📖 Tender Glossary

Government's legal duty to pay valid invoices within 30 days of receipt.

Example: Sipho's invoice was paid on day 28, just within the 30-day rule.

Rule for tenders above R30 million — 30% of the work must go to EMEs or QSEs.

Example: The Gauteng road tender required 30% subcontracting to local black-owned firms.

Preference points system for tenders under R50 million: 80 points for price, 20 for B-BBEE and goals.

Example: Even with a higher price, a Level 1 supplier can win on the 80/20 split.

Preference points system for tenders above R50 million: 90 points for price, 10 for B-BBEE.

Example: Big infrastructure projects use the 90/10 rule.

An official change to the tender after it was published. Always download the latest version.

Example: Priya nearly used the old specs — an addendum had changed the quantities.

The senior team that signs off the final winner — Bid Adjudication Committee or BAC.

Example: The BAC overruled the BEC and asked for a re-evaluation.

Auditor-General South Africa — checks if government spent money properly.

Example: The AGSA's report flagged irregular expenditure of R30 million at the department.

The formal process to challenge an award you believe was unfair.

Example: Sipho lodged an appeal within 14 days when he saw a non-compliant bidder won.

The official decision naming the winning bidder.

Example: Thabo's small construction company received the award letter for a R2 million road repair contract.

The official letter confirming you won the tender.

Example: Thabo framed his first award letter on his office wall.

Broad-Based Black Economic Empowerment — a government scoring system that rewards businesses owned or run by black South Africans.

Example: Fatima's 100% black-owned spaza is automatically a Level 1 contributor.

Proof of your B-BBEE level, issued by a SANAS-accredited verifier (or via affidavit for EMEs/QSEs).

Example: Mandla's verified B-BBEE certificate showed Level 2 status.

The body that investigates fronting and B-BBEE fraud.

Example: The B-BBEE Commission fined the company R10m for fronting.

Your overall score ranking, from Level 1 (best) to Level 8 (lowest), plus Non-Compliant.

Example: A Level 1 score earns 125% recognition for the buyer.

Letter from your bank confirming your business account details.

Example: Priya's bank emailed the confirmation letter within an hour.

A sworn statement at the police station declaring your turnover and black ownership — the cheap, fast B-BBEE proof for EMEs and QSEs.

Example: Thabo signed his EME affidavit at the Soweto police station for free.

Your formal offer to do the work for a specific price. The bid includes pricing, documents and proof you can deliver.

Example: Fatima dropped off her bid 30 minutes before the closing time at the SCM office.

A small guarantee (cash or bank letter) submitted with your bid to prove you are serious.

Example: The tender required a 2% bid bond — about R20 000 on a R1m project.

A neat folder (paper or digital) holding everything you submit. Use dividers and a page index.

Example: Mandla's tidy bid file with tabs made the evaluators' job easy.

A public meeting where bidders' names and prices are read aloud.

Example: Lerato attended the bid opening and heard 12 competitors' prices.

The company or person submitting a bid.

Example: There were 47 bidders for the school feeding tender in KwaZulu-Natal.

Black women, black youth, black people with disabilities, and unemployed black graduates — extra recognition under B-BBEE.

Example: Fatima qualifies twice as a black woman entrepreneur.

Being banned from doing business with government for a fixed period — usually 5 to 10 years.

Example: The fronting case got the company blacklisted for 10 years.

Bill of Materials — a detailed list of every item needed for the job.

Example: The BOM for the school build ran to 14 pages.

Bill of Quantities — measured quantities of materials and labour for construction tenders.

Example: Fatima priced every line in the BOQ for the clinic refurb.

A meeting where the buyer explains the tender. Sometimes attendance is compulsory.

Example: Miss the compulsory briefing and your bid won't be opened.

Money moving in and out of your business. Tender work often pays slowly — plan ahead.

Example: Johan kept 3 months of expenses in reserve to survive slow tender payments.

Civil Engineering specialisation under CIDB — roads, water, bridges.

Example: Mandla's company holds 4CE — civil works up to R6.5 million.

Signing over your right to be paid to a bank or financier as security.

Example: Mandla ceded his Eskom contract to his bank to access a working-capital loan.

Construction Industry Development Board — grades contractors 1 to 9 based on what size project they can handle.

Example: A CIDB Grade 3 contractor can bid on projects up to about R3 million.

Smallest grade — projects up to about R200 000. No proven track record needed.

Example: Thabo got CIDB Grade 1 within a week using only his ID and CIPC docs.

Highest grade — unlimited project size. Requires huge turnover and completed mega-projects.

Example: Only a handful of South African firms hold CIDB Grade 9.

Companies and Intellectual Property Commission — registers your company and keeps its records up to date.

Example: Johan registered his Pty (Ltd) with CIPC online in 2 days.

