Republic of Botswana
SHEDULE
SCHEME 2: DIRECT
PREFERENCE
PREFERENCING SCHEDULE
(Procurement)
1 DEFINITIONS
The following definitions shall apply to this schedule:
Citizen Contractor: a natural person or an incorporated company wholly Owned and Controlled by
persons who are citizens of Botswana.
Commercially Useful Function: The performance of real and actual work, or the provision of
services, in the discharge of any contractual obligation, which shall include but not be limited to the
performance of a distinct element of work which the business has the skill and expertise to undertake,
and the responsibility for management and supervision.
Control: the possession and exercise of legal authority and power to manage the assets, goodwill and
daily operations of a business and the active and continuous exercise of managerial and financial
authority and power in determining the policies and directing the operations of the business.
Joint Venture: an association or consortium of enterprises for which purpose they combine their
expertise, property, capital, efforts, resources, skill and knowledge in order to execute the contract.
Local Contractor: a contractor whose Operation is based in Botswana irrespective of the contractor’s
nationality or domicile.
Net Amount: the financial value of the Contract at the time of the award of the Contract, exclusive of
any valued added or sales tax which the law requires the Employer to pay to the Contractor.
Operation: the conducting of formal business activities from a permanent physical presence from
identifiable premises and facilities.
Owned: Having all the customary incidents of ownership, including the right of disposition, and
sharing in all the risks and profits commensurate with the degree of ownership interest or shareholding
as demonstrated by an examination of the substance as well as the form of ownership arrangements.
Targeted Enterprise: a Citizen Contractor.
2 CONDITIONS ASSOCIATED WITH THE GRANTING OF PREFERENCES
Category I preference:
Joint ventures between citizen contractors
The tenderer, who being a joint venture between Citizen Contractors undertakes to:
1) provide a copy of its joint venture agreement;
2) not subcontract more than 25% of the Net Amount of the Contract to non-citizen Contractors;
3) remain a joint venture owned exclusively by Citizen Contractors for the duration of the Contract;
4) accept the sanctions set out in Section 3 below should such conditions be breached;
5) complete the Tender Preference Claim Form contained in Section 4 below; and
6) obtain certification of Citizen Contractor status using the form contained in Section 5.
Category II Preference:
Citizen contractor
The Tenderer, being a Citizen Contractor, undertakes to:
1) remain a Citizen Contractor for the duration of the Contract;
2) not to subcontract more than 25% of the Net Amount to non-Citizen Contractors;
3) accept the sanctions set out in Section 3 below should such conditions be breached;
4) complete the Tender Preference Claim Form contained in Section 4 below; and
5) obtain certification of Citizen Contractor status using the form contained in Section 5.
Category III Preference:
Joint ventures between non-citizen and citizen contractors
The Tenderer, undertakes to:
1) enter into a joint venture with one or more Citizen Contractors (Targeted Partners) at prime contract
level in accordance with the provisions of the standardised resource specification SANS 1914-1: The
Engagement of Targeted Enterprises, as amended hereunder;
2) deliver to the Procuring Department, within 5 working days of being requested in writing to do so, a
completed Joint Venture Disclosure Form (Annex D of SANS 1914-1);
Ref No. _____
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S2a Preference Schedule (procurement)
3)
4)
7)
5)
accept the sanctions set out in Section 3 below should such conditions be breached;
complete the Tender Preference Claim Form contained in Section 4 below;
obtain certification of Citizen Contractor status using the form contained in Section 5; and
complete the following:
CONTRACT PARTICIPATION GOAL CALCULATION
1.
TENDER PARAMETERS
Sum tendered exclusive of any value added or sales tax
which the law requires to be paid
................................
Less all Allowances
...............................
Net Amount
NOTE :
2.
............................

