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.
Cleaning brush 420mm x 5mm (instruments) 2018-10-30 11:00 PSH 859/ 1819
Pretoria: Service, Repairs and Maintenance of Air Conditioners at SANDF Blenny building for period of 24 months 2018-11-20 11:00 PT18/ 037
Pretoria: Service, Repairs and Maintenance of Air Conditioners at Thaba Tshwane 1 Military Hospital for period of 24 months 2018-11-20 11:00 PT18/ 036
Pretoria: SAPS: Repairs and maintenance of roof and stabilizing of foundation for Salvokop Radio Tech Unit Official Quarters 2018-11-20 11:00 PT18/ 034
Midlands Region: Department of Public Works: Regional Office Extension of the Existing Parking Area Contract Period : Six (06) Calendar Months. 2018-11-19 11:00 ZNTL 03930 W
NDPW: Repairs and replacement of all types of roofs, waterproofing, roof tiling, building works, facia, barge, ceilings and bird proofing for all Clients within the jurisdiction of the JHB Regional Office for a period of 24 months. 2018-11-13 11:00 JHB.18/ 18
Biliblanket pads for neonates and premature babies. 2018-10-30 11:00 PSH 877/ 1819
KIMBERLEY AREA B: Service, repair and maintain all kitchen equipment for 24 months. 2018-11-09 11:00 KIM- 0718- 107087
Request for proposals for training and workshops on sexual reproductive health education in the John Taolo Gaetsewe District for a period of 36 months for Northern Cape Department of Education. 2018-11-09 11:00 NC/ DE/ 005/ 2018- 2019
Southern Corridor Phase 1 - Ithemba West Housing Project 2018-11-26 11:00 Western Cape: Department of Human Settlements: Supply Chain Management
Request for proposals to appoint a service provider to render psychosocial support to identified learners in the John Taolo Gaetsewe District for a period of 36 months for Northern Cape Department of Education. 2018-11-09 11:00 NC/ DE/ 004/ 2018- 2019
Southern Corridor Phase 1 - Ithemba East Housing Project 2018-11-26 11:00 HSC 06/ 2018/ 2019
Conduct women Councillors gender mainstreaming training programme 2018-11-09 11:00 COGTA 4/ 2/ 2- 2018/ RFP/ 04
Construction Of Infrastructure For Cement Crusher Plant (OSHO) and Kenako Concrete Batching Plant In Zone 5 Of The SEZ Retender 2018-11-12 12:00 CDC/ 496/ 18
Request for Proposal - Expression of Interest - provision of an E-Sourcing solution. 2018-10-31 17:00 ESD0001
The South African Social Security Agency hereby invites proposals from independent auditors to perform audit verification on cash paymaster services (Pty ) Ltd ( CPS)’s audited statements of expenses incurred, income received and net profit earned for a period not exceeding Four (4) Months. 2018-11-02 11:00 SASSA: 13/ 18/ IA/ HO
The appointment of a service provider to conduct feasibility study for the Amalgamation of the Department of Arts and Culture (DAC) entities. 2018-11-09 11:00 DAC 13/ 18- 19
The South African Social Security Agency hereby invites proposals from potential service providers to provide the CONTENT LIFECYCLE MANAGEMENT SUITE 16 ( LIVELINK) Support and Maintenance for a period of three (3) years 2018-11-09 11:00 SASSA: 14/ 18/ ICT/ HO
Food mincer. Quantity: 1 unit 2018-10-30 11:00 PSH 959/ 1819
Request to Appoint a Panel of External Compliance Risk Management Service Providers for a period of three (03) years 2018-11-09 11:00 RFA 1824/ 2018:

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Advantages and disadvantages of Consortiums

Consortiums are often considered as entities to use when responding to tenders in South Africa. The question that arises is whether to use a Consortium or a Joint Venture when responding to a tender. To help you with this we have compiled a list of advantages and disadvantages for both Consortiums as well as Joint Ventures. In this article we list the advantages and disadvantages of Consortiums. Look out for the same article on Joint Ventures.

Consortiums Advantages:

  • Easy to establish as there are no formal procedures... Read More
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