1. GROUP TECHNOLOGY & COMMERCIAL TACTICAL PROCUREMENT PROCUREMENT PROCESS PRESENTED BY MARTHA DE BRUYN 24 NOVEMBER 2014 1

2. PRESENTATION OUTLINE 2 Procurement Principles Tender Process What to do when interested in submitting a tender PPPFA – Application Threshold Submitting your tender Typical Pitfalls when Tendering Contact details Questions 10 June 2016

3. 3 CONSTITUTIONAL PRINCIPLES OF PROCUREMENT Group Commercial Seeks to promote Corporate Governance by upholding the following principles: Fairness Equitability Transparency Cost Effectiveness Competitiveness 10 June 2016

4. TENDERING PROCESS Check the requirements and decide if you wish to tender. Go into each folder and print the documents contained in each folder. You need to bring a full set of the document to the meeting. Attend clarification meeting. If stated as Compulsory then you need to send a representative. Failure to do so will result in your tender not being considered for evaluation. If the clarification meeting is not compulsory, it is still in your interest to attend as important information is imparted in these meetings. 10 June 20164

5. WHAT TO DO WHEN INTERESTED IN SUBMITTING A TENDER READ, the requirements as stated in the Invitation to Tender; then READ, the requirements as stated in the Invitation to Tender; and then finally READ the requirements as stated in the Invitation to Tender and COMPLY! 10 June 20165

6. The Next Step (Continued) Eskom is bound to apply the principles as contained in the Preferential Procurement Policy Framework Act (PPPFA) as published by National Treasury and Gazetted. This results in a change in the way which tenders are evaluated. A fundamental difference is that there is a Preference Point System. Tenders valued at less then R1 million are evaluated on a 80/20 preference point system Tenders valued at over R1 million are evaluated on a 90/10 preference point system 80 or 90 is price 10 or 20 is B-BBEE status of the company 10 June 20166

7. WHAT TO DO WHEN INTERESTED IN SUBMITTING A TENDER BUT FIRST YOU NEED TO GET TO THAT STAGE: BASIC COMPLIANCE Tender submissions are reviewed for compliance to submission requirements. Mandatory requirements must be met. Eg. Need to submit an original and a copy of the original. 10 June 20167

8. The Next Step (Continued) TYPICAL REQUIREMENTS Price List – refer NECValid COID certificate Original SARS Tax clearance certificateDrawings and Test certificates as per IARC Authority to submit a tenderDeclaration of interest Valid B-BBEE verification certificate CIDB Registration Valid Certificate of Compliance with the Employment Equity Act Declaration of fair bidding practices Certificate of attendance at tender clarification meeting Confirmation of receipt of addendums to tender documents Declaration of shareholding or beneficiaries 10 June 20168

9. The Next Step (Continued) If all the requirements are met you proceed to the next phase WHAT IS A GATEKEEPER? A gatekeeper is a non negotiable requirement which is required to be met. In the event that this is not met, the tender returnable will be deemed to be unacceptable and no further evaluation will be conducted. 10 June 20169

10. PPPFA - APPLICATION OF THRESHOLD CriteriaWeightings Technical Drawings Samples Specifications Measurements (etc.) 40 SHE30 Quality30 Total100 Overall Minimum Threshold for Qualification75 10 June 201610

11. PPPFA - APPLICATION OF THRESHOLD (EXAMPLE) CriteriaWeightingSupplier ASupplier BSupplier C (Technical ) Design, Drawings, Samples, Specifications, Measurements 40 3010 SHE300 Quality30 Total100709070 Overall Minimum Threshold for Qualification 75DISQUALIFYPASSDISQUALIFY 10 June 201611 Example:

12. The Next Step (Continued) Financial Analysis An analysis of the tenderers financial statements will be conducted for the purposes of establishing the tenderers financial viability and ability to meet all of its contractual obligations for the duration of the contract, should the tenderer be awarded the contract. Where applicable a financial evaluation will be conducted by Eskom to further evaluate the financial viability of the tenderer. (incl. formal treasury evaluation) Tenders which do not meet Eskom’s financial requirement will not be evaluated further. For high value tenders copies of Identity Documents of Shareholders and Shareholding of company details will be required. 10 June 201612