Only invited suppliers may bid — usually from a pre-approved panel.

Example: Johan was invited to a closed tender because his company sat on the DBSA panel.

The exact day and time bids must be received. One minute late means automatic disqualification.

Example: Priya set three phone alarms so she wouldn't miss the 11:00 closing time.

Aim to submit at least 1 hour before closing — traffic, queues and printer jams cost contracts.

Example: Priya's 'always submit by 10am' rule has never failed her.

Compensation for Occupational Injuries and Diseases Act. Employers must register and pay annually. You get a 'Letter of Good Standing'.

Example: Thabo paid his COIDA assessment so his cleaning team would be covered if injured at work.

A person legally allowed to witness sworn statements — police officers, magistrates and many lawyers qualify, for free.

Example: Sipho got his affidavit stamped by a Commissioner of Oaths at the SAPS station.

A larger team of companies bidding together, usually for big complex projects.

Example: The new airport tender was won by a 5-company consortium.

Central Supplier Database — the single registration every supplier needs to do business with government.

Example: Your CSD number must appear on the bid cover page.

Having every document ready before you even see a tender. Saves you when closing dates are tight.

Example: Thabo keeps a 'day-one' folder with CSD, tax pin, affidavit and bank letter ready to print.

Industries (like textiles, steel pipes, set-top boxes) where local content is mandatory.

Example: Buses are a designated sector — only locally assembled buses qualify.

Exempted Micro Enterprise — a business with turnover under R10 million. Gets automatic B-BBEE Level 4 (or better with black ownership).

Example: As an EME, Thabo only needed a sworn affidavit, not a full B-BBEE certificate.

Helping smaller black-owned businesses through loans, mentorship or free services.

Example: Lerato's mentorship of a township bakery earned her enterprise development points.

Expression of Interest — a short note saying 'we'd like to be considered'. Often used to build a shortlist.

Example: Priya sent an EOI for the upcoming Eskom maintenance panel.

The National Treasury portal where most government tenders are published — etenders.gov.za.

Example: Priya checks eTenders every Monday morning.

The team that scores bids — usually called the Bid Evaluation Committee or BEC.

Example: The BEC took 6 weeks to evaluate the school feeding tender.

The closing statement showing everything paid, retentions released, and balances settled.

Example: Lerato signed her final account 6 months after handover.

Unforeseen events (floods, riots, pandemics) that excuse late delivery.

Example: Priya invoked force majeure when the KZN floods blocked her trucks.

A pre-negotiated deal that lets a buyer place orders over time without re-tendering.

Example: Transnet uses framework agreements for fuel so it doesn't tender every month.

Pretending a black person owns or runs the business when they don't. It is illegal.

Example: Putting a black employee's name on the share register without real control is fronting.

Money spent where no value was received — like paying for a no-show event.

Example: Paying full deposit for a workshop nobody attended is fruitless and wasteful.

A pre-qualifying stage where the buyer checks if you can actually do the work before scoring price.

Example: Mandla scored 75/100 on functionality and qualified for the next round.

General Building specialisation under CIDB.

Example: Priya's 3GB grade lets her build small clinics and classrooms.

Any business with turnover above R50 million — must be verified by a SANAS-accredited agency.

Example: Once Johan's company crossed R50m, he had to switch from affidavit to a full Generic scorecard.

Selling an unpaid government invoice to a finance house at a discount to get cash fast.

Example: Fatima used invoice discounting to pay her staff while waiting for SAPS to pay.

Money spent without following SCM rules, even if value was received.

Example: Awarding a tender without 3 quotes is irregular expenditure.

Two or more companies teaming up to bid as one. Often used to mix capacity and B-BBEE level.

Example: Johan formed a JV with a black-owned EME to lift his B-BBEE score.

Key Performance Indicator — measurable target in your contract.

Example: One KPI was 95% on-time delivery.

Proof from the Compensation Fund that your COIDA payments are up to date.

Example: The construction tender wouldn't even open Lerato's bid without a Letter of Good Standing.

Pre-agreed penalty for every day you deliver late.

Example: The contract had liquidated damages of R5 000 per day past the deadline.

The percentage of your bid that is manufactured or sourced in South Africa.

Example: The clothing tender required 100% local content.

Measures whether black people are in real decision-making roles.

Example: Fatima as MD and 2 black directors scored full management control points.

A signed letter giving someone authority to sign or submit on your behalf.

Example: Johan signed a mandate letter so his manager could drop the bid in Pretoria.

Profit as a percentage of selling price. Different from markup.

Example: A 20% markup gives roughly a 17% margin.

What you add to your costs to make profit.

Example: Fatima used a 25% markup on her catering tender.

Master Builders South Africa — a voluntary trade body, but membership boosts your credibility on construction tenders.

Example: Johan's roofing company joined MBSA to win more private-sector work.

