What Is A Tender In South Africa? Definition, Process, And How To Win

If you’ve ever asked “what is a tender in South Africa?” you’re already thinking like a supplier. A tender is simply a formal request from a buyer, often government, for goods, services, or construction work, where you compete on compliance, capability, and price. Done right, tenders can become a steady pipeline for your SME. Done wrong, they burn time and cash. This guide breaks down what a tender is, how the rules work, where to find opportunities, and how to respond strategically so you improve your win rate. You’ll see practical examples, current trends (like online submissions and functionality scoring), and step-by-step advice for South African entrepreneurs, SMEs, and suppliers. Let’s demystify tenders and help you go from browsing to winning.

What A Tender Is And How It Works

A tender is a structured procurement process where a buyer publishes specifications, conditions, and evaluation criteria, and invites written bids. Bids are evaluated against published rules (and must be comparable), and an award is made to the highest-scoring, compliant bidder. In South Africa, this system exists to deliver value-for-money, fairness, transparency, and socio-economic objectives like B-BBEE.

Types Of Solicitations: RFQ, RFP, RFI, EOI, And Panels

RFQ (Request for Quotation): Short, price-driven asks for standard goods/services, often under defined thresholds. Turnaround is quick: compliance still matters.
RFP (Request for Proposal): More complex solutions. You’ll be scored on functionality/technical approach, team, methodology, and price/preference.
RFI (Request for Information): Market-sounding. Not an award: it informs a future tender. Respond to shape the specs and get on the buyer’s radar.
EOI (Expression of Interest): Used to shortlist capable suppliers before a full RFP/RFQ.
Panels/Frameworks: Pre-approved lists of suppliers used over a period (e.g., three years). You compete to join the panel, then receive mini-competitions or call-offs.

Who Issues Tenders: National, Provincial, Municipal, SOEs, And Private Sector

National and Provincial Departments (e.g., Health, Transport) and Municipalities procure everything from office supplies to road works.
SOEs (state-owned enterprises) like Eskom, Transnet, PRASA, SANRAL issue major infrastructure and services tenders.
Private sector and large corporates issue RFPs via vendor portals for facilities management, IT, marketing, and more. Their processes mirror government but are governed by company policy rather than public legislation.

The Legal And Policy Framework

Public procurement sits within a clear legal framework. You don’t need to be a lawyer, but you do need to know what shapes the rules you’ll play by.

Key Laws And Regulations: PFMA, MFMA, PPPFA, Preferential Procurement Regulations, B-BBEE Act

PFMA: Public Finance Management Act governs national and provincial procurement, accountability and control.
MFMA: Municipal Finance Management Act sets rules for municipalities and municipal entities.
PPPFA: Preferential Procurement Policy Framework Act establishes how preference points (including B-BBEE) are integrated.
Preferential Procurement Regulations (latest in force): Give organs of state levers to set specific goals, define point systems, and outline processes. Always read each entity’s SCM policy.
B-BBEE Act and Codes: Govern verification, affidavits, and define how your level is determined, often linked to preference points or specific goals.

Price–Preference System: 80/20 And 90/10 Explained

Most organs of state apply one of two systems:

80/20: Used for lower-value bids (thresholds set by each organ’s policy). 80 points for price: 20 for specific goals (often aligned to B-BBEE or local socio-economic aims).
90/10: Used for higher-value bids. 90 points for price: 10 for specific goals.

The lowest-priced compliant bid doesn’t always win, functionality may act as a gate and preference points affect the final score. Know which system applies before you price.

CIDB, Local Content, And Sector-Specific Rules

CIDB: Construction works contracts require a CIDB contractor grading (e.g., 3CE, 4GB). No grade, no award.
Local Content: Some items are designated by the dtic for minimum local content (e.g., steel products, valves, buses, PPE categories). You must complete SABS/Annexure C, D forms and audit the bill of materials, errors can disqualify you.
Sector specifics: Built environment must comply with OHS and safety files: ICT may require OEM letters and software licensing compliance: healthcare may require SAHPRA or SABS approvals.

