including Raubex and Stefanutti Stocks, H&I has challenged the new scoring system on the grounds that it was implemented without proper consultation and is unconstitutional and irrational. In response, SANRAL maintains that it had the authority to modify the scoring criteria and that the list in the act was not exhaustive. Asithandile Ben-Mazwi, the Acting Head of Supply Chain Management, emphasized that it falls within the prerogative of state entities to determine criteria and their relative weights in tender documents. SANRAL asserts that its decision to abandon the previous scoring system in favor of the new one was made after careful consideration, grounded in legislative and policy considerations. Additionally, SANRAL argues that if the courts side with the construction firms, it could signify an overreach of judicial authority.

Meanwhile, on a different front, the National Treasury has presented a new Public Procurement Bill to Parliament, which opened for public comments last week. This bill seeks to revamp the preferential procurement system by allowing for the implementation of “one or more preference points systems.” It also permits certain contracts to be earmarked for designated groups to promote localization and subcontracting. Stakeholders are encouraged to submit written feedback on the bill by 11 September 2023. The bill’s summary highlights the fragmentation of public procurement regulations across various laws governing public administration in South Africa.

Daily Maverick

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About Debbie Wessels

I started at Leads 2 Business in April 2008 in the tenders Department and transferred to the Projects Department during the same year. I was appointed Head of Department for Projects from February 2011 to March 2022. April 2022 I started a new adventure as Content Regulator.

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Thekweni Reinforcing (Pty) Ltd

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The Future of Tenders & Procurement


Did you notice that since 25 February 2022, there has been a drop in the number of new Tender Notices being published? Although not a complete stop…

What is this a result of?

The previous Preferential Procurement Regulations gazetted in 2017 under the PPPFA of 2000 stipulated that only companies that complied with certain criteria, including a minimum B-BBEE status, could apply for tenders. However, Afribusiness challenged these criteria, advising that it was unconstitutional and also resulted in inflated pricing and poor delivery as many businesses with competitively priced and high-quality products were excluded from tendering.

The Constitutional Court has upheld the SCA’s (Supreme Court of Appeal) 2020 findings that the regulations were inconsistent with the framework for preferential procurement in the PPPFA and the Constitution. The ConCourt and SCA decisions have big implications, especially as procurement by governmental, parastatal and state-owned entities totals about R2-trillion annually.

On 25 February 2022, it was issued that Tenders advertised before 16 February 2022 be finalised with Tenders advertised on or after 16 February 2022 be suspended and No new tenders are advertised. On 03 March 2022, an Advisory Note was published that mentioned tenders of a value less than R30 000 were excluded from this. Further to this exemptions may be requested but are restricted to those who cannot wait for either the new regulations or the ConCourt’s guidance.

The Draft Procurement Regulations were published for comment on 11 March 2022, and the deadline for comment is 11 April 2022. These regulations restore the previous rules, where BEE criteria accounted for a maximum of 20% share in the evaluation of tenders.

What is the current state of affairs?

IT Web notes that “This state of affairs has had a significant impact on government tenders and National Treasury’s offer of exemptions for urgent requirements is unlikely to make much of a difference over the coming weeks.”

At Leads 2 Business we have seen a push for Government Departments and Municipalities to communicate their decisions to potential tenderers. Whether this is to suspend, withdraw or cancel until further notice; or to just postpone and extend dates; in a bid to avoid having to readvertise; various strategies have been employed to meet various procurement needs.

We have also seen errata recognising the Preferential Procurement Regulations ambiguity, and removing these criteria from current tenders. Hence these criteria no longer apply when these tenders will be evaluated and adjudicated.

In summary, some tenders are currently being published whether that be without the regulations in question or to the value of less than R30 000.

Where to from here?

The Draft Procurement Regulations will be referred for review and Cabinet will need to approve the revised Bill before it can be submitted to Parliament. Approval from both the National Assembly and the National Council of Provinces will be required before it can be sent to the President to sign into law.

It’s anyone’s guess how long the processes will take and for the Procurement landscape to return to “normal”. At this point, we haven’t noticed any change in the publication of Award Information and perhaps this lull will allow some Departments and Municipalities to work through any backlog they might have or to plan for when this legal knot has been untied. Award Information that is available is being published and providing value to relevant industry players.

