How Government Evaluates Tenders in South Africa

South African government tender evaluation is governed by the Preferential Procurement Policy Framework Act (PPPFA) and its Regulations, which prescribe a structured two-stage evaluation process. The first stage assesses compliance and technical functionality; the second stage awards price and B-BBEE preference points under either the 80/20 or 90/10 system depending on the contract value. Understanding this process in detail gives bidders a significant advantage in preparing targeted, competitive submissions.

Stage 1: Compliance Check and Functionality Evaluation

Every bid is first assessed against mandatory compliance requirements before it is evaluated on merit. These requirements are pass/fail in nature: a bid that fails any mandatory requirement is disqualified regardless of the quality of its technical proposal or the competitiveness of its price. Common mandatory requirements include CSD registration, valid tax clearance, specific professional registrations (e.g., ECSA, SACPCMP, SAICA), CIDB contractor grade (for construction), and the correct completion and signing of all SBD forms. Some tenders also require attendance at a compulsory briefing session, with the attendance register as proof.

Bids that pass the compliance check are then evaluated for functionality (technical merit). Functionality is scored using a pre-determined evaluation framework set out in the bid specification, which assigns weighted marks to specific criteria such as relevant experience, methodology, key personnel qualifications, and project plan. Each evaluator scores each bid independently, and the scores are moderated by a convenor. Bidders must achieve the minimum functionality threshold — typically 70 out of 100 — to proceed to the price and B-BBEE evaluation. Bids that fall below this threshold are eliminated from further consideration.

Compliance check is pass/fail before any merit evaluation occurs
Functionality is scored against criteria published in the bid specification
Each evaluator scores independently; scores are then moderated
Minimum functionality threshold is typically 70% of available functionality points
Bids below the threshold are eliminated before price evaluation

Stage 2: Price Evaluation and B-BBEE Preference Points

Bids that pass the functionality threshold are then scored on price and B-BBEE preference points. The weighting depends on the contract value: for contracts up to R50 million, the 80/20 system applies, giving 80 points for price and 20 points for B-BBEE preference. For contracts above R50 million, the 90/10 system applies, giving 90 points for price and 10 points for B-BBEE preference. Price points are calculated using a formula that assigns the maximum 80 or 90 points to the lowest compliant bid and proportionally lower scores to higher priced bids. This means that being the cheapest bid is worth 80 or 90 points, while every rand above the lowest price reduces your score.

B-BBEE preference points are awarded based on the bidder's B-BBEE status level: Level 1 earns 20 points (under 80/20) or 10 points (under 90/10), Level 2 earns 18 or 9 points, Level 3 earns 14 or 6 points, Level 4 earns 12 or 5 points, and so on down to Level 8 which earns 2 or 1 point. Non-compliant contributors earn zero B-BBEE preference points. The total score for each bid is the sum of its price score and B-BBEE preference score, and the bid with the highest total score is recommended for award, subject to the bid adjudication committee's approval and the procuring institution's right to evaluate value for money.

80/20 system applies to contracts up to R50 million
90/10 system applies to contracts above R50 million
Price points are calculated proportionally: lowest price gets maximum points
Level 1 B-BBEE: 20 preference points (80/20) or 10 preference points (90/10)
Highest combined score wins, subject to BAC approval

Bid Adjudication and Award

The bid evaluation committee (BEC) prepares a recommendation report based on the scored evaluation, including the ranked scores of all qualifying bidders, a motivation for the recommended bidder, confirmation of reference checks and site visits conducted, and any risk factors identified. This report is submitted to the bid adjudication committee (BAC), which is a higher-level committee with delegated authority to approve contract awards. The BAC may accept, reject, or refer the BEC's recommendation back for clarification.

Once the BAC approves an award, a formal notification is issued to the successful bidder, typically in the form of a letter of award or order. Unsuccessful bidders are entitled to receive written notification that they were unsuccessful. Upon request, unsuccessful bidders are also entitled to a written debriefing explaining why they were not successful, which is a right enforced under the PPPFA Regulations. All award decisions above certain thresholds must be published in the government tender bulletin and on the eTender portal within prescribed timeframes.

BEC prepares an evaluation report with ranked scores and a motivation
BAC reviews and approves, rejects, or refers the BEC recommendation
Successful bidder receives a formal letter of award
Unsuccessful bidders have the right to written feedback on request
Awards above prescribed thresholds must be published on the eTender portal

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Frequently Asked Questions

Can the procuring institution deviate from the published evaluation criteria?

No. The evaluation criteria and their weightings must be published in the bid specification before the closing date, and evaluators are not permitted to add new criteria or change weightings after bids have been received. Changing the evaluation criteria after submission would constitute irregular expenditure. If you believe your bid was evaluated against criteria that differ from those published, you have grounds for a review or appeal under Section 62 of the MFMA or Section 8 of the PPPFA.

What does 'value for money' mean in the context of bid evaluation?

The PPPFA allows procuring institutions to deviate from the highest-scoring bidder in exceptional circumstances if that bidder does not represent value for money. This is a discretionary power that must be motivated in writing and approved at the appropriate level. In practice, it is used sparingly and usually involves situations where the winning bidder's price is significantly higher than market norms, or where due diligence reveals capacity concerns not apparent from the bid documents.

How are reference checks conducted during the evaluation?

Where the bid specification requires the submission of reference projects, the evaluation committee will typically contact the listed referees by telephone or email to verify the accuracy of the information provided and to obtain a performance assessment. False or misleading references are grounds for disqualification and may be referred to the National Treasury as a supply chain management practice irregularity. Always obtain prior consent from your referees before listing them and brief them on the key performance aspects they may be asked about.

What is the difference between a functionality evaluation and a quality evaluation?

In standard PPPFA evaluations, 'functionality' is the term used for the scored technical assessment stage. Some contracts, particularly in the consulting and professional services sector, may use a quality-cost based evaluation (QCBS) approach borrowed from World Bank or Development Finance Institution frameworks. Under QCBS, quality (technical merit) is typically weighted at 70% to 90% and cost at 10% to 30%, giving greater emphasis to technical excellence than the standard PPPFA 80/20 price-heavy approach. Check whether the bid uses PPPFA or a donor-funded QCBS framework before structuring your proposal.

Can I challenge a tender award I believe was made irregularly?

Yes. Unsuccessful bidders can challenge an award through several mechanisms: requesting written debriefing feedback (a right under PPPFA Regulations), lodging a formal complaint with the procuring institution's accounting officer, approaching the National Treasury, lodging a complaint with the Public Protector, or approaching the High Court for judicial review under PAJA (Promotion of Administrative Justice Act). Court challenges must typically be brought within 180 days of becoming aware of the decision. Keep all your bid submission evidence in case of a legal challenge.

What is a bid evaluation committee and who sits on it?

A bid evaluation committee (BEC) is a panel of officials appointed by the procuring institution to assess bids on technical merit and price. The BEC typically includes subject matter experts from the relevant department or directorate, a supply chain management official, and in some cases an independent technical advisor. BEC members must declare any conflict of interest before evaluating any bid. The BEC does not make the final award decision — that authority rests with the bid adjudication committee (BAC).

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