From a supply chain management point of view the Preferential Procurement regulations (the regulations) have a broad applicabality, covering municipalities to government departments and any business that wants to work with them. All must comply.
The regulations now apply to Schedule 2 organisations and Parastatals (Transnet, Eskom), which were exempt under the previous regulations. All Schedule 3 organisations are now also covered.
The changes include defining an evaluation method for any tenders and quotes over R30 000, and the application of rules on functionality in all bid evaluations.
The regulations were updated to integrate the Broad Based Black Economic Empowerment Act codes with the Preferential Procurement regulations.
However, there is uncertainty regarding the definition of designated industries under the regulations, an uncertainty which will remain until National Treasury and the DTI issue instructions regarding the treatment of designated industries and local production and content.
The issue with local production and content has arisen over the competitiveness of South African companies, to which the regulations apply, with international companies, to which the regulations do not apply.
So, private sector organisations – do you know what government will require from you to receive its business under the regulations?
SmartProcurement’s Public Sector Supply Chain Summit Workshop will discuss the regulations and how organisations will need to comply, at the SmartProcurement World Conference and Expo, October 13. How the updated regulations address aspects of the previous regulations that were open to fraud and corruption is also on the agenda.
Meanwhile, the December 7 deadline is approaching and National Treasury has stated that is concerned about the capacity of verification agencies to evalute companies and issue scorecards leading before the deadline. All businesses that work for government departments will need a scorecard – thousands of businesses.