Leads 2 Business continues to check our usual sources and the media to keep abreast of the situation, and are updating the tenders with any pertinent information. As Industry leaders for over 20 years we remain committed to providing valuable information for the Building and Construction Industry.


Claire Donaldson | Head of Department Leads 2 Business Tenders


Biz News

IT Web

National Treasury
Government Printing Works

About Sasha Anderson

Millennial Mom + wife living the hash-tag life. Remember: If You Fail - Fail Forward

L2B Terminology & Acronyms

posted in: Did You Know 0

At Leads 2 Business we often use terminology to refer to information specific to our website.


Here are some Acronyms unique to us:

Firstly L2B short for Leads 2 Business, also our domain ie

PP: Private Projects

PPA: Private Projects Advisory or Private Project Reference

DT: Daily Tenders

SI: Site Inspection

CL: Closing Date

DTA: Daily Tender Advisory or Daily Tender Reference

L2Q: Leads 2 Quotes

OQ: Open Quotes


Some other Acronyms you may come across in the Construction Industry that we often refer to on our website and in communication with subscribers are:

BAR/DBAR/FBAR: Basic Assessment Report / Draft Basic Assessment Report / Final Basic Assessment Report
BBEEE: Broad-Based Black Economic Empowerment
BOQ: Bill of Quantities
BID: Background Information Document
Bid: A formal proposal to deliver goods or services at a specified price, as well, describing that the tender contract requirement will be met
BFS: Bankable Feasibility Study
DFS: Definitive Feasibility Study
CIDB: Construction Industry Development Board
CIPC: Companies and Intellectual Property Commission
CSD: Central Supplier Database
CSR: Corporate Social Responsibility
DFA: Development Facilitation Act
DSR: Draft Scoping Report
EA: Environmental Authorisation
ECO: Environmental Control Officer
EIA: Environmental Impact Assessment
EME: Exempted Micro Enterprises are small entities, with an annual turnover of R10 million or less.
EOI: Expression of Interest is a multi-staged process that is used early in the procurement process.

EPC: Engineering, Procurement & Construction
EPCM: Engineering, Procurement, Construction and Management

EMPr: Environmental Management Programme
EMP: Environmental Management Plan
ESIA: Environmental & Social Impact Assessment
FS: Feasibility Study
FSR: Final Scoping Report
GEN: Generic Enterprises are large entities, with an annual turnover in excess of R50 million
I&AP’s: Interested and Affected Parties
IDP: Integrated Development Plant
JV: Joint Venture is a business entity created by two or more parties with the purpose to achieve a specific task, such as win a tender, PFI, PPP

MBD: Municipal Bidding Document – standardized documents used for tenders
NHBRC: National Home Builders Registration Council – a regulatory body of the home building industry
PFS: Pre-feasibility study
POSEIA: Plan of Study for Environmental Impact Assessment
PPA: Purchase Power Agreement
PPP: Public-private partnership is a contract between a public-sector institution and a private party, where the private party performs a function that is usually provided by the public sector and/or uses state property in terms of the PPP agreement.

PPPFA: Preferential Procurement Policy Framework Act of 2000 and the Preferential Procurement Regulations of 2001 establish the obligation of government to award preferential procurement points to enterprises owned by historically disadvantaged persons, including females
QHSE: SHE/SHEQ – Quality, Health, Safety, Environment
QSE: Qualifying Small Enterprise is one of the categories of South African businesses as per BBEEE with an annual turnover of between R10 million and R50 million
RFT: Request for Tender is a formal, structured invitation to suppliers to submit or bid to supply products or services.
RFP: Request for Proposal is submitted in an early stage in the procurement process and is commonly used when it is required technical expertise, specialized capability, or in some cases where the product or service requested do not already exist and must be developed.
RFQ: Request for Quotation is when Suppliers are invited to provide a quote for the provision of specific goods or services.
RFI: Request for Information is requesting information necessary to decide the procurement process. Hence, RFI typically occurs during a planning phase.
SLA: Service Level Agreement is  An agreement between two or more parties. Where one party is the customer and the other party is a supplier delivering a service.
SMME: small, medium and micro enterprises, also referred to as small business, play an important role in an economy. They can be key drivers of economic growth, innovation and job creation.