Ethics, Anti-Corruption, And Blacklisting Risks

Fronting, collusion, and bribery are criminal offenses. State employees doing business with the state are prohibited. Penalties include cancellation, damages, criminal prosecution, and listing on National Treasury’s Database of Restricted Suppliers and Tender Defaulters (and, for construction, possible CIDB sanctions). Keep clean governance: declare conflicts, avoid undisclosed subcontracting, and keep your documentation truthful.

Finding Tenders: Where And How

Winning starts with consistent deal flow. Build a simple system that surfaces relevant tenders early and filters out noise.

Government Portals: eTender Publication Portal, National Treasury, CIDB, And Municipal Sites

eTender Publication Portal (National Treasury): Central place for many organs of state to advertise opportunities and awards.
Departmental/Municipal Websites: Many municipalities still post on their own SCM pages. Always check “Notices” and “Supply Chain” sections.
CIDB: For construction works, use CIDB i-Tender to search by class and grade.
Provincial Portals: Gauteng e-Government, Western Cape eProcurement, and others publish RFQs and RFPs.

Private Sector RFPs, Vendor Portals, And Industry Bulletins

Corporate vendor portals: Register with banks, retailers, telecoms, and mines.
Industry bulletins: Engineering News, ITWeb, and trade associations often share RFPs.
Professional networks: OEM partner lists (e.g., Microsoft, Cisco) surface channel opportunities.

Search Strategies, Alerts, And Reading The Advert

Keywords: Search by CPV/commodity, region, and class (e.g., “panel,” “framework,” “maintenance,” “supply and delivery”).
Alerts: Set email alerts on portals and use aggregator services to avoid missing closing dates.
Read the advert: Note briefing dates, compulsory criteria (CIDB grade, local content, specific goals), and submission instructions. If you can’t meet a gate criterion, don’t waste the bid fee or your time, move on.

Are You Eligible? Minimum Requirements For Bidders

Before you chase the next opportunity, tighten your compliance pack. Many disqualifications are avoidable admin errors.

Core Registrations: CSD, SARS Tax Compliance PIN, CIPC, COIDA

CSD (Central Supplier Database): Register and keep data current (banking, directors, commodities). Buyers pull your report.
SARS Tax Compliance PIN: Must reflect “Compliant” at evaluation and award. Fix outstanding returns early.
CIPC: Your company must be active and in good standing. Update directors and annual returns.
COIDA: Register and maintain a Letter of Good Standing for work involving labor on site.

Evidence And Certificates: B-BBEE/Affidavit, CIDB Grades, Safety Files, OEM Letters

B-BBEE: EME/QSE affidavits must be signed by a commissioner of oaths: larger entities need a valid B-BBEE certificate.
CIDB: Ensure your grading aligns with the tender class and value range. JV gradings are combined per CIDB rules.
Safety files: Method statements, risk assessments, medicals, competencies, checked before site handover.
OEM/support letters: Common in ICT, fleet, and specialized equipment to prove authorized supply and warranties.

Disqualifiers: State Employees, Fronting, Conflict Of Interest, And Past Performance

State employees and their close relatives are barred from doing business with the state.
Fronting or misrepresenting your B-BBEE status is a serious offense.
Conflicts must be declared. Hidden relationships can void an award.
Poor performance on previous contracts can lead to restriction or non-responsiveness, ask for reference letters and keep handover records to protect your track record.

The Tender Process Step By Step

Understanding the flow helps you plan capacity and cash.

Compulsory Briefings, Site Meetings, And Clarification Windows

If the advert says “compulsory,” attendance is non-negotiable. Arrive early, sign the register, and photograph the attendance sheet. Use the clarification window (usually via email) to ask questions, answers are shared with all bidders as an addendum.

Bid Document Structure: Returnables, Schedules, And Forms

Typical structure includes: invitation to bid, conditions, scope/technical specs, pricing schedule/BOQ, specific goals forms, SBD/MBD forms, local content declarations, and a checklist of returnables (CSD report, tax PIN, B-BBEE, CIDB, JV agreements, proof of address, references). Build your own “bid pack” folder and reuse templates.

