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.
Provision of a manufacturing facility in zone 1A of The Elidz. 2018-08-21 12:00 EB/ASP2/03/18/Z1A
Construction of Izixhotyeni Access Road. 2018-08-21 12:00 MNQ/SCM/04/18-19
Construction of Dyam-Dyam Access Road. 2018-08-21 12:00 MNQ/SCM/05/18-19
Construction of Lower Toboshane Access Road. 2018-08-21 12:00 MNQ/SCM/06/18-19
Supply and delivery of various valves on an as and when required basis for a period of five (5) years. 2018-08-22 14:00 MAT00312
Design, Manufacture, FAT, Delivery of new 400V AC Unit Boards System and Associated Equipment to Site, Offloading, Rigging, Erection, Installation, Site Testing and Commissioning for Units 1 - 4 at Drakensberg Power Station. 2018-08-23 10:00 E/LH3681
Completion of Libode Social Development Offices – including remedial works. 2018-08-23 11:00 SCMU5-18/19-0016
Provision of professional services in consortium/joint venture or multi-disciplinary practice for SCM offices. 2018-08-23 11:00 SCM/18-100/S
Provision of professional services: Review and development of an automated fare collection system (AFC) tender including contract management for the NMBM Integrated Public Transport System. 2018-08-23 11:00 SCM/18-230/S
Installation of street light furniture and maintenance. 2018-08-23 11:00 SCM/18-207/CSCM/18-207/C
Completion of Monti Ntlozelo (Electrification). 2018-10-05 11:00 MBIZ LM 0004 ENG
Provision of banking services. 2018-09-20 12:00 MBIZ LM 06/03/18/LT/ BTO
Manufacturing and Installation of Bus Shelters and the Construction of Bus Stops and associated civil works. 2018-08-20 12:00 T/ING/024/2018
General Building Maintenance Services at various Central Grid Substations on an as and when required basis for a period of three (3) years. 2018-08-24 10:00 CORP4493
Request for proposals for the appointment of a service provider to render Cleaning Services to the Unemployment Insurance Fund. 2018-08-27 11:00 UIF2/2018
Geotechnical Drilling for Foskor’s north and south Pyroxenite Pits 2018-08-20 11:00 T144/18
Appointment of a service provider to lease commercial office accommodation to SASSETA for a period until 31st March 2020 with an option to re-new 2018-08-24 11:00 RFP/SASSETA/1718006/01
Supply of Fbo (Vebeo) Fitting Kits for Bt 1064 Project Currently Running at Transnet Locomotive Business in Durban for a period of three (3) years "as and when required" 2018-08-21 10:00 TE 18 DBN 6GM 05118
Upgrade to microsoft skype for business 2018-08-21 11:00 FSCA2018/19-T009
Road condition data (Paved and Upaved) including instrumental /Automated Road Survey Data, Traffic Data and Bridge Conditions for Vhembe District 2018-08-21 12:00 RAL/C750E/2018

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