What 'Value for Money' Means Under South Africa's New Procurement Rules

For two decades, winning a South African government tender has largely meant one thing: scoring well on the Preferential Procurement Policy Framework Act's 80/20 or 90/10 points system, where price carried the dominant weight and B-BBEE status filled the rest. The Public Procurement Act 28 of 2024 repeals the PPPFA and replaces that scoring language with a broader principle: value for money. This article looks at what that phrase is actually meant to capture, and what it changes for how you build a bid.

From Points to Principle

The PPPFA system was mechanical: a fixed formula converted price and preference points into a single comparable score, and the lowest responsive, functionally qualifying price generally won the largest share of that score. Value for money, as framed in the Public Procurement Act, is deliberately less formulaic. It positions price as one input into a broader assessment of whether public money is being spent well, alongside functionality, quality, and the procurement's contribution to policy objectives such as transformation and local economic development.

This is a meaningful shift in emphasis rather than a cosmetic rename. A pure points formula is easy to audit mechanically but can reward the cheapest compliant bid even when it delivers poor long-term value. A value-for-money standard asks evaluators to weigh outcomes, not just arithmetic — which also means it places more responsibility on bid documents to make the case for value explicitly, rather than relying on price alone to do the work.

What Value for Money Actually Weighs

Based on the Act's stated purpose and the draft regulations published for comment, value for money in this framework is not a single number but a composite judgment drawing on:

• Price — still central, but not the sole determinant of the outcome.
• Functionality and technical merit — whether the bidder can actually deliver to the required standard.
• Preferential procurement objectives — now expressed through the set-aside, pre-qualification, and subcontracting mechanism described in the draft regulations, rather than a preference-points formula.
• Fair treatment of suppliers — a stated principle alongside value for money, intended to guard against value-for-money reasoning being used to justify arbitrary exclusions.

How This Differs from the Old 80/20 and 90/10 System

If you have used our explainer on the 80/20 preference point system to plan bids under the current framework, the practical comparison is useful for understanding what changes and what doesn't.

What It Means for How You Write Your Bid

Under a pure points formula, a technically thin but cheap bid could still win on arithmetic. Under a value-for-money standard, bid documents need to do more explicit work to demonstrate why a price represents good value — not just that it is low. Practically, that means:

1. Make functionality claims concrete: named personnel, delivery timelines, and prior project evidence carry more weight than generic capability statements.
2. Don't assume price alone wins. Be ready to justify a higher price with quality, risk reduction, or delivery certainty if your bid isn't the cheapest.
3. Understand which set-aside or pre-qualification band your contract falls into, since that determines which preferential mechanism applies to the evaluation, not a preference-points calculation.
4. Keep evidence of past performance current and quantified — value-for-money assessments lean on demonstrable track record more than a formulaic score does.

Why National Treasury Moved Away from a Pure Points Formula

The PPPFA points system was introduced to make preferential procurement objective and auditable: two evaluators applying the same formula to the same bids would reach the same score. That objectivity came at a cost. Because price so heavily dominated the 80/20 or 90/10 split, procuring institutions sometimes found themselves contractually bound to award to the lowest-priced compliant bidder even where evaluators had genuine, well-founded concerns about delivery risk, quality, or long-term value that the formula simply had no mechanism to weigh. National Treasury's own review work leading up to the Public Procurement Act identified this as a structural weakness — a system that was easy to defend in an audit but not always effective at securing good outcomes for the state.

Value for money is Treasury's attempt to correct that weakness without abandoning objectivity altogether. The Act pairs the value-for-money principle with parallel obligations around transparency, fair treatment, and competitiveness, meaning evaluators are expected to document and justify how they weighed price against other factors, not simply substitute personal preference for a formula. In effect, the accountability that used to live inside a fixed calculation now has to live inside a documented evaluation record.

What This Means for Different Types of Bidders

The practical impact of the shift will not be identical for every kind of supplier. A few patterns are worth understanding as the new framework beds in.

• Established suppliers with a strong delivery record stand to benefit from a system that can weigh track record more heavily than a pure price comparison, provided they document that track record clearly in every bid rather than assuming evaluators already know their history.
• New entrants and SMMEs will need to work harder to substantiate quality and capability claims with concrete evidence, since they cannot yet lean on an established track record the way an incumbent can — but the set-aside and pre-qualification mechanisms replacing PPPFA preference points are specifically designed to keep the door open for these suppliers.
• Bidders used to winning on price alone will need to adjust their bid-writing approach, since a value-for-money evaluation gives evaluators more room to prefer a higher-priced bid that makes a stronger case on delivery risk or quality.
• Consortiums and joint ventures may find value-for-money evaluation more forgiving of a JV's combined strengths — technical capacity from one partner, transformation credentials from another — provided the bid explains clearly how each partner contributes to the overall value proposition.

How to Prepare While the Framework Is Still Settling

Because the transition between PPPFA and the Public Procurement Act will not happen instantly across every organ of state, bidders are likely to encounter both systems in parallel for some time. The safest approach is to check the specific evaluation methodology stated in each tender document rather than assuming which framework applies based on the publication date alone. Keep a standing library of quantified past-performance evidence — completion certificates, client references, defect-free handover records — since this evidence becomes more valuable, not less, under a value-for-money standard. And treat every bid as an opportunity to make an explicit, written case for why your price represents good value, rather than leaving evaluators to infer that case from the number alone.

Open Questions Still in the Draft Regulations

Because the General Public Procurement Regulations 2026 are still in draft form and open for comment until 15 July 2026, the precise weighting methodology procuring institutions will use to operationalise value for money is not yet finalised. Bidders should treat any specific percentage weightings referenced in commentary before the regulations are finalised as provisional, and revisit this once Treasury publishes the final regulations and commencement dates.

Sources: Public Procurement Act 28 of 2024, National Treasury draft General Public Procurement Regulations 2026, Werksmans Attorneys commentary on the shift in evaluation criteria in South African public procurement.