Hi Thabang,
Here is the generally accepted practice:
If the bid is advertised as 80:20 and ALL responses come in above the threshold (ie over R500,000 including VAT and expenses), then strictly according to Section 10(1) of the PPPFA you need to cancel. However, there are good precedents where you can continue with the evaluation process on the 90:10 evaluation basis and need not cancel on two important provisos: 1) you write to all bidders and inform them of the situation and that the evaluation process will continue on the 90:10 system providing there are no objections. If all the bidders agree, then technically you can continue. 2) you keep adequate records on the basis for all such decisions.

Please be sure to confirm that sufficient funds can be made available for the higher cost

However, if some bids come in above and some below, then you need to be cautious:

• Technically you will not be able to award the tender to company that tendered a price above the threshold - - it is not fair that you advertise that the threshold is R500k and then award it to a company that is above R500k.
  In theory, the company that is above the R500k threshold will score lower on price relative to the company below R500k. However, there may be instances where this does not happen.

The second part of the questions concerns the "technical evaluation committee". Please note that there can only be one Evalution Committee. There may be sub-committees but at the end of the evaluation process ONE recommendation is put to the Adjudication Committee. So if the "tech evaluation comittee" recommends only suppliers that are above the R500k threshold, they cannot eliminate the others unless they do not score more that the required minimum function score (which must be published with the RFP). So they must score them all.

You may want to expand on this a little more so we can do a better job at assisting you.

Hope this is of some benefit.
Best regards
ShaunCScott

(PS: These issues come up in many of the 3 Bid Committee courses that we do. The one day course (and the presenter) has been approved by National Treasury)

Hi Thabang
I don't think this is a 100% relevant to your specific situation but something to maybe use in the future.

How about including functionality within your 80 points for price?
Something like "Threshold Compliance" worth 20 - 40 points of the 80.
As someone with a higher price will always score lower on price (specifically) than someone with a lower price but it might get close if the more expensive company has good equity figures.
Including functionality will help to stretch the gap and technically "disqualify" these "non-compliant" suppliers.

The best is still to add to your TOR that failure to comply with the threshold will result in disqualification.

__________________
Izak van der Merwe
INTENDA (PTY) Ltd.
www.intenda.co.za