Government has a preferential procurement policy. This means government takes into account factors other than price when awarding a tender. These factors are calculated according to a points formula. If you want to take advantage of preferential points, you must fill in the relevant forms. The National Preferential Procurement Policy Act sets out the general framework to be followed in creating a preferential policy. In the Western Cape, Provincial government bodies who have not developed a preferential procurement policy specific to their department, follow the Western Cape Preferential Procurement Policy.

The Public Financial Management Act sets out the other general rules which government must follow in issuing tenders, and should be read in conjunction with the regulations.

At national level, preferential factors include:

• local manufacture of goods
• equity ownership by previously disadvantaged individuals
• equity ownership by women.

The points formula used is described in WCBD 6.1, which must be completed. (See how tenders are awarded.)

For tenders under R500 000, an "80/20" points system is used. (That means that tenders are evaluated 80% on price and 20% on points for factors such as historically disadvantaged individual status, ownership by women, etc.) For tenders over R500 000, a "90/10" system is used.

Not all the preferential factors will apply for every tender. The tender documents should indicate which preferential factors apply to your tender. These factors, and their "WCBD" forms, are:

• Equity ownership by historically disadvantaged individuals, women and the disabled: WCBD 6.1 (all bids) or WCBD 6.2 (sales and letting of assets).
• Small business: WCBD 6.3
• Active involvement in community: WCBD 6.7
• Locally manufactured products: WCBD 6.4
• Use of measures to standardise skills of your workers: WCBD 6.5
• Development of human resources of your staff: WCBD 6.6
• Enterprise is located in the Western Cape, for work in the that province: WCBD 6.9
• Enterprises located in a region for work to be done in that region: WCBD 6.10
• Enterprises located in a municipality for work to be done in that municipality: WCBD 6.11

Recently Introduced Factors:

• Export-oriented production to create jobs: WCBD 6.8
• Enterprises located in rural areas: WCBD 6.12

Each local government body has its own procurement policy.

The City of Cape Town's procurement policy is here.