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.
Bloemfontein Deeds Office: Maintenance of Fire Protection System 2018-09-11 11:00 BL18/ 039
Ndpw: Security Guarding Services at the Regional Office for 7,9, 10th Floor and D Parking 2018-09-07 11:00 NST18/ 028
Servicing of stand-by generator 2018-08-24 11:00 ZNQ59/ 18/ 19
Appointment of a service provider to provide Information Communication Technology (ICT). 2018-09-17 11:00 FB SETA (17- 18) T0002
Servicing of autoclave machine 2018-08-24 11:00 ZNQ60/ 18/ 19
Witbank Prison Wastewater Treatment Works: 12 Months Operation and Scheduled Maintenance. 2018-09-07 11:00 NST18/ 027
The Financial Intelligence Centre request for proposals from service providers for IT Solution Architecture and Consulting Services for a maximum of thirty six (36) months. 2018-09-07 11:00 FIC/ RFB/ CARA/ 0011/ 2018/ 19
Terms of Reference for the appointment of a service provider for the ETDP SETA’s Business process analysis services. 2018-09-11 11:00 SCMU: 10 - 2018/ 19
Servicing of boiler room 2018-08-24 11:00 ZNQ57/ 18/ 19
Terms of Reference for the appointment of a service provider for a video conferencing solution for the ETDP SETA 2018-09-11 11:00 SCMU: 11 - 2018/ 19
Zonstraal Military Base Oxidation Ponds: 12 Months Operation and Scheduled Maintenance 2018-09-07 11:00 NST18/ 026
N.G Dlukulu clinic, Grahamstown, Makana Local Municipality, Sarah Baartman District: Renovations and Extensions. 2018-09-17 11:00 SCMU3- 18/ 19- 0264- HO
Appointment of experienced and reputable service provider to partner with Tshabo community on snail farming for a period of 24 (twenty-four) months. 2018-09-17 11:00 SCMU 04 - 2018/19:
Middle Terrace and Virginia Shumane Clinics Grahamstown, Makana Local Municipality, Sarah Baartman District: Renovations and Extensions 2018-09-17 11:00 SCMU3- 18/ 19- 0265- HO
Appointment of a Service Provider to Develop and Administer a Consumer Credit Readiness Initiative 2018-09-14 11:00 HS 04/ 2018/ 2019
Dube TradePort invites proposals from suitably qualified, experienced and accredited water testing laboratories to provide water testing services for a period of three (3) years. 2018-09-14 11:00 DTP/ RFP/ 11/ AGZ/ 06/ 2018
False Bay TVET College invites bids for Westlake Site Centre of Specialisation - New Fitting & Turning Training Centre: Repairs & Renovations to Existing Infrastructure 2018-09-07 11:00 FBC T10/ 2018
National Institute for the Humanities and Social Sciences (NIHSS) Invites Suitably Qualified Service Providers to Provide The Insitute with the Office Accomodation 2018-09-24 12:00 NIHSS/ OFFICE- 01/ 2018
Dube TradePort invites proposals from suitably qualified, experienced and independent professional service provider to support the fibre network for a period of three (3) years. 2018-09-14 11:00 DTP/ RFP/ 12/ ICT/ 06/ 2018
DTPC invites proposals from suitably qualified, experienced and independent professional service providers to provide technical services in the acquisition of projects in the Mechanical Engineering and maintenance field for its Bid Specification Committee (BSC) and Bid Evaluation Committee (BEC). 2018-09-14 11:00 DTP/ RFP/ 15/ CEO/ 07/ 2018

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