Submission Rules: Sealed Envelopes, Online Uploads, Deadlines, And Addenda

Physical: Mark the envelope exactly as instructed. Use a second sealed inner envelope if required.
Online: Many organs now accept portal uploads or email submissions. Watch file size and format limits: submit early.
Deadlines: Late bids aren’t opened. Addenda can change dates and specs, acknowledge them in your submission.

Evaluation Stages: Administrative, Functionality, And Price/Preference

Administrative responsiveness: Are all mandatory documents present and valid? 2) Functionality/technical: Scored against minimum thresholds (e.g., 70/100). Fail here and your price isn’t considered. 3) Price and preference points (80/20 or 90/10) determine the final score among technically qualifying bidders.

Award, Standstill/Appeals, And Contract Signing

The intent to award or final award is published. Some entities allow a standstill period for objections. If you lose, request a debrief in writing, learn your gaps. If you win, expect a letter of award, contract, and possibly performance security before starting.

Worked Example: A Small Municipal Construction RFQ

The opportunity: A local municipality issues an RFQ for “Patching Potholes and Minor Road Repairs,” estimated at R450,000, CIDB 2CE or higher, 80/20 system, functionality threshold 70.
Prep: You confirm your CIDB 2CE, COIDA letter, CSD, tax PIN, traffic accommodation plan, and availability of a TLB and team. You attend the compulsory site meeting.
Functionality criteria: Method statement (20), team experience (20), similar projects (30), equipment (30). You include three signed reference letters with contactable details and photos of completed work.
Pricing: You cost materials (asphalt, tack coat), labor, plant, traffic control, waste disposal, prelims, overheads, and a modest profit. You check if local content applies to bituminous products, if designated, you complete SABS forms.
Preference/specific goals: You submit a valid EME affidavit and commit to using local labor (if specified as a goal).
Submission: Uploaded via the municipality’s portal two days early. You receive a confirmation receipt.
Outcome: You pass admin, score 78/100 on functionality, your price is competitive, and with preference points you rank first. After award, you sign the contract and provide a 10% performance guarantee if required.

Pricing And Bid Strategy

Price wins and loses deals, but only after you pass compliance and functionality. Build a pricing engine that’s auditable and realistic.

Building A Compliant Costing Model And Cash Flow Plan

Start from the scope and BOQ. Quantify materials, labor hours, plant, overheads, preliminaries, and site setup.
Add compliance costs: safety gear, testing, quality records, insurance, performance security premiums.
Cash flow: Government aims to pay within 30 days, but delays happen. Model 45–60 days. Arrange overdrafts, invoice discounting, or supplier terms to cover the first two months.
Sensitivity test: What if fuel jumps 10%? What if you hit 5% rework? Price with small contingencies but remain competitive.

Understanding Preference Points, B-BBEE, And Designated Subcontracting

Specific goals points can hinge on your B-BBEE level, local participation, youth/women/persons with disabilities, or SMME inclusion, check the bid.
Some entities set designated subcontracting (e.g., 30% to EMEs/QSEs or local suppliers). Identify credible subs early and attach signed intent agreements.
Don’t overpromise. If you commit to goals, you’ll be required to report monthly.

Consortia, Joint Ventures, And Subcontracting Agreements

JV when you need combined capability, CIDB grading, or geographic presence. Create a JV agreement covering leadership, banking, decision-making, quality, and dispute resolution.
Subcontract where specialized skills are needed. Use clear scopes, rates, KPIs, and back-to-back terms to mirror the main contract.
Bank account and surety: Decide how payments flow. Buyers may require a JV bank account.

Risk Pricing, Escalation, And Local Content Calculations

Risk items: Unknown quantities, access constraints, after-hours work, price them explicitly or qualify them (if the bid allows qualifications).
Escalation: Many contracts are fixed for 12 months: longer terms may use indexes (CPI, SEIFSA). State your assumptions where the bid permits.
Local content: Calculate correctly with supplier declarations. Keep invoices and manufacturing proofs ready for audit, non-compliance can void an award.

After The Award: Delivery, Payment, And Performance

Winning is the start. Performance secures your reputation and future references.

Kickoff, Performance Security, SLAs, And Reporting

Kickoff: Hold a start-up meeting to align on the scope, timeline, health and safety, and communication protocol.
Performance security: Some contracts require guarantees (typically 5–10%). Factor the cost into your price.
SLAs and KPIs: Track response times, quality metrics, and deliverables weekly. Share progress reports proactively to avoid disputes.