Did you find these helpful?
Is there any terminology or acronyms we missed? If so leave a comment below and we will be happy to update our post.

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About Sasha Anderson

Millennial Mom + wife living the hash-tag life. Remember: If You Fail - Fail Forward

Is your BBBEE Grading impacting your Business?

posted in: General 2

Is your BBBEE Grading impacting your Business?

What is the meaning of BBBEE?

Broad-Based Black Economic Empowerment (BBBEE or B-BBEE as written by the South African government) is a form of economic empowerment initiated by the South African government in response to criticism against narrow-based empowerment instituted in the country during 2003/2004. It has been said that “B-BBEE legislation is the most significant piece of legislation affecting South African business today”.

The Broad-based Black Economic Empowerment Act 53 of 2003 affects all business and individuals in South Africa. It is not only vital for the country’s integrated prosperity, but a catalyst for economic growth. It makes sense to ensure that your BEE rating is as high as possible. Government has taken small and medium-sized businesses in consideration with the development of BBBEE legislation.

You have to be BBBEE compliant to be able to do business in South Africa. One of the 7 elements of the BBBEE scorecard is preferential procurement and supplier development. This is the element that carries the most weight (nearly 40%). If you procure from other entities that are BBBEE compliant your BBBEE score increases. One can see the trickledown effect from suppliers to government down to their suppliers. Once again the goal is to try and achieve a level 4 as this gives you 100% contribution towards preferential procurement.

BBBEE makes it possible for the business to get access to contracts.
BBBEE can help the business to achieve its social responsibility towards the community
BBBEE can result in the acquiring of new customers for the business.
BBBEE can lead to new innovative ideas with the input of the empowering partner.
BBBEE makes it possible for the business to invest in affordable skills development for employees.

The challenge is to improve on your B-BBEE activities and score each year. If your annual turnover is between R 10 million and R 50 million you are defined as a Qualifying Small Enterprise (QSE).

The Generic Scorecard includes all seven B-BBEE Elements, namely: Ownership, Management Control, Employment Equity, Skills Development, Preferential Procurement, Enterprise Development, Socio-Economic & Sector Specific Contributions.

How is BEE Compliance Expressed and what Level is considered Compliant?

1 100 or above 135%
2 85 to 99.99 125%
3 75 to 84.99 110%
4 65 to 74.99 100%
5 55 to 64.99 80%
6 45 to 54.99 60%
7 40 to 44.99 50%
8 30 to 39.99 10%
Non Compliant < 30 0%


The codes define three types of companies;

EME below R10 million
EME – exempt micro enterprise – a company that has an annual turnover of less than R10 million. These companies are automatically given a BEE score of 65 points (level 4), and if majority black owned, level 2 and if 100% black owned, level 1

QSE between R10 million and R50 million
QSE – Qualifying Small Enterprise – an enterprise with an annual turnover of between R10 million and R50 million. The QSE will need to fill in a scorecard but use slightly easier targets.

Generic above R50 million
Generic – all companies with a turnover above R50 million per annum.

Benefits of B-BBEE for business

Your clients will know that you are doing whatever it takes to stay ahead in your business – that you mean business and that you are look to them to support your efforts.
You will have a clear picture of what types of supplier you have. A rating would give you leverage to be able to negotiate better discounts, etc. Supplier analysis will assist with your procurement policy development.
Your image will be enhanced by your demonstration of leadership in your industry – be perceived as in step with development initiatives.
By focusing on HR development, enterprise development and BEE, you will demonstrate commitment towards the social, educational and economic developments in the community in which you operate.
Attempt to increase your develop your employees’ skills and potential development as well as your BEE ratings enhance fair and progressive employment practices.
Your staff will see what you are doing, which will boost their morale.
The sooner your business is rated, the sooner you will understand how to develop a BEE strategy to increase your annual BEE rating. Your BEE strategy should form part of your company’s overall strategy plan.
BEE can also be a marketing tool. As a client of BEE Empowered, your company’s name will be listed on our website’s BEE directory and will be available to all those searching for BEE-compliant suppliers.

Don’t get left in the dark. 