Municipal Finance Management Act — the law for how municipalities spend.

Example: Every municipal tender must follow MFMA procurement rules.

Memorandum of Agreement — a written deal between parties, often used with JVs.

Example: Lerato and her partner signed an MOA before bidding together.

National Credit Act — protects consumers and small businesses from unfair credit.

Example: The NCA capped the interest Sipho's supplier could charge.

National Home Builders Registration Council — required for any company building homes.

Example: The RDP housing tender required NHBRC enrolment before any work started.

Original Equipment Manufacturer — the company that actually makes the product.

Example: Johan needed an OEM letter from HP to bid on the laptop tender.

Any registered supplier may bid.

Example: Most municipal tenders are open tenders advertised on eTenders.

Some tenders demand originals; others accept certified copies (stamped at a police station or post office, not older than 3 months).

Example: Fatima's bid was rejected because her ID copy was certified 4 months earlier.

Fixed running costs like rent, salaries, insurance — not tied to one project.

Example: Lerato had to cover R40k of overheads each month even with no contracts.

The part of the B-BBEE scorecard that measures black ownership and control.

Example: Thabo's 100% ownership gave him full points on the ownership element.

Promotion of Access to Information Act — lets you request government documents, like scoring sheets.

Example: Mandla used a PAIA request to see why his bid lost.

Promotion of Administrative Justice Act — gives you the right to challenge unfair admin decisions like a bad award.

Example: Priya took the unfair award on review under PAJA.

Being placed on an approved list of suppliers a buyer can call when needed, usually for 3 years.

Example: Lerato's catering business landed a 3-year panel appointment with the Department of Health.

A bank or insurance guarantee paid after award — protects the buyer if you fail to deliver.

Example: Fatima paid a 10% performance bond on her R5m bakery contract.

Public Finance Management Act — the law governing how national and provincial government spends money.

Example: PFMA section 38 makes accounting officers personally responsible for wasteful spending.

Protection of Personal Information Act — rules about handling people's data.

Example: Priya's call-centre tender required a POPIA compliance plan.

First-round filter where only bidders meeting basic criteria (B-BBEE level, CIDB grade, locality) go forward.

Example: Only Level 1 and 2 suppliers pre-qualified for that tender.

Extra points added to your bid score based on your B-BBEE level and other goals (youth, women, disability).

Example: Lerato's youth-owned business picked up extra preference points.

The 2022 rules that set out how preference points work in tenders.

Example: Sipho studied the 2022 Preferential Procurement Regulations before bidding.

A draft invoice given before delivery, used to confirm price and quantity.

Example: Mandla sent a pro forma invoice so the buyer could create the purchase order.

The full process government uses to buy things — from advertising the tender to paying the supplier.

Example: The procurement process for the new clinic took 4 months from advert to award.

Private Security Industry Regulatory Authority — every security company and officer must be registered.

Example: Sipho's security business needed PSIRA registration before bidding on the SAPS guarding tender.

PO — the buyer's written instruction to deliver and invoice. Never start work without it.

Example: Lerato refused to deliver chairs until the PO was emailed.

Qualifying Small Enterprise — a business with turnover between R10 million and R50 million.

Example: Priya's QSE catering company used a simpler scorecard than big firms.

A formal price offer, often used for RFQs.

Example: Sipho emailed three quotes for the printer toner request.

A signed letter from a past client confirming you completed similar work.

Example: Lerato attached three reference letters from past municipal contracts.

The notice telling you you did not win, often with reasons.

Example: Fatima's regret letter said her price was 18% above the average.

National Treasury's public list of suppliers banned from government work.

Example: Always check the Restricted Suppliers List before partnering with a new supplier.

Money the buyer holds back (usually 5–10%) until the project is fully complete.

Example: R50 000 of Sipho's payment was held as retention until snags were fixed.

Request for Bid — similar to RFQ but usually for slightly larger amounts.

Example: An RFB was issued for school stationery in the Eastern Cape.

Request for Information — the buyer is gathering ideas before issuing a real tender. No award is made.

Example: Fatima answered the RFI to help shape the upcoming health tender.

Request for Proposal — a longer tender where the buyer wants you to suggest a solution, not just a price.

Example: Mandla's IT company submitted an RFP for a new payroll system.

Request for Quotation — a short, fast tender used for goods or services under R1 million.

Example: The municipality issued an RFQ for 50 office chairs and three suppliers quoted.

South African National Accreditation System — accredits the agencies that issue real B-BBEE certificates.

Example: Always check your verifier appears on the SANAS website.

South African Revenue Service. You need a tax pin from SARS to bid.

Example: Fatima logged into SARS eFiling to generate her tax compliance pin.

Invitation to Bid — the cover sheet with bidder details and the basic declaration.

Example: Priya filled out SBD 1 with her CSD number on top.

