Thursday, 21 November 2019

Bidders are incorrectly disqualified on Local Content

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The revised Preferential Procurement Policy Framework Act Regulations (PPPFA) of 2017 clearly stipulates that the Department of Trade & Industry (DTI) has the regulatory mandate to designate ‘industries, sectors and sub-sectors for local production at a specified level of local content”. 

The Regulations further instruct that “only locally produced goods, services, works or locally manufactured goods, with a stipulated minimum threshold for local production and content” must be considered where such a designated sector has been declared, by the DTI. 

Despite this instruction, organs of state may include such a stipulation, even if a specific sector has not been designated per se. 

However, since the introduction of these Local Production and Content regulations, both organs of state and bidders have struggled with its correct interpretation and application through the required Forms, which must be completed to meet the minimum compliance levels as stipulated. 

Further, it has been brought to our attention that organs of state are incorrectly advising bidders that they must insert the “total bid amount” in the SBD6.2/MBD6.2 Tender Forms.  

That’s incorrect. 

If bidders do follow this advice, their percentage of Local Content vs. Imported Content will not correlate, with the result, the Bid could be incorrectly being disqualified from Evaluation, and eventual Adjudication respectively. 

Further, organs of state are not to include the assessment of the Local Production and Content considerations as part of the Adjudication Process, since its must be done only, during the Evaluation stage. 

Bidders are advised to ensure that they have a complete and correct understanding of the process as well as how to apply for either “Authorisation” or “Exemption” from the relevant authorities, should their products exceed the minimum threshold for “Imported Content”.

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For more information contact:
Gerrit Davids
Cell. 08 496 1657

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