1. Preferential Procurement 1 Enabling Legislation: The National Government has introduced an intervention to foster active participation of targeted groups in the economic mainstream through public tenders at all levels including organs of the state. PPPFA : Preferential Procurement Policy Framework Act No 5 of 2000 The Act was in line with Preferential Procurement Regulations 2001 The above has been repealed and replaced by Preferential Procurement Regulations 2011 with effect from 07 December 2011 in line with Broad Based Black Economic Empowerment

2. Challenges and constraints 2 Lack of training Lack of skill Lack of information Lack of networking Lack of resources

3. Proposed interventions 3 Practical hands-on training Weekly sessions Formation of consortia by SMMEs Formation of joint ventures Formation of partnerships Monitoring and evaluation of submitted tenders

4. The Process 4 Identification of tenders Request for tender documents Identification of suppliers Request for quotations Compliance –Tax clearance certificates Pricing of document Calculation of preference points Completion of document Submission of tender

5. BID PRICE POINTS 5 90/10 90 points based on lowest responsive bid prices in excess of R1m 80/20 80 points based on lowest responsive bid prices up to R1m

6. BID PRICE POINTS 6 90/10 90 points R1m 0 80 points 80/20 Formula Ps = 80/90 1- Pt – Pmin Pmin

7. BBBEE ADJUSTED PIONTS 7 BBBEE Status level of Contributor Number of Points 80/20 Number of Points 90/10 1 20 10 2 18 9 3 16 8 4 12 5 5 8 4 6 6 3 7 4 2 8 2 1 Non Compliant contributor 0 0

8. POINTS ALLOCATION 8 BIDDERPRICEPRICE POINTS BBBEE CONTRIBUTOR LEVEL BBBEE POINTS TOTAL POINTS A B C D E F

9. BBBEE LEVELS POINTS 9 CONTRIBUTION LEVEL QUALIFICATION Level One Contributor≥ 100 points Level Two Contributor≥ 85 points but < 100 points Level Three Contributor≥ 75 points but < 85 points Level Four Contributor≥ 65 points but < 75 points Level Five Contributor≥ 55 points but < 65 points Level Six Contributor≥ 45 points but < 55 points Level Seven Contributor≥ 40 points but < 45 points Level Eight Contributor≥ 30 points but < 40 points Non Compliant Contributor< 30 points

10. SITES FOR TENDERS 10  www.treasury.gov.za –free www.treasury.gov.za  www.tenderscan.co.za – subscription www.tenderscan.co.za  www.tradeworld.net – subscription www.tradeworld.net  www.dailytenders.co.za – subscription www.dailytenders.co.za  www.onlinetenders.co.za – subscription www.onlinetenders.co.za  www.info.gov.za/documents/tenders/index.htm - free www.info.gov.za/documents/tenders/index.htm

11. SITES FOR SUPPLIERS 11 www.safindit.co.za www.findsa.co.za www.sayellow.co.za www.easyinfo.co.za www.sabs.co.za www.specifile.co.za www.kellysearch.com www.africatrade.co.za www.infomine-africa.com

12. EXERCISE 1 12 Company A responds to a tender to supply hospital equipment and receives a quotation of R750 000 excluding value added tax. Calculate the price if the company adds mark up of 10% and value added tax of 14%

13. EXERCISE 1 13 Company A responds to a tender to supply hospital equipment and receives a quotation of R750 000 excluding value added tax. Calculate the price if the company adds mark up of 10% and value added tax of 14% Cost price =R750 000,00

14. EXERCISE 1 14 Company A responds to a tender to supply hospital equipment and receives a quotation of R750 000 excluding value added tax. Calculate the price if the company adds mark up of 10% and value added tax of 14% Cost price =R750 000,00 Mark up 10% = R 75 000,00

15. EXERCISE 1 15 Company A responds to a tender to supply hospital equipment and receives a quotation of R750 000 excluding value added tax. Calculate the price if the company adds mark up of 10% and value added tax of 14% Cost price = R750 000,00 Mark up 10% = R 75 000,00 Total price (exc) = R825 000,00

