SA launches preferential buying rules

12 October 2011

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12 October 2011 | Angeline Albert

South Africa is gearing up to give its local suppliers a larger slice of the procurement pie with preferential public purchasing rules that come into effect on 7 December.

The regulations will empower the country‘s Department of Trade and Industry (DTI) to designate specific industries as of critical or strategic importance. This would then be linked to tenders that state only locally manufactured products/product parts will be considered.

DTI minister Rob Davies said the designation of products/product parts/lines is part of government plans to use procurement to increase domestic production and employment.

The minister told SM that the incoming regulations would apply to raft of critical industries starting with infrastructure projects, including electricity transmission lines and rail contracts.

Davies said: “We have a broad target of increasing the amount of suppliers of locally made goods from the current 30 per cent to 40 per cent. This is out of a total infrastructure spend of more than R800 billion (US$101.8 billion) over the next five years.

He added: “We say to foreign companies: ‘You come here and manufacture and you will be eligible for public sector contracts. You come here and bring your goods by boat, you won’t.’”            

At Johannesburg’s International Motor Show this week, Davies said: “We are looking at designating buses for local procurement wherein we would seek for government and state agencies to buy locally-manufactured buses.”

The DTI is taking the procurement lead as part of the government’s Broad-Based Black Economic Empowerment (BBBEE) plan, a policy that also now covers other marginalised groups including women and the young. The Preferential Procurement Regulations will also see potential suppliers ranked on a BBBEE scorecard. Purchasers will have to consider more than whether the supplier has black ownership with vendors measured across a range of criteria, including their employment and procurement policies.

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