Declaration of Interest — declares any link to government employees.

Example: Johan declared that his cousin works at the municipality on SBD 4.

Preference Points claim form for B-BBEE.

Example: Lerato attached her affidavit to SBD 6.1 to claim 20 preference points.

Claim form for local production and content goals.

Example: Sipho ticked SBD 6.2 to show his clothing was made in South Africa.

Declaration of Bidder's Past Supply Chain Practices — disclose blacklistings, fraud, etc.

Example: Thabo ticked 'No' on every line of SBD 8 because his record was clean.

Certificate of Independent Bid Determination — confirms you didn't collude with other bidders.

Example: Signing SBD 9 means you swore you didn't share your price with rivals.

Standard Bidding Documents — the official forms every government tender requires (declarations, tax, B-BBEE, etc.).

Example: Mandla forgot to sign SBD 4 — his bid was disqualified.

Supply Chain Management — the unit inside government that runs tenders and pays suppliers.

Example: Submit your bid to the SCM office before 11:00.

A written description of every task you must complete under the contract.

Example: The scope of work for the cleaning tender included 12 offices, 3 toilets and the parking area.

SLA — a contract that spells out exactly what service you will deliver and at what quality.

Example: Johan's SLA promised 4-hour response time on IT call-outs.

A tender reserved only for certain groups, like 100% black-owned EMEs.

Example: The R5m school furniture tender was set aside for black-women-owned QSEs.

A visit to the actual site so bidders can see the work area first hand.

Example: Mandla drove to Kimberley for the site inspection at 8am sharp.

Money spent on training black staff. A key way for white-owned businesses to score B-BBEE points.

Example: Johan spent 3% of payroll training his apprentices and earned 8 skills development points.

Donations or projects benefiting poor black communities — 1% of net profit after tax target.

Example: Johan donated school shoes to a rural primary as his SED contribution.

The exact details of what the buyer wants — quantity, quality, brand, size, delivery time.

Example: The specification required SABS-approved cement, so Lerato made sure her supplier was certified.

A smaller company that does part of the work for the main contractor.

Example: Johan subcontracted the electrical work to a black-owned EME for B-BBEE points.

Spending money or time to grow black-owned suppliers in your value chain.

Example: Sipho gave his black-owned packaging supplier 60-day payment terms as supplier development.

Any signed legal statement made under oath in front of a Commissioner of Oaths.

Example: Lerato used a sworn affidavit instead of a paid B-BBEE certificate.

A SARS pin that proves your tax is up to date. Required for almost every tender.

Example: Mandla's bid was rejected because his tax pin had expired the day before closing.

Newer name for tax clearance — a digital pin SARS issues to prove you're compliant.

Example: The buyer used the TCS pin to verify Priya's tax status in real time.

A public invitation for businesses to bid on supplying goods, services or construction work to government or large buyers.

Example: Mandla saw a tender for cleaning services at the Polokwane municipality and decided to bid.

The locked box where physical bids are dropped before closing.

Example: Mandla arrived 20 minutes early to find the tender box at the municipal foyer.

Clause letting the buyer cancel even if you've done nothing wrong, usually with a notice period.

Example: Thabo's contract was terminated for convenience after a budget cut.

Often called TOR — the full brief for consulting or service tenders explaining the project goals.

Example: Sipho read the TOR carefully before deciding to bid on the water study.

Detailed rules issued by National Treasury that go with the PFMA.

Example: Treasury Regulation 16A covers SCM in national departments.

Bidders submit price in one sealed envelope and technical proposal in another. Price is only opened if you pass technical.

Example: Johan's consulting bid used the two-envelope system.

Unemployment Insurance Fund. Every employer must register and contribute monthly.

Example: Johan registers each new staff member for UIF in their first month.

When a company approaches government with its own project idea, without a tender being advertised.

Example: Thabo submitted an unsolicited bid for a solar streetlight pilot in his township.

How long your price stays fixed after submitting — usually 90 or 120 days.

Example: Johan's bid had a 90-day validity, so he could not change his price during that time.

Written change to the original scope of work, with new pricing.

Example: Johan got a variation order to add 2 extra classrooms to the build.

Value-Added Tax — 15% added to most goods and services. Mandatory once turnover passes R1 million per year.

Example: Once Fatima's bakery passed R1m in sales, she had to register for VAT.

A price quoted before VAT is added.

Example: Priya's quote of R100 was VAT exclusive — the buyer paid R115 total.

A price that already includes the 15% VAT.

Example: Mandla quoted R115 VAT inclusive — meaning R100 plus R15 VAT.

Black ownership confirmed and signed off by a SANAS-accredited verifier.

Example: Priya's 60% verified black ownership pushed her to Level 2.

Cash you need to buy stock, pay staff and run the job before being paid.

Example: Thabo needed R200k working capital to start his cleaning contract.