A level one contributor is the highest achievable status and the lowest level of BEE compliance is level eight. The higher the BEE status level, the stronger a company is in relation to its competition.


Sources: BeEmpowered

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About Devika Suresh

I started at Leads 2 Business in January 2010 (12 Years ago). I am presently Deputy HOD of L2Q. I started in the Daily Tenders Bills department and worked my way up to the L2Q department.

Did You Know #DYK: BEE Amendments

posted in: Did You Know 0

BEE Amendments

BEE Amendments


For more information please contact:
Jako Liebenberg

EME – Exempted Micro Enterprise: Enterprises with an annual turnover less than R10 million or are recently formed or incorporated entities that have been in operation for less than one year. (Start-up enterprises).
QSE – Qualifying Small Enterprise: A business with an annual turnover more than R10 million but less than R50 million.



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About Jako Liebenberg

Jako is a qualified Chartered Accountant, Registered Public Auditor and Broad Based Black Economic Empowerment Consultant. Jako has a passion for Business Development and has a hands on approach in this regard.

Did you Know…? #DYK New Tendering Rules will change the way you do business.

posted in: Did You Know 2

New Tendering Rules will change the way you do business.

Tenderers are required to make changes in the way they submit government tenders, especially in relation to sub-contracting.
Bids and tenders submitted without taking the below points into consideration stand to have their tenders deemed ‘unacceptable’ or could face hefty fines!
Gerrit Davids, owner and facilitator of a tender advisory consultancy, walks us through the new Preferential Procurement Policy Framework Act (PPPFA) Regulations.



  • The new Regulations from the outset grants an organ of state the authority to stipulate a ‘Preferred Minimum BBBEE Level’ in a tender, which will exclude certain companies with a lower BBBEE Level from submitting bids.


  • The Regulations will allow the state to include wide-ranging Sub-Contracting stipulations, which could force principle bidders to make use of up to 8 x different types of sub-contractors under the ‘Pre-Qualification Criteria’. Failure to do so will have the bid being declared ‘unacceptable’.


  • The value of the 80:20 and the 90:10 Preference Point Systems has been increased to below and above R50m respectively. However, it retains the current scoring of points for Price alongside that of BBBEE in tenders.


  • The new Regulations also place a 25% maximum on Sub-Contracting, which is done in the ordinary course of business with companies that have a lower BBBEE level than that of the principle bidder. Failure to comply with this stipulation will also cause tenders to be disqualified from consideration.


  • Regulations are introducing a new approach to pricing where a bidder scores the ‘highest points’ in a tender but its price is not market related and (the bidder) refuses to adjust it to be in-line with market related prices. The organ of state will have the right not to award the tender to such a bidder and it may even decide to cancel it.
  • An additional stipulation to the Regulations makes it obligatory for an organ of state issuing tenders to ‘make available a list’ of potential sub-contractors that qualify under the definition of ‘designated groups’ and such a list must be subject to approval by National Treasury.
  • The much-debated stipulation of compulsory Sub-Contracting of 30% for all tenders above R30m in value will also be allowed ‘where feasible’ to advance any one or more of the ‘designated groups’ as defined by these new Regulations.


  • Another key regulation stipulates that sub-contracting, which was not mentioned in the bidder’s tender could only be done with the permission of the organ of state ‘after a tender has been awarded’. A 10% penalty of the total value of the contract may be imposed where the correct sub-contracting procedures were not followed or where information was withheld, a ban on doing business with the state for 10 years could also be imposed by National Treasury under these new Regulations.


Davids says, “The meaning and understanding of the concept of ‘being proactive’ becomes a very relevant application with this new dispensation. Tenderers will be left behind if they do not make the required changes in the way they submit government tenders, especially in relation to sub-contracting”.

The Regulations will come into effect on 1 April 2017 giving tenderers less than 3 months to prepare for its impact.

Should you wish to contact the author:

Gerrit Davids – Lead Advisor at TaranisCo Advisory CC
Tel. 011-026 4891
Cell. +27 (0)82 496 1657

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About Gerrit Davids

Gerrit Davids is the Lead Advisor at Taranis Co Advisory with more than 20 years experience in government procurement regulations and having trained more than 2000 people on how to submit compliant tenders.