ON JUNE 14 2016 the Treasury published new draft Preferential Procurement Regulations in terms of the Preferential Procurement Policy Framework Act 5 of 2000 ("the Procurement Act"). The draft regulations, once finalised, will replace the 2011 Preferential Procurement Regulations.Arguably the most notable and controversial of the draft Regulations is Regulation 10, which purports to grant organs of state an entitlement to apply "pre-qualifying criteria in the evaluation of a tender". Without limiting the nature of such pre-qualifying criteria, Regulation 10 specifically permits an organ of state to apply a pre-qualifying criterion which requires a tenderer to have "a stipulated minimum B-BBEE status level". A tender that fails to meet a pre-qualifying criterion will not be an acceptable tender.The effect of Regulation 10, specifically its creation of an entitlement to exclude bidders which do not have a stipulated B-BBEE status level, stands to cause various bidders to be excluded f...

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