Law & Regulation
Preferential Procurement Regulations, 2022
Prescribes how organs of state within the PPPFA framework apply the 80/20 and 90/10 preference-point systems: the value threshold dividing the systems, price-scoring formulas, tender-invitation disclosure requirements, and treatment where a tender's value is unclear at invitation stage. Commenced 16 January 2023, replacing the invalidated 2017 Regulations. Remains part of the operative framework as at the research cut-off; the uncommenced 2024 Public Procurement Act and draft 2026 regulations do not yet displace it.
Legal Significance
What This Instrument Does
Prescribes how organs of state apply the 80/20 (at or below the Rand-value threshold) and 90/10 (above it) preference-point systems, including price formulas, invitation disclosure of the applicable system and specific goals, and a determination process where the estimated value cannot be fixed at invitation stage. Gives procuring institutions room to determine their own preferential procurement policies and tender-specific goals within the parent Act, rather than prescribing the broader prequalification/designated-sector architecture of the invalidated 2017 Regulations. Instrument boundary: does not prescribe the entire tender lifecycle, budget authority, bid-committee system, technical responsiveness test or contract-management regime; does not independently create B-BBEE law and does not make every transformation measure a procurement goal.
Why It Matters
These Regulations directly affect tender evaluation economics. Infrastructure bidders need to know which system applies, which goals carry points, what evidence is required and how price will be normalised; authorities must specify these matters before bids are submitted and apply them consistently. Mismatch between institutional policy, the published invitation, the parent Act and the actual evaluation is the central risk, along with unsupported goal claims affecting award sustainability.
Key Provisions
- Regulation 2 — Application
Applies the Regulations within the PPPFA framework and requires an organ of state to determine its preferential procurement policy. Practical consequence: obtain the current policy and tender terms — the Regulations are not a complete institution-specific policy.
- Regulation 3 — Identification of system and goals
Requires the tender invitation to stipulate the applicable preference system and specific goals, with points allocated to each. Practical consequence: goals and evidence should not be created or materially changed after bids are submitted.
- Regulation 4 — 80/20 system
Prescribes the price formula and allocation of points for tenders at or below the stated Rand-value threshold. Practical consequence: bidders can model the commercial effect of price movement and available goal points.
- Regulation 5 — 90/10 system
Prescribes the price formula and allocation of points for tenders above the stated threshold. Practical consequence: price carries greater relative weight for larger procurements, including many infrastructure packages.
- Regulation 6 — Unclear tender value
Provides a process where the estimated value cannot be determined at invitation stage and the appropriate system becomes known after evaluation. Practical consequence: tender documents should explain the possible systems.
- Regulations 4–6 — Price definition and scoring base
Regulates comparative price calculations, including price after unconditional discounts where applicable. Practical consequence: commercial schedules and discounts must be drafted so the scored price is clear and auditable.
- Tender-specific provisions — Specific goals
Leaves institutions to identify lawful specific goals under their policy and allocate the prescribed maximum points in the invitation. Practical consequence: do not assume B-BBEE is the only possible goal or that the same points apply across authorities.
- Evidence provisions — Proof of claimed goals
Requires claims to be supported in the manner stated by the procuring institution and governing framework. Practical consequence: validate evidence across consortium members before bid submission.
- Award provisions — Highest-point tender and objective criteria
Operates with PPPFA section 2's general award rule and lawful objective-criteria exception. Practical consequence: a departure from ranking requires a defensible statutory basis and decision record.
- Remedy provisions — False information and non-compliance
Supports action where a bidder obtained preference through false information, subject to lawful process. Practical consequence: authorities should monitor material claims; contractors should retain substantiation.
InfraLex Relevance
The current operative detail beneath the PPPFA, translating the statute's preference architecture into bid-level scoring while preserving institution-specific policy choice — analysed separately from the expired 2017 provisions and the uncommenced future framework.
Legal Framework Position
- Public ProcurementImplementing Instrument
Primary / Parent Instrument
Instrument Overview
- Official Citation
- Government Notice 2721 of 2022; Government Gazette 47452, 4 November 2022
- Instrument Type
- Regulation
- Source Language
- English
- Enactment Date
- 4 November 2022
- Effective Date
- 16 January 2023
- Last Verified
- 6 September 2026