(1) A procuring institution must, in accordance with the prescribed thresholds and conditions, apply the following prequalification criteria for a bid to promote preferences in the allocation of contracts:
(a) A bidder having a prescribed minimum percentage of preferential procurement from enterprises that are owned and managed by black people in terms of the applicable code of good practice on black economic empowerment issued in terms of section 9(1) of the Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003);
(b) a bidder subcontracting a prescribed minimum percentage to—
(i) a small enterprise which is owned by black people;
(ii) a small enterprise which is owned by black people who are youth;
(iii) a small enterprise which is owned by black people who are women;
(iv) a small enterprise which is owned by black people with disabilities;
(v) a small enterprise which is owned by black people who are military veterans;
(vi) a small enterprise;
(vii) a small enterprise referred to any of the subparagraphs (i) to (vi) within a particular geographical area;
(viii) a co-operative which consists of members who are black people;
(ix) a co-operative;
(x) a co-operative referred to in subparagraph (viii) or (ix) within a particular geographic area.
(2) The prescribed conditions referred to in subsection (1) must include a minimum of potentially qualifying suppliers.
(3)(a) Persons referred to in subsection (1)(b)(i) to (vii) must be owned by the relevant category in accordance with the prescribed percentages.
(b) Persons referred to in subsection (1)(b)(i) to (vii) must be owned by citizens of the Republic in accordance with the prescribed percentages.
(c) Persons referred to in subsection (1)(b)(viii) and (x) must have members of the relevant category and citizens of the Republic in accordance with the prescribed percentages.
(4) When procuring, procuring institutions must identify procurement opportunities, in a particular sector, industry or commodity, supply market, and the availability of small enterprises or co-operatives or both, that may be eligible to bid to support sectors or industries that are not sufficiently transformed where any prequalification criteria referred to in subsection (1) could be applied.
(5) A bidder that fails to meet any prequalification criteria stipulated in the bid documents is an unacceptable bid and must be disqualified.
(6) A procuring institution must, in addition to the measures stipulated in subsections (1) to (6), evaluate the bid, referred to in subsection (1), in terms of the prescribed criteria.
(7) This section applies with the necessary changes and as prescribed to a bid for an income-generating contract.