Monthly Tender Services

What does a good Tender application look like?

A good Tender is a well-structured document that clearly and concisely answers all the questions asked within the Tender proposition.

If you want to create a Tender application that is good, it’s very important to answer all questions accurately – and to pay attention to detail. Small details, like neglecting to write your name on the envelope which contains your tender applications, can often lead to the invalidity of an application.

For a good application, it’s also important to make sure you have enough time to respond to a Tender. It’s important not to rush into the application.

You need to make sure you understand what the project demands of your business – and you need to make sure you can deliver it.

How does the Preferential Procurement Points System work?

The Preferential Procurement Points System in South Africa is a system that’s used to evaluate and compare different Tender applications. This system assigns specific values to specific aspects of your application and your business.

This Preferential Procurement Points System is based on one of two scoring systems. The 80/20 point system applies to any Tender valued at R50M and below. The 90/10 system comes into play for anything above that amount.

In both these systems, the first value is assigned to your price, which means you get a score out of 90 or 80 (depending on the value of the Tender).

The second is a value assigned to your company’s transformation ability – this is your BEE status. This means your BEE status will get a score out of 10 or 20, depending on whether you’re subject to the 90/10 or the 80/20 scoring system.

When these two values are combined, you will receive an overall mark. The goal is to achieve as close to 100 points as possible. The Tender applicant who scores the most wins.

The 20 (or 10) points allocated to BEE might seem like it’s not significant, but when your competitors match your price, these values can often determine who wins a Tender.

What does Functionality refer to in the Tender application process in South Africa?

The Functionality of your company is the first step in the evaluation of your application. This happens even before the preferential procurement points system is even applied.

The Functionality refers to whether or not your company meets the minimum requirements of the project. This section will determine who moves on to the next round. It specifically refers to whether or not you have the means (for example the workforce, money, experience and skills) to execute the job at hand.

It’s important to use the headings (as specified in the tender document) related to Functionality in your application. You want your application to be as clear, obvious and easily identifiable as possible.

Key elements to the new rules? (New Legislation as of the 1st April 2017)

The governmental entity you apply to may negotiate your price depending on how it relates to industry-pricing. If for example, your company has the best score, but you’re unwilling to negotiate fair prices, the government may opt for the applicant with the second or even the third-best proposal.

The 80/20 system has shifted from R1 million to a R 50 million threshold.

Also, when winning a tender above R30 million you are, as a condition of the contract, obliged to subcontract 30% of the work to a black-owned company (51% majority ownership). This action plays an important and deliberate role in trying to share the wealth, but more importantly share knowledge, with formerly disadvantaged communities. Something like a big-brother-mentorship, which the Government proactively advocates for.

The localization of contracting is another buzz term the Government would like to advance within the framework of Tenders. The government pushes companies to try and use people from within the area in which the project would happen. The government agency which issued the Tender would usually be able to provide you with a list of subcontractors who fit the requirements of the Tender.

Most would agree this is a good strategy because it gives a greater sense of ownership to the company that functions within its community. At the same time, it spreads the wealth to small, local businesses.

What are the different types of Government Tenders in South Africa?

● Any project valued below R30 000 does not require a formal tender process.
● A project valued between R30 000 and R200 000 is called a quotation or a request for quotation.
● Anything above R200 000 is considered a competitive bid tender and needs to be approved at a National Governmental level.

Where can you find Tender Leads?

Tenders are published daily in multiple newspapers and multiple websites.

Etenders is the official Government website, which lists all the tenders that are up for grabs. Unfortunately, it’s disorganized and you’d have to scroll through thousands of pages each day.

A simpler solution is to subscribe to one of our Tender services. We filter and send you what applies to your business. We provide an easy and fast solution to help you find and apply to Tenders.

What is the Central Supply Database (CSD)?

The Central Supply Database is an electronic database, specifically for applicants to Government Tenders. This system was created to streamline the paperwork applicants submit every year to apply to multiple Government Tenders in South Africa.

The system stores the information that is typically required for every application: these are things like BEE registration or tax compliance documents. This means your documents are stored electronically on a central database after you’ve completed your CSD registration. All you need to do is keep your documentation up-to-date by uploading renewals etc.

Subsequently, all Government departments use this database when they need to check these things about a company as part of their Tender vetting process.

It’s important to note that this database is purely for Governmental-use. When applying for private tenders you must still provide all the documentation, they ask of you.

We offer a CSD Registration service, if you need support in registering for Government Tenders.

How much does it cost to submit a Tender?

Currently, the South African Government is working towards a system where Tender applications are free, to remove the barriers to access.

However, at the moment, the law states that local authorities are allowed to charge a reasonable fee.

Thus the question arises what is seen as reasonable? These fees normally range between R150 to R500 for a Tender document, which is needed to submit a Tender application.

Unfortunately, this rule is being leveraged incorrectly and documentation prices can skyrocket (up to R5000) to warn off any unwanted SMEs when they’re solely looking for big corporates to take on projects.

How can I create better Tender applications in the future?

Firstly, you can ask the agency or the governmental authority you applied to for reasoning as to why you did not win the Tender. You’d be surprised how open they are these days about the reasoning behind you losing the tender.

You’re also welcome to claim a free business consultation with one of our Tender experts. We can help you get to where you want to go.

How long does a Tender allocation take?

Typically a Tender document will include both the deadline date for submission and the date by which a committee will determine and post the results on their respective website. If there isn’t a definite date, it could take up to 12 months.

If you are pressed for time, it would be a better decision to apply to Tenders with definite timelines.

Read the rules and regulations carefully of each Tender application you submit. If they say you need to write your name and cellphone number on the outside of the envelope, do so. They are looking for reasons to disqualify you.

Make sure you submit your application in time. This is extremely important as the deadline is always very strict to stop fraudulent activities. Late applications will not be accepted, because information on Tender applications is often made public after the closing date. This would allow your competitors to see what pricing you submitted to submit a slightly lower amount.

Don’t submit your tender application too early. If by chance, your submission is placed in the wrong box of a Tenders that closes earlier, an official may open it by mistake. Additionally, early submissions increase the likelihood of leaked information that your competitors can use to their advantage. In the past, there had been fraudulent activities associated with early applications.

The best approach is submitting your tender on the last day of submission and to wait in the relevant office. It’s a legal requirement that all Tenders are opened and marked within the Tender register. It’s advisable to wait and witness these proceedings until you see that your application opened and registered.

You probably won’t get a notification of receipt, so it’s very important to follow-through your tender submission from the beginning to end.

Compliance is extremely important. Remember to fill in the entire document and to answer all questions asked within the Tender document. Also, remember to sign and/or add your initials to every page of every document. These tiny details often get applicants disqualified.