How government tenders score price and specific goals
How the PPPFA's 80/20 and 90/10 systems split points between price and specific goals, who wins, and why false claims can cost you the contract.
By Achekam · · 5 min read · For Running a business businesses in South Africa
A department or municipality does not simply hand its contract to whoever quotes the least. The price you put in earns points, the specific goals your business meets earn more, and the two are added together. A bid can be the cheapest on the table and still lose.
That system comes from the Preferential Procurement Policy Framework Act, usually shortened to the PPPFA. If you bid for public work in South Africa, it decides how your bid is ranked, so it is worth knowing how the points are split before you settle on a price. This article walks through the two scoring systems, where the goals come from, how the winner is chosen and what happens when a bidder claims preference it is not entitled to.
The 80/20 and 90/10 systems
The PPPFA requires an organ of state to apply a preference point system. Which version applies turns on the value of the contract, measured against a prescribed amount.
- Above the prescribed contract value, the Act sets a split of 90 and 10: the lowest acceptable tender scores 90 points for price, and up to 10 points go to specific goals.
- At or below the prescribed value, the split is 80 and 20: the lowest acceptable tender scores 80 points for price, and up to 20 points may be allocated for specific goals.
In both, price carries most of the weight and the full price score goes to the lowest acceptable tender. What changes is the room left for specific goals. On a smaller contract the goals can swing more of the result, so a business that meets them may beat a cheaper rival more easily.
Two words in the Act deserve attention. "Lowest" is obvious. "Acceptable" is not: a tender that fails the conditions of the invitation is not in the running, however low its price. Before you start costing, read the invitation's scoring section for how bids above the lowest are scored on price.
Specific goals are named up front
The Act requires that any specific goal for which points are awarded must be stated in the invitation to tender. A buyer cannot decide after the closing date that some new goal deserves points.
That is useful to a bidder. Before you spend a day pricing, you can read the invitation and see exactly which goals carry points, how many and what proof is asked for. Make a short table for yourself:
| Goal named in the invitation | Points available | Proof the bid asks for | Can we prove it today? |
|---|---|---|---|
| (copy each goal word for word) | (as stated) | (certificate, affidavit, other) | yes / no / by when |
If a goal depends on your B-BBEE status, the paperwork small businesses use is covered in B-BBEE sworn affidavits for small businesses. If you cannot prove a goal before the closing date, assume you will score nothing for it and price with that in mind.
Highest points usually wins
Once the price points and goal points are added, the PPPFA requires the contract to go to the tenderer with the highest points, unless objective criteria justify awarding it to someone else.
A worked example in words shows how this plays out. Two suppliers bid for the same cleaning contract. The first quotes the lowest acceptable price, so it takes the full price score, but it meets none of the specific goals in the invitation. The second is somewhat dearer, so it scores fewer price points, but it meets every goal and earns those points in full. If the second bidder's total is higher, the Act points to the second bidder, even though it was not the cheapest.
The exception is narrow by its own wording. It needs objective criteria, not a preference for a familiar supplier. If you lose a tender you scored highest on, it is reasonable to ask the buyer what objective criteria were relied on.
False information and cancellation
Points for specific goals depend on what the bidder declares, and the Act backs that with a sharp remedy. It lets an organ of state cancel, at its sole discretion, a contract awarded on the strength of false information that the tenderer gave to secure preference.
"At its sole discretion" means the buyer does not need your agreement, and the risk lands after you have won and perhaps started work. The practical rules follow from that:
- claim only goals you can prove with documents you hold today;
- check that every certificate or affidavit is current on the closing date, not just when you filed it;
- keep a copy of exactly what you submitted, so you can show what you claimed and why;
- if your circumstances change before the award, tell the buyer rather than hoping it goes unnoticed.
You can read the original text of the Act, including its section on preference points, on the government's page for the Preferential Procurement Policy Framework Act 5 of 2000.
Pricing the bid and recording the decision in Achekam
Because price carries most of the points, the number you put on the form has to be one you can defend line by line. In Achekam, a bid's price is built line by line as cost plus markup from your rate card, under the tender's Pricing & BOQ tab, and then locked as a version. If a bill of quantities has been read in from the tender documents by AI, it changes the price only when a person applies it. Nobody's price moves because a document was uploaded.
Achekam also asks you to decide, on the record, whether to bid at all. Every bid or no-bid decision must give a reason, and a decision to bid on a tender of R5 million or more must name an active partner as approver. The disqualification check on the tender page is advisory: it flags concerns but does not stop a decision to bid, so a person still has to weigh whether the business can meet the conditions that make a tender acceptable.
Writing the reason down is worth the minute it takes. Over a few months, the reasons show where you keep losing points: goals you could not prove, prices that were too high, contracts that were too large. For the steps after the decision, see lodging a tender bid.
Before you price your next tender
Start with the invitation, not the spreadsheet. Find out whether the 80/20 or 90/10 split applies, list every specific goal and its proof, and be honest about which you can claim. Then build the price, lock the version, record why you are bidding and, for a tender of R5 million or more, name the approver. The points system rewards bidders who know where their points will come from before they decide on a number.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
