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Government Tenders

- Featured article by LAWYERS-ONLINE.CO.ZA

Tenders – what they are and the process involved

A tender is an offer to do work or supply goods at a fixed price. Getting goods or services is also known as "procurement".

Since January 2004, government began referring to tenders as "bids". When government "puts out a tender" or "invites bids", this means government asks the public for price offers to do work or supply goods. Government then assesses who to choose based on the prices offered and the nature of the person or company making the tender.

The tender or bid process is designed to ensure that the work to be done for government is given out in a fair way. There are a number of policies (known as "procurement policies") that guides government on how to make decisions on which tender to accept. Although price is very important in the decision on which tender or bid to accept, it is not the only factor taken into account.

Once government accepts a tender, it is binding on both parties. This means that the person or company that won the tender has to provide the goods or services in the manner agreed to and at the price offered, and government must pay the agreed price at the agreed time. In other words, once accepted, a tender is a binding contract.

As of 1 September 2012, suppliers and service providers who intend to do business with the Western Cape Government must be registered on the Western Cape Supplier Database (WCSD).

Registration on the WCSD is free, and no awards will be made to suppliers/service providers who are not registered on the WCSD.

It is a means of helping to verify who you are, speeds up the whole tender process, and is required in order for you to be compliant to do business with the entities that own and share the database.

The Western Cape Supplier Database allows all 13 departments of the Western Cape Government to extract, manage and verify data received from prospective suppliers that wish to do business with the provincial government. With the information of suppliers at their disposal, it will enable any of the departments to find an appropriate supplier to meet their specific needs for any project.

Each tender or bid advert indicates where you can collect the documents you will need to fill in to submit your tender, and where they should be submitted. The advert also indicates a closing date. This is a very firm deadline - no late tenders can or will be accepted.

Tenders or bids have to be in writing. Each tender has a number of associated forms which must accompany the tender you submit. The specific forms you require for your tender should be listed in the tender documentation.

Once all the forms have been completed and signed, place your tender in an envelope with the tender number on it and deliver it before the closing date and time to the place specified when the tender was advertised.

After the closing date, an elementary check is done on all the tenders submitted to see if they comply with the formal requirements, example if you have not indicated a price, your tender wil l be disqualified.

The next stage looks at compliance of the product or services with the specifications and price. Those which do not comply with the specifications are removed from the list, while all the tenders which comply with the specifications are listed in order of price. Those that fall in the lowest price group are then considered in a lowest price tender list.

It is in this stage that the preference points come into play. All the preference points claimed by those on the list of lowest price tenders are first verified. Then the formula is applied to determine who of those on the lowest price list with verifiable points come out with the best result on points, and therefore who should be awarded the contract.

In other words, preference points only come into play after the most expensive tenders have first been excluded. This is to ensure that the most expensive options do not win solely on points, and also to speed up the process, as only those on the lowest price list have their preference points verified.

Therefore tender awards are decided as follows: the bidder obtaining the highest number of points will be awarded the contract, preference points shall be calculated after prices have been brought to a comparative basis, points scored will be rounded off to two decimal places, and in the event of equal points scored, the bid will be awarded to the bidder scoring the highest number of points for specified goals.

The Western Cape Provincial Tender Site provides you with up to date and relevant infor mation on awarded and open tenders as well as useful supporting information, links, tips on tendering and much more.

Date: 12th February 2014
Legislation: Broad Based Black Economic Act No 53 of 2003
Companies Act No 71 of 2008
Consumer Protection Act No 68 of 2008
Co - operatives Act 2005
Employment Equity Act No 55 of 1998
National Broad Based Black Economic Strategy
Preferential Procurement Policy Framework Act (PPPFA) , 5 of 2000
The Competition Act 89 of 1998

Government Tenders - Legal Information South Africa