PPPFA NO 5 OF 2000 AND REGULATIONS

1
PPPFA NO 5 OF 2000 AND REGULATIONS
2
PPPF ACT NO OF 2000 AND REGULATIONS

• PURPOSE
• To give effect to constitutional requirements as
  stipula- ted in sections 217(3) and 217(2)
• To address the imbalances of the past.
• Thus allowing for a preference system without
  forfei- ting the principles of fairness,
  equitable, competitive- ness, transparent and
  cost effectiveness
• PPPFA and Regulations came into effect on
• 10 August 2001

3
APPLICATION OF THE ACT

• Compulsory when applying the PPPFA to consider
  the following
• Points for HDI ownership.
• Proviso HDI must be actively involved in
  day-to- day management of business.
• RDP-goals to be promoted must be clearly
• specified in the tender documents, including
• points.

4

• Goals must be measurable, quantifiable and moni-
• tored for compliance.
• Tender must be awarded to tenderer who scored
  the highest number of points, unless sound
  reason
• justify award to another tenderer.
• Sound reason must stand the test of any court of
  
• law.
• Tax matters must be in order.

5
POSSIBLE GOALS TO BE ACHIEVED

• The promotion of South African owned enterprises
• The promotion of export orientated production to
  create jobs
• The promotion of SMMEs
• The creation of new jobs or the intensification
  of labour absorption.

6

• The promotion of enterprises located in a
  specific province for work to be done or services
  to be rendered in that province.
• The promotion of enterprises located in a
  specific region for work to be done or services
  to be done in that region
• The promotion of enterprises located in a
  specific municipal area for work to be done or
  services rendered in that municipal area
• The promotion of enterprises located in rural
  areas

7

• The empowerment of the work force by standar-
  dising the level of skill and knowledge of
  workers
• The development of human resources, including by
  assisting in tertiary and other advanced trai-
  ning programmes, in line with key indicators such
  as percentage of wage bill send on education and
  training and improvement of management skills and

• The upliftment of communities through, but not
  limited to, housing, transport, schools,
  infrastruc- ture, donations and charity
  organisations.

8

• POINTS ALLOCATION
• Previously the system operated on a 88/10/2 basis
  for contracts up to R2milion only.
• (No preference for all amounts exceeding
  R2million)
• i.e. Price max 88 points
• Equity ownership max 10 points
• Women ownership max 2 points
• Tenders would be awarded to tenderers who scored
  the highest number of points

• The 90/10 system was only applicable to Projects
• by Department of Public Works irrespective
  of
• amount of contract.

9

• CURRENT SITUATION (Based on 2001 regulations)
  Preference applicable to all tenders.
• Contract less than R500,000 apply 80/20 system
• i.e.
• Price Functionality max 80 points
• HDI and other RDP goals max 20 points
• This means government is prepared to pay a 25
  premium on these contacts.

10

• Contracts in excess of R500,000 apply 90/10
  system.
• i.e.
• Price and Functionality Max 90 points
• HDI and other RDP goals Max 10 points
• This equals to a 11,11 premium which govern-
  ment pays for these contracts.

11

• CONCERNS/CHALLENGES
• No formulated means of applying policy.
• (GOALS ARE SET BY OFFICIALS WITHOUT SPECIFIC
  TARGETS TO BE ACHIEVED)
• Lack of capacity/systems to monitor fronting
  Rent a Black.
• Non uniform applications by various forms of
  State.
• BEE and PPPFA not aligned.

12

• Limited expertise and knowledge in all spheres of
  government of how to implement and apply act.
• Fragmented interpretation of definitions.
• Some RDP goals are not measurable.
• Calculations are laborious (Too many calculations)