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.
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.
Most bidders are also not advised on how to complete the respective Annexures “A”, “B” and “C” and which ones should accompany the bid document.
The major headache for bidders are also as to how to correctly calculate “imported content” vs “local content” and combining to the total bid price for Local Content and Production only.
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”.
Local Content Calculation and Form Completion Assistance Offered: If you are looking for assistance on how to calculate and complete the required Forms, contact: Gerrit Davids, Cell. 082 496 1657 or E-mail: firstname.lastname@example.org
Local Content Workshop: Johannesburg Only: 12 March 20201 | 09h00-12h00: This Workshop will empower you and your team on to how to fully understand the complexities of Local Content and Production. You will also learn how to correctly calculate and complete the required Annexures respectively. To book your seat Click Here
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