The Contract Participation Goal is based on the Net Amount.
SUMMARY IMPLEMENTATION PROPOSAL
Complete the following:
Name of Targeted Partner#
Participation Parameter
Percentage
Participation to be
claimed towards CPG
(1)
(2) = (1) x 100
%
%
%
%
Total towards CPG
NOTE :
%
The Participation Parameter shall be equal to the lesser of:
c) the financial value of the Contract for which the Targeted Partner is responsible; or
d) twice the financial value of the Contract which the Targeted Partner executes using his own resources or
resources hired by him independently of his non-Targeted Partners;
expressed as a fraction of the Net Amount.
Amendments to SANS 1914-1: The Engagement of Targeted Enterprises for Category III preferences
Delete sub clause 3.2.1 and replace with:
The Contractor shall only satisfy his Contract Participation Goal requirement by entering into an acceptable
Joint Venture Agreement with one or more Targeted Partners at Prime Contract level as set out in 3.2.3
below.
Ref No. _____
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S2a Preference Schedule (procurement)
Delete sub clause 3.3.1 and replace with:
Credits towards the Contract Participation Goal shall be granted by converting the total monetary value of
the contributions made by Joint Venture Partners multiplied by the associated Participation Parameter in
respect of each Targeted Partner, subject to compliance with the requirements of 3.2.3 , exclusive of any
sales tax which the law requires to be paid, to a percentage of the Net Amount.
Category IV Preference:
contractors
Association arrangements between citizen contractors and foreign
The Tenderer undertakes to:
1) enter into a joint venture with one or more Citizen Contractors (Targeted Partners) at prime contract
level and / or subcontract portions of the contract to Citizen Contractors (Targeted Enterprises) in
accordance with the provisions of the standardised resource specification SANS 1914-1: The
Engagement of Targeted Enterprises, as amended hereunder;
2) deliver to the Procuring Department, within 5 working days of being requested in writing to do so, a
completed Joint Venture Disclosure Form (Annex D of SANS 1914-1);
3) accept the sanctions set out in Section 3 below should such conditions be breached;
4) complete the Tender Preference Claim Form contained in Section 4 below;
5) obtain certification of Citizen Contractor status using the form contained in Section 5 in respect of
Targeted Partners; and
6) complete the following:
CONTRACT PARTICIPATION GOAL CALCULATION
1.
TENDER PARAMETERS
Sum tendered exclusive of any value added or sales tax
which the law requires to be paid
................................
Less all Allowances
...............................
Net Amount
NOTE :
2.
............................

The Contract Participation Goal is based on the Net Amount.
SUMMARY IMPLEMENTATION PROPOSAL
Complete the following:
Method 1: by entering into subcontracts with Citizen Contractors
Category of
contract with
Targeted
Enterprises
Estimated Value of Contracts
to be awarded to Targeted
Enterprises (excluding value
added or sales tax)
(1)
Multiplier
Total
(2)
(1) x (2)
Subcontractors
Suppliers
Manufacturers
Service providers
x 1,0
x 0,5
x 1,0
x 1,0

