In January 2024, significant amendments to the Preferential Procurement Policy Framework Act (PPPFA) came into effect, fundamentally changing how government tenders are evaluated and awarded. Yet most businesses are still submitting bids using outdated strategies.
The result? Technically compliant bids that lose on points they didn't even know existed.
If your tender success rate has dropped recently, this might be why.
What Actually Changed in the PPPFA?
1. Enhanced Local Content Requirements
The new regulations have increased local content thresholds across multiple designated sectors. What used to require 40% local content might now demand 60% or higher.
Affected sectors include:
- Furniture and fittings
- Electrical and telecom cables
- Valves and actuators
- Rail rolling stock
- Clothing, textiles, and leather
- Steel products and components
- Pharmaceuticals
The catch: You need a SABS or NRCS verification letter proving your local content claims. Self-declaration is no longer sufficient for most categories.
2. Stricter B-BBEE Verification
The days of submitting an affidavit for your B-BBEE status are numbered. The new framework requires:
- Valid B-BBEE certificates from accredited verification agencies
- Annual re-verification (certificates older than 12 months may be rejected)
- Specific sub-minimum scores for certain categories (not just an overall level)
Many businesses have been caught off-guard, submitting expired certificates or generic affidavits that no longer meet requirements.
3. New Prequalification Criteria
Organs of state can now apply prequalification criteria that automatically exclude certain bidders. These include:
- Minimum B-BBEE level requirements (often Level 1-4)
- Minimum local content percentages
- Historical contract performance records
- Specific sub-contracting commitments
Critical insight: These aren't preferences—they're mandatory requirements. Fail them, and your bid is disqualified before evaluation even begins.
4. Revised Points System
The 80/20 and 90/10 preference point systems now include enhanced functionality thresholds. Bids must often score 70-80% on functionality just to have price considered.
The 5 Mistakes Killing Your Bids Under the New Rules
Mistake #1: Using Last Year's B-BBEE Certificate
Your B-BBEE certificate from March 2023? It's likely invalid now. Verification agencies are being stricter, and organs of state are rejecting certificates that are more than 12 months old, missing specific element scores, or from non-SANAS accredited agencies.
Fix it: Schedule your re-verification 3 months before expiry.
Mistake #2: Self-Declaring Local Content
Self-declaration used to work. Now it triggers automatic scrutiny. SABS verification letters are becoming mandatory for designated sectors.
Fix it: Get your products verified proactively. A SABS local content verification takes 4-6 weeks—too long if you're responding to a tender with a 21-day deadline.
Mistake #3: Ignoring Prequalification Criteria
Many businesses skim the prequalification section, assuming it's standard boilerplate. Under the new rules, this section determines whether your bid is even opened.
Mistake #4: Generic Subcontracting Commitments
Vague promises to "support local businesses" no longer score points. The new rules require named subcontractors, specific scope allocations, signed commitment letters, and B-BBEE certificates for subcontractors.
Mistake #5: Submitting Without Functionality Self-Assessment
The increased functionality thresholds mean more bids are being eliminated before price is considered. If you're scoring 65% on functionality, your competitive price doesn't matter.
How to Adapt Your Tender Strategy
Before your next bid, verify:
- B-BBEE certificate validity and level
- Tax clearance PIN (valid and not suspended)
- CIDB registration and grading (for construction)
- Local content verification letters
- CSD registration status
The Bottom Line
The 2024 PPPFA changes aren't just regulatory updates—they're a fundamental shift in how government procurement works. Businesses that adapt quickly will capture market share. Those using outdated strategies will wonder why their win rate collapsed.
Don't let regulatory changes catch you off-guard.