Invoicing, Payment Terms, And Managing Delays Or Variations

Invoicing: Submit correct tax invoices with purchase order, delivery notes, timesheets, and sign-offs.
Payment: Public entities target 30 days. If delayed, follow up formally with SCM and the end-user. Keep a paper trail.
Variations: Never proceed on verbal requests. Get written variation orders with updated pricing and timelines.

Dispute Resolution, Termination Clauses, And Recordkeeping

Disputes: Use the contract’s escalation ladder, then mediation/adjudication if needed. For construction, NEC or JBCC procedures apply.
Termination: Understand default and convenience termination clauses.
Records: Keep contracts, correspondence, test certificates, delivery notes, and meeting minutes. They’re gold when you need references or face an audit.

Common Mistakes And How To Avoid Them

Even strong suppliers get tripped up by avoidable errors. Build checklists and slow down.

Administrative Non-Compliance And Missing Returnables

Expired tax PIN, unsigned SBD forms, missing CSD report, or forgetting to acknowledge addenda will sink you at stage one.
Fix: Use a standard returnables index and a two-person final check. Submit a day early.

Weak Technical Responses And Poor Evidence Of Capacity

Saying “we can do it” without proof doesn’t score. Evaluators want method statements, CVs with certifications, photos, and signed references.
Fix: Build a living library of project sheets, resumes, and quality plans. Tailor them to the scope.

Unrealistic Pricing, Cash Flow Gaps, And Performance Risks

Bidding below cost to “win something” backfires. You’ll bleed cash and fail on delivery.
Fix: Cost bottom-up, negotiate supplier terms, and include modest contingencies. If the numbers don’t work, don’t bid.

Conclusion

So, what is a tender in South Africa? It’s a transparent, rule-based way for public and private buyers to invite competition, and a reliable growth path for SMEs that master compliance, pricing, and delivery. Your next steps are simple: get your registrations right, set alerts for relevant tenders, refine a reusable bid pack, and price with discipline. Ready to find quality opportunities without the noise? Visit eTender SA to browse verified tenders, set smart alerts, and start winning more work.

Frequently Asked Questions

What is a tender in South Africa?

A tender in South Africa is a formal procurement process where a public or private buyer invites written bids for goods, services, or construction. Bids are evaluated against published rules for compliance, functionality, price, and preference points, aiming to ensure value-for-money, fairness, transparency, and socio-economic goals such as B-BBEE.

How does the 80/20 vs 90/10 system affect who wins a tender in South Africa?

For eligible bids, lower-value tenders usually use 80/20 (80 points price, 20 specific goals), while higher-value tenders use 90/10. Functionality may be a gate. The lowest price doesn’t always win; the highest total score after price and preference points determines the award.

Where can I find tenders in South Africa and set alerts?

Use the National Treasury eTender Publication Portal, departmental and municipal SCM pages, CIDB i-Tender for construction, and provincial portals. For private procurements, register on corporate vendor portals. Set email alerts on these platforms or use aggregator services to avoid missing briefing sessions and closing dates.

What documents do I need to be eligible to bid on tenders?

Keep a current CSD registration, SARS Tax Compliance PIN, active CIPC status, and COIDA Letter of Good Standing (for site work). Add B-BBEE affidavit/certificate, relevant CIDB grading, safety files, OEM/support letters, and required SBD/MBD forms. Missing or expired returnables commonly cause disqualification.

Can foreign companies bid for South African government tenders?

Yes, foreign firms can bid if they meet the tender’s mandatory requirements. Typically this includes CSD registration, tax compliance, and full adherence to local content, security, and sector rules. Partnering with local entities can improve B-BBEE or specific goals scoring, but compliance and capability remain decisive.

How long does the tender process take from advert to award?

Timelines vary by complexity. RFQs can close within 1–3 weeks and award shortly after, while large RFPs may run 2–6 months, including briefings, clarifications, technical evaluations, and approvals. Some entities allow an objections period before contract signing. Always check the bid timetable and addenda.