Procurement
Procurement ProcessStage 3: Selection and award
Content Last updated: 15/11/2019
Stage 3 of 5
Once a procurement process is complete, a winning bidder will receive a tender award.
3.1 - Overview3.2 - How a winning bidder is selected3.3 - Selection of a winning bidder3.4 - When the tender award happens3.5 - Glossary
3.1 - Overview
Once a procurement process is complete, the winning bidder will receive a tender award.
3.2 - How the winning bid is selected
The requirements for a particular tender are set out in the RFP or RFQ document and the winning bidders are usually chosen based on a combination of factors including:
- Do they have the technical ability to do the job? - This characteristic is sometimes referred to as the bidder’s “functionality”.
- Do they have the capacity to do the size of the job? This characteristic is sometimes referred to as the bidder’s “functionality”.
- How do their BBBEE credentials measure up?
- Does the bid meet the RFP’s requirements to make use of a certain percentage of local content (local suppliers or locally-made goods)?
- Who had the lowest priced bid?
Usually the highest scoring bidder will win the bid. However sometimes objective criteria may allow the procuring entity to award to bidder who did not score the highest but may have met a special requirement that is identified in the RFP. These special requirements must be mentioned in the RFP.
System Weaknesses
- Although prices of bids should be read out in public, in practice this is an exception. Usually, bid prices are kept secret until bids awarded.
- It is important that ordinary citizens, journalists and members of civil society are able to attend bid-opening sessions
- Sometimes bid closure and opening dates are scheduled at inconvenient times, e.g. the day before Christmas. This makes monitoring very difficult.
Details of awarded tendersDetails like the winning bidder and their bid amount can be found here.eTender Portal
Alternative source for tender details
Tender bulletins containing tender award information are also published by the Government Printing Works.
Government Printing Works
3.3 - Selection of a winning bidder
Bid evaluation
All of the bids will be sent to a Bid Evaluation Committee (BEC)
- The Bid Evaluation Committee is a team of people from the procuring entity
- This committee will evaluate each bid based on a points system which was described in the RFP
- For the BEC to conduct its work diligently, the criteria for awarding points should be clear and practical to evaluate. This is something that must be borne in mind when the RFP is drafted
- Bids are usually evaluated using a two stage process.
- STAGE 1: TECHNICAL QUALIFICATION - The bidder’s skill and experience enabling it complete the job properly.
- STAGE 2: PRICE AND BBBEE STATUS - Only the pricing and BBBEE status will be considered for bidders who are technically qualified. If, as a supplier, you do not have the technical skill to perform a job, your pricing is irrelevant.
- The BEC will add up the scores for each bidder to assess if they meet the threshold for STAGE 1, as stated in the bid documents. For example, if the technical threshold is 70 points, then only bidders who achieve 70 points and above will be assessed in STAGE 2, for price and BBBEE.
- After Stage 1 and Stage 2 are complete, a Preferred Bidder will be selected.
System Weaknesses
- BEC meetings are not open to the public and minutes from these meetings are not made public.
- The BEC’s recommendations for a preferred bidder are not made public.
- The criteria for awarding points, as well as points awarded to bidders, should be open to the public so that the procurement process can be monitored.
Bid adjudication
The bids will now be sent to the Bid Adjudication Committee - the BAC
- The BAC must ensure that the criteria were applied correctly by the BEC and the process was fair to all bidders.
- If all is above board, the BAC must make a recommendation to the Accounting Officer of the procuring entity to approve the Preferred Bidder.
- Once the Accounting officer has approved the selection of the Preferred Bidder, a letter of appointment will be prepared.
System Weaknesses
- BAC meetings are not open to the public and minutes from these meetings are not made public.
- These documents should be published on the websites of the procuring entity and the relevant treasury, however, practice in this regard is uneven.
- Some entities publish documents proactively on their websites, however, one must be registered on the entity’s database to gain access, and registration is limited to bidding parties. It is not available to interested third parties. An example of an entity using this method is PetroSA.
- Some entities practice open procurement immediately from the time that the BAC makes a decision. An example is the Gauteng Open Procurement project. However, the extent of this openness varies as it is still up to individual entities to exercise discretion in this regard.
Appointment of bidder
A Preferred Bidder will be appointed
- A letter of appointment, addressed to the preferred bidder, will be signed by a delegated official
- This is the tender award and should be followed by a signed contract from the organ of state and the appointed bidder.
3.4 - When the tender award happens
- The Bid Adjudication Committee awards the bid if this was delegated to them. Otherwise they make a recommendation for the Accounting Officer to award.
- The tender award occurs when the preferred bidder receives their letter of award.
- Now the winning bidder and the procuring entity must negotiate and sign a contract.
3.5 - Glossary
Bid Evaluation Committee (BEC)
- An ad-hoc committee, appointed in writing by the procuring entity to EVALUATE the tenders received according to the evaluation criteria set in the advertised bid.
- They check the mandatory, administrative requirements and compliance with the special conditions if applicable.
- Bids are usually scored for price and empowerment. Generally the bidder who scores the highest number of points will win the contract.
- BEC makes recommendations on a preferred bidder to the Bid Adjudication Committee.
Bid Adjudication Committee (BAC)
- A Standing committee appointed for a period of at least three years
- They assess the recommendations of the BEC whether to support or not support the award of tender;
- They recommend contract extensions, amendment of contracts, cancellation or transfers of contracts awarded.
- The BAC has a right to request the BEC to reconsider its submission to obtain the necessary information to make an informed decision.
The BAC assess whether:
- All necessary bid documents have been submitted;
- Disqualifications are justified;
- Scoring has been fair, consistent and correctly calculated;
- Bidders have declared their interests;
- Evaluations have been done according to the advertised criteria;
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