Total towards CPG
Total towards CPG
Ref No. _____
100 x
/
Page 3 of 6
....................... %
S2a Preference Schedule (procurement)
Method 2: by entering into joint venture with Citizen Contractors
Name of Targeted Partner#
Participation Parameter
Percentage
Participation to be
claimed towards CPG
(1)
(2) = (1) x 100
%
%
%
%
Total towards CPG
NOTE :
%
The Participation Parameter shall be equal to the lesser of:
a) the financial value of the Contract for which the Targeted Partner is responsible; or
b) twice the financial value of the Contract which the Targeted Partner executes using his own resources or
resources hired by him independently of his non-Targeted Partners;
expressed as a fraction of the Net Amount.
TOTAL PROPOSED CONTRACT PARTICIPATION GOAL
Total for
Method #1
Method #2
..................................
..................................
Amendments to SANS 1914-1: The Engagement of Targeted Enterprises for Category IV preferences
Targeted Enterprise Declaration Affidavit means a certificate of entitlement from a competent authority.
Delete sub clause 3.2.1 and replace with:
A Contractor may achieve his Contract Participation Goal obligations as follows :
a)
b)
c)
by entering into an acceptable Joint Venture agreement with one or more Targeted Partners at Prime
Contract level as set out in 3.2.3.below;
by engaging one or more Targeted Enterprises to perform Commercially Useful Functions in the
fulfillment of the Contract;
by a combination of the foregoing.
Delete sub clause 3.3.1 and replace with:
Credits towards Contract Participation Goals shall be granted, by converting the value of the following,
exclusive of any value added or sales tax which the law requires to be paid, to a percentage of the Net
Amount:
a)
b)
the total monetary value of the contributions made by Targeted Enterprisesin meeting contractual
obligations under the Contract subject to such enterprises not sub-contracting more than 15% of the
value of their contribution to non-Targeted Enterprises; and
the total monetary value of the contributions made by Joint Ventures multiplied by the associated
Participation Parameter in respect of each Targeted Partner, subject to compliance with the
requirements of 3.2.3.
Ref No. _____
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S2a Preference Schedule (procurement)
3 SANCTIONS RELATING TO BREACHES OF PREFERENCING CATEGORY CONDITIONS
For Categories I and II preferences:
Termination of the Contract or a financial penalty equal to 5 % percent of the Net Amount, payable to the
Procuring Department.
For Category III and IV preferences:
In the event that the Tenderer fails to substantiate that any failure to achieve the Contract Participation Goal
relating to the granting of a preference was due to quantitative under runs, the elimination of items, or any
other reason beyond the Contractor’s control which may be acceptable to the Procuring Department, it shall
be liable to pay to the Procuring Department a financial penalty calculated in the following manner:
P
=
0.15 x (D – Do) x NA
(100)
where D
=
tendered Contract Participation Goal percentage.
Do
NA
P
=
=
=
the Contract Participation Goal which the Employer’s representative based on the
credits passed, certifies as being achieved upon completion of the Contract.
Net Amount
Pula value of penalty payable
4 TENDER PREFERENCE CLAIM IN RESPECT OF ENTERPRISE STATUS OR STRUCTURE
OF THE TENDERING ENTITY
I/we apply on behalf of my/our firm for the following preference:
(Tick one box only and complete the spaces if relevant)

Category I preference (Joint Ventures between Citizen Contractors)

Category II preference (Citizen Contractor)

Category III preference (Joint Ventures between non-Citizen and Citizen Contractors

Category IV preference ( Association arrangements between Citizen contractors and
foreign contractors)
Complete the following if a category III or IV preference is claimed:
I / we hereby tender a Contract Participation Goal of ……….%.
The undersigned, who warrants that he / she is duly authorised to do so on behalf of the firm
confirms that he / she understands the conditions under which such preferences are granted and
confirms that the tenderer satisfies the conditions pertaining to the granting of tender preferences.
Signature : ...............................................................................................................................……….
Name : .......................................................................................................................................………
Duly authorised to sign on behalf of : ............................................................................................………
Telephone : ......................................................................
Fax : ................................................................................
Date : ...............................................................................
Ref No. _____
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S2a Preference Schedule (procurement)
5. CERTIFICATION BY COMPETENT AUTHORITY
To be completed by all Competent Authority for every citizen contractor whenever a Category I, II or III preference is claimed.
We hereby confirm that …………………………………………….(name of applicant) currently satisfies the
requirements for a Citizen Contractor.
Signed
Date
Name
Position
Authority
We hereby confirm that …………………………………………….(name of applicant) currently satisfies the
requirements for a Citizen Contractor.
Signed
Date
Name
Position
Authority
We hereby confirm that …………………………………………….(name of applicant) currently satisfies the
requirements for a Citizen Contractor.
Signed
Date
Name
Position
Authority
We hereby confirm that …………………………………………….(name of applicant) currently satisfies the
requirements for a Citizen Contractor.
Signed
Date
Name
Position
Authority
We hereby confirm that …………………………………………….(name of applicant) currently satisfies the
requirements for a Citizen Contractor.
Signed
Date
Name
Position
Authority
Ref No. _____
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S2a Preference Schedule (procurement)