The two systems
| Tender value (incl. taxes) | Price | Specific goals |
|---|---|---|
| Up to R50 million | 80 points | 20 points |
| Above R50 million | 90 points | 10 points |
The buyer must say in the tender documents which system applies and which specific goals earn points. If it is unclear whether a tender falls under 80/20 or 90/10, the lowest acceptable tender decides (the highest, for contracts that earn the state income).
The price formula
For the 80/20 system, regulation 4 sets the formula:
Ps = 80 × (1 − (Pt − Pmin) ÷ Pmin), where Pt is your price and Pmin the lowest acceptable price.
So the lowest acceptable price scores 80, a price 10% higher scores 72, and a price 25% higher scores 60. The points for specific goals are added and the total is rounded to two decimals. Price dominates, and the field is wide: on the bid registers Awardee has read, the highest bid is typically 3.2 times the lowest.
Calculator
Your price is 12.0% above the lowest: that costs 9.60 price points.
Specific goals
Before 2023, the remaining points went by B-BBEE status level. The 2022 regulations replaced that with specific goals: each buyer chooses its own goals, states the points for each in the tender, and says what proof it needs. Claim them on the preference points form (SBD 6.1 for national and provincial buyers, MBD 6.1 for municipalities) and attach the proof, or you score zero for them.
Questions
What is the 80/20 preference point system?
For tenders up to R50 million (including taxes), price earns up to 80 points and specific goals earn up to 20. Above R50 million the split is 90/10. These are the Preferential Procurement Regulations, 2022, in force since 16 January 2023.
How are price points calculated?
Points for price = 80 × (1 − (your price − lowest acceptable price) ÷ lowest acceptable price). The lowest acceptable price scores the full 80; a price 10% above it scores 72. Under 90/10, replace 80 with 90.
What are specific goals?
The 2022 regulations replaced fixed B-BBEE level points with specific goals that each buyer names in its tender documents, with the points for each goal and the proof required. Many buyers still use B-BBEE status among their goals.
Does the highest score always win?
The contract must be awarded to the tenderer with the highest points, unless objective criteria justify another award (section 2(1)(f) of the Preferential Procurement Policy Framework Act). Ties are broken by the regulations.
Sources
- Preferential Procurement Regulations, 2022 (regulations 3 to 7 and 11), Government Gazette 47452, 4 November 2022
- Preferential Procurement Policy Framework Act 5 of 2000, section 2(1)(f)
- National Treasury standard bidding forms: SBD 6.1 and MBD 6.1 in terms of PPR 2022
- Awardee bid results: on a typical tender the highest bid is 3.2 times the lowest, October 2026
Awardee is an independent service, not a government website. This guide explains the rules in plain language; the gazetted text and the tender documents are what bind you.