Tenders, BBBEE, PPPFA, Corruption

There is so much talk nowadays of corruption with tenders that I thought it worthwhile addressing.

I like being positive about SA, but I do accept that there are cases of corruption. I’m confident though that there are checks and balances to identify problems and sort them out – as best as any government can do, which is not always perfect.

To address the issue of tenders: Government has passed an act the PPPFA act (Preferential Procurement Policy Framework act, which dictates how government organs should handle procurement. It lays down requirements for how tendering should work, and has a mechanism for disputes.)

Now we should realize that whenever a tender is issued, many businesses will compete for it. In any tender race there could be say 100 companies competing. Only 1 will win while the remaining 99 will be highly upset at losing the tender. None of those 99 will admit to being worse than the winner. None will accept defeat graciously and in a free market and competitive system they should fight hard to win. What does happen unfortunately is the losers are likely to accuse the government of favouritism, or the winner of corrupting the system.
The beauty of the PPPFA is that losers can complain. In previous years, with other governments there was no transparency and we heard of tenders being awarded to government ministers’ friends and family. In those days there was no dispute mechanism, which is why the situation is different today. As I’ve said, I accept there is corruption taking place, but a lot of the complaints are simply a matter of sour grapes. “If I don’t win the tender, then it means that the winner won illegally, because he/she is a relation of the minister, the councilor etc. Of course there is nothing wrong with the premier’s wife winning a tender, or being involved in a big B-BBEE deal. A lot of people feel it is wrong, and get emotional – after all B-BBEE is an emotional issue, particularly amongst people who do not understand it properly.

A company that loses a tender should rather look at how they could have won it, or what they could do to win the tender. Complaining about it is a rather unproductive activity.
So how do you win:
1) Understand the requirements of the tender
2) Understand the requirements of the act under which the tender falls, or the customer’s procurement policy.
3) Offer your tender in line with the requirements.
I find too many businesses do not understand how their tender, or offer to do business is going to be evaluated. Too many businesses who do business with government do not even know that the PPPFA takes precedence over B-BBEE. Too many businesses who do business with ESKOM do not understand that ESKOM has a procurement policy called “The ESKADAAT”. They do not know what the requirements of ESKADAAT is. How can you win a tender if you don’t understand the rules?
Too many people disagree with the process – whether BEE or PPPFA or ESKADAAT – to actually win the business.

Let’s make it clear – your job, in your business is to get and retain business. My job, is to help you understand how to get that business. My job is to visit the companies and government and help them understand that their tendering process, or even their BEE questionnaires, is wrong, or can be improved (in terms of the acts). The job of politicians (which I am not) is to make or change the laws.

Next time you lose a tender, ask what you could have done to win it. Next time you put in a tender, make sure you beat the other 99 businesses competing really hard for the business.
Let the others complain and moan about losing business.

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