4 Requirements for Start-ups
In the tender process it is essential that an enterprise has some experience of the supply that it wants to tender on. In fact, the more experience the enterprise have in supply the better its changes of being awarded a tender.
Can a startup enterprise be awarded a tender? The answer to this question is for the Organ of State that has issued the tender, to decide. But, there are definitely some things that a startup can do to ensure that it subscribe to the minimum requirements of a tender.
The minimum requirements that any enterprise must have are:
1. Tax compliance.
2. B-BBEE compliance.
3. Central Supplier Database registered.
4. Bank account.
The reason a start-up enterprise must comply with the four minimum requirements above is that the Organ of State must verify that an enterprise is legit. The Preferential Procurement Policy Framework Act necessitates Organs of State to comply with these minimum requirements.
It is also crucial for an enterprise to have some kind of B-BBEE credentials because the enterprise's B-BBEE score is used to calculate the enterprise's Preferential Points. Without these points it will be difficult for an enterprise to get pass the evaluation stadium of any tender process, not even to mention the adjudication stadium. No points will result in losing the tender. The good news is a Start-up Enterprise automatically qualifies as a Level one, two or four Contributor to B-BBEE. It all depends on your Black ownership.
Tenders are evaluated on Functionality first and then on Price and B-BBEE. Usually the enterprise must score between 65 to 75 points on Functionality to advance to the next phase of evaluation. This is exactly where startup enterprises fail. The entrepreneur does not realize that if you respond to a tender you must have some expertise of the supply you want to deliver. This little point in the tender process is much enterprises downfall.
So how does an enterprise, especially a startup enterprise, overcome this problem? The logical answer would be to join forces with an enterprise that has the necessary expertise and that comply with the Functionality of a specific tender. Finding enterprises that will go into a joint venture can be difficult but if the startup enterprise can bring some special skills to the joint venture it will be easier to find a partner.
If you want to learn more about the tender process and how to complete a tender correctly and hopefully successfully, please visit www.how2tender.com