13. The Next Step (Continued ) Final Step Price Evaluation (90 points) Where: Ps=Points scored for price of tender under consideration Pt=Rand value of tender under consideration Pmin=Rand value of lowest acceptable tender 10 June 201613 Adjudication CriteriaPoints Price Evaluation Ps = 90 (1 – Pt – Pmin) Pmin 90

14. The Next Step (Continued) Final Step (Continued) B-BBEE Evaluation (10/20 points) Tenderers are required to submit original and valid B-BBEE Status Level Verification Certificates or certified copies thereof together with their tenders to substantiate the B-BBEE claims. Tenderers who do not submit B-BBEE Status Level Verification Certificates or non-compliant contributors to B-BBEE will not qualify for preference points for B- BBEE however will not be disqualified from the tender process. Such a tenderer will score points out of 80 for price and 0 points out of 20 for B-BBEE or Such a tenderer will score points out of 90 for price and 0 points out of 10 for B-BBEE. This tender is for a panel contract to perform work for Eskom Holdings SOC Limited on an “as and when required” basis. This is a rate based tender. The intention is to achieve standard rates for all activities of the contract. The rates will be negotiated with contractors who have progressed to this phase of the evaluation process. 10 June 201614

15. Submitting your Tender COPY SET Tender (____) Copy Tender documents marked as Commercial documents Tender (____) Copy Tender documents to be returned for the basic assessment Tender (____) Copy Tender documents marked as Technical documents to be returned for the functional Technical Evaluation Tender (____) Copy Tender documents marked as SHE (Safety, Health and Environmental) documents to be returned for the functional SHE Evaluation Tender (____) Tender documents marked as Quality documents to be returned for the functional Quality Evaluation 10 June 201615

16. Late Submission. Tenders submitted at incorrect location. ESKOM HOLDINGS SOC LIMITED GROUP TECHNOLOGY & COMMERCIAL ATT: TENDER OFFICER BLOEMFONTEIN ESKOM CENTRE 120 HENRY STREET BLOEMFONTEIN CONFIDENTIAL TENDER NO. (________) Non-responsive/Invalid/Disqualified Tenders Not submitting mandatory tender returnable(s).  Not supplying sufficient information in order to achieve marks.  Not signing acceptance and submitting an offer which complies with Eskom’s Terms and Conditions.  16 TYPICAL PITFALLS WHEN TENDERING 1 ST TIME 10 June 2016

17. TYPICAL PITFALLS WHEN TENDERING 1 ST TIME B-BBEE certificate expired at the award stage. Not Pricing the entire bill. Erasers: Tippex may not be used. Clarification must be in writing within the period prescribed as per the invitation to tender. After the clarification period has lapsed no further clarification will be permitted. The tenderer is only permitted to clarify with the Buyer in writing in order that all tenderers receive the same information. Invalid Tax Clearance Certificate at the award stage. COID (Workmen’s Compensation) CIDB (Registration) CIPC (Registration Documents) 10 June 201617

18. Contact details Mmakoena Mohale – (051) 404 2334 or mohalejm@eskom.co.zamohalejm@eskom.co.za MV & LV Cable Repairs (MJM14/101 – Closing 28/01/2015) Emergency Distribution Line Repair (MJM14/102 – Closing 28/01/2015) Tyra Ramdharee – (051) 404 2086 or ramdhat@eskom.co.zaramdhat@eskom.co.za Minor Distribution Line Construction (TR14/103 – Closing 20/01/2015) Major Distribution Line Construction (TR14/104 – Closing 20/01/2015) Martha de Bruyn – (051) 404 2506 or dbruynmj@eskom.co.zadbruynmj@eskom.co.za Wood Pole Replacement (Live work) (MdB14/105 – Closing 21/01/2015) Wood Pole Replacement (Dead work) (MdB14/106 – Closing 21/01/2015) 10 June 201618

19. QUESTIONS ???

20. THANK YOU