16. EXERCISE 1 16 Company A responds to a tender to supply hospital equipment and receives a quotation of R750 000 excluding value added tax. Calculate the price if the company adds mark up of 10% and value added tax of 14% Cost price =R750 000,00 Mark up 10% = R 75 000,00 Total price (exc)= R825 000,00 VAT = R115 500,00

17. EXERCISE 1 17 Company A responds to a tender to supply hospital equipment and receives a quotation of R750 000 excluding value added tax. Calculate the price if the company adds mark up of 10% and value added tax of 14% Cost price =R750 000,00 Mark up 10% = R 75 000,00 Total price (exc)= R825 000,00 VAT = R115 500,00 Total price (incl) = R940 500,00

18. EXERCISE 2 18 Company B responds to a tender to supply farming equipment and receives a quotation for R969 000 including value added tax. Calculate the price if the company adds mark up of 15% and value added tax of 14%.

19. EXERCISE 2 19 Company B responds to a tender to supply farming equipment and receives a quotation for R969 000 including value added tax. Calculate the price if the company adds mark up of 15% and value added tax of 14%. Cost Price = R969 000,00

20. EXERCISE 2 20 Company B responds to a tender to supply farming equipment and receives a quotation for R969 000 including value added tax. Calculate the price if the company adds mark up of 15% and value added tax of 14%. Cost Price = R969 000,00 Less Vat (Input) = R 119 000,00

21. EXERCISE 2 21 Company B responds to a tender to supply farming equipment and receives a quotation for R969 000 including value added tax. Calculate the price if the company adds mark up of 15% and value added tax of 14%. Cost Price = R969 000,00 Less Vat (Input) = R 119 000,00 = R850 000,00

22. EXERCISE 2 22 Company B responds to a tender to supply farming equipment and receives a quotation for R969 000 including value added tax. Calculate the price if the company adds mark up of 15% and value added tax of 14%. Cost Price = R969 000,00 Less Vat (Input) = R 119 000,00 = R850 000,00 Mark Up 15% = R127 500,00

23. EXERCISE 2 23 Company B responds to a tender to supply farming equipment and receives a quotation for R969 000 including value added tax. Calculate the price if the company adds mark up of 15% and value added tax of 14%. Cost Price = R969 000,00 Less Vat (Input) = R 119 000,00 = R850 000,00 Mark Up 15% = R127 500,00 Total = R977 500,00

24. EXERCISE 2 24 Company B responds to a tender to supply farming equipment and receives a quotation for R969 000 including value added tax. Calculate the price if the company adds mark up of 15% and value added tax of 14%. Cost Price = R969 000,00 Less Vat (Input) = R 119 000,00 = R850 000,00 Mark Up 15% = R127 500,00 Total = R977 500,00 Add Vat (Output) = R136 850,00

25. EXERCISE 2 25 Company B responds to a tender to supply farming equipment and receives a quotation for R969 000 including value added tax. Calculate the price if the company adds mark up of 15% and value added tax of 14%. Cost Price = R 969 000,00 Less Vat (Input) = R 119 000,00 = R 850 000,00 Mark Up 15% = R 127 500,00 Total = R 977 500,00 Add Vat (Output) = R 136 850,00 Total price =R 1 114 350,00

26. Vat Payable 26 Vat payable = Output tax less Input tax Formula = Price x rate/ 100 + rate Output = R 1114350,00 x 14 114 R 136 850,00 Input = R 969 000,00 x 14 114 R 119 000,00 Vat payable = R 136 850,00 - R 119 000,00 R 17 850

27. Tools required 27 Laptop Access to internet – 3G data card Data projector Training venue Will to learn

28. 28 Thank You

29. 29 Sello & Associates booksysello@mweb.co.za www.facebook.com/tender.opportunitiesbooksysello@mweb.co.za www twitter.com/BooksySello Mobile : 0847976212 Fax : 0865152849 f