Issue Date: 
Tuesday, July 31, 2018

3 Sub-contracting rules to be aware of when responding to tenders

There seems to be a lot of confusion amongst entrepreneurs when it comes to tenders and sub-contracting, due in large part to The Preferential Procurement Regulations, 2017 that has been implemented on the 1st of April 2017. Many entrepreneurs ask us whether they should sub-contract or not, in responding to a tender and how and where do they get onto the sub-contracting lists.

There are 3 sub-contracting rules in the Preferential Procurement Regulations 2017 that Organs of State can/must apply when issuing tenders to the general public.

The first Regulation is Regulation 4 which state inter alia: if an Organ of State decides to apply pre-qualification criteria to advance certain designated groups that Organ of State must ADVERTISE the tender with a specific tendering condition that certain bidders can or may respond.

The second Regulation is Regulation 9 which state inter alia: if it is feasible to sub-contract for a contract above R30 million, an Organ of State must apply sub-contracting to advance designated groups.

The designate groups mentioned in both Regulation 4 and 9 are Black Owned Enterprises with 51% or more black ownership and any of female Black owned, youth black owned, black people with disabilities owned or black military veterans owned enterprises.

The third sub-contracting rule has to do with sub-contracting after the award of the tender. Regulation 12 states inter alia: (3) a person awarded a contract may not subcontract more than 25% of the value of the contract to any other enterprise that does not have an equal or higher B-BBEE status level of contributor than the person concerned, unless the contract is subcontracted to an EME that has the capability and ability to execute the subcontract.

The tender document will dictate how you should or should not sub-contract. Read the tender document carefully; follow the instructions precisely and to the point. Organs of State are applying these Regulations rigorously and failing to comply will lead to your tender response being disqualified.

Tender trends and Regulations are changing frequently. To keep up to date with these changes we recommend attending one of our How-to-Tender workshops that are presented across South Africa. Tender Workshop dates are published on our website at www.how2tender.com or for more information on the How-to-Tender workshops please email us at werner@how2tender.com

This article was written by Werner van Rooyen, Director of HowToTender which specializes in tender consulting and tender training.

Title Closing Date Tender No.
Appointment of a panel of law firms to assist the Council for Geoscience with all its corporate work for a period of three (3) years. 2019-06-14 11:00 CGS- 2019- 006L
Appointment of a Professional Service Provider to Provide Facial Recognition and Queue Management System to the CIDB for a period of 36 months. 2019-06-18 11:00 RFB60058
Re-Advertisement-The Development Of Standards For The Eco Label Scheme At Agrément South Africa: Wool and Wool-Rich Pile Carpets 2019-06-12 16:00 ASA 04/ 2019
Re-Advertisement-The Development of Standards for the Eco Label Scheme at Agrément South Africa: Paints and Coatings 2019-06-12 16:00 ASA 03/ 2019
Provision of Canteen Services 2019-06-14 12:00 MTK 02/ 2019
ZNTD 03855W: WIMS 063751: Kwazulu-Natal: Department of Education: Stanger: Tshutshutshu Secondary School: Water and Sanitation: Phase 3. 2019-06-20 11:00 ZNTD 03855W
Appointment of a Cleaning Company to render cleaning, pest control and hygiene services in Block G which is situated adjacent to the dti campus for a period of 3 years 2019-06-07 11:00 dti 03/ 19- 20
Grahamstown High Court: Provision of Cleaning Services for a Period of twenty four (24) Months 2019-06-11 11:00 PEC02/ 2019
Appointment of a service provider for physical security guarding services in Northern Cape and Free State 2019-06-07 11:00 DH05- 2019
Consulting Engineering Services for Routine Road Maintenance of National Route N10 Section 3 Km 37.62 To Km 81.59 and National Route R61 Section 2 Km 17.25 To Section 3 Km 41.48 and National Route R390 Section 1 Km 0.00 to Section 2 Km 23.56. 2019-06-07 14:00 NRA X.003- 040- 2019/ 1F
Consulting Engineering Services for the Routine Road Maintenance of National Routes R56 Section 1 (Km 58.78) to Section 2 (Km 30.81) and National Routes R58 Section 1 (36.96) to Section 3 (Km 55.73) and National Route R391 Section 2 (Km 0.0) To (Km 37.09) and National Route R390 Section 2 (Km 23.56) To (Km 34.46). 2019-06-07 14:00 NRA X.003- 044- 2019/ 1F
ZNTD 03952W: WIMS 064144: Kwazulu-Natal: Department of Education: Umbumbulu: Umthente High School: Water and Sanitation: Phase 3 2019-06-21 11:00 ZNTD 03952W
Consulting Engineering Services for the Routine Road Maintenance of National Routes R56 Section 1 (Km 58.78) to Section 2 (Km 30.81) and National Routes R58 Section 1 (36.96) to Section 3 (Km 55.73) and National Route R391 Section 2 (Km 0.0) To (Km 37.09) and National Route R390 Section 2 (Km 23.56) To (Km 34.46). 2019-06-07 14:00 NRA X.003- 044- 2019/ 1F
The Routine Road Maintenance of National Route N6 Section 4 Km 65.38 to Section 5 Km 57.07 and National Route R58 Section 4 Km 0 to Section 6 Km 43.06 and National Route R56 Section 4 Km 0 to Km 21.09 and National Route R56 Section 3 Km 27.37 to Km 35.04 2019-06-07 14:00 NRA X.003- 045- 2019/ 1F
ZNTD 03863W: WIMS 063908: Kwazulu-Natal: Department of Education: Maphumulo: Umvozane Primary School: Water and Sanitation: Phase 3 2019-06-20 11:00 ZNTD 03863W
Consulting Engineering Services for the Routine Road Maintenance of National Route R56 Section 4 Km 20.09 to Section 7 Km 25.71, National Route R58 Section 6 Km 40.06 to Section 7 Km 4.05 and National Route R410 Section 1 Km 0.00 To Section 3 Km 16.85 2019-06-07 14:00 NRA X.003- 042- 2019/ 1F
Consulting Engineering Services for the Routine Road Maintenance of National Route R56 Section 7 Km 25.713 to Section 8 Km 168.71 and National Route R396 Section 6 Km 0 to Km 39.31 2019-06-07 14:00 NRA X.003- 043- 2019/ 1F
Gravelling of Provincial Road P215 in the Amajuba District 2019-06-19 11:00 C253/ 1920/ BR/ 813
ZNTD 03969W: WIMS 064117: Kwazulu-Natal: Department of Education: Inchanga: Ukusakwabasha Primary School: Water and Sanitation: Phase 3. 2019-06-21 11:00 ZNTD 03969W
Betterment and Re-gravelling of Local Road L2416 in the Amajuba District 2019-06-12 11:00 C253/ 1920/ BR/ 805

Pages

Extension of validity period

By Werner van Rooyen

www.howtotender.co.za

31 January 2019

Those of you who are familiar with responding to tenders will know that it is common practice for procuring entities to extend the bid price validity period. We received the undermentioned queries regarding the extension of the validity period of the bid price.

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