Issue Date: 
Tuesday, August 7, 2018

Local content calculation in tenders

The National Government has introduced "designated sectors" which are sectors, sub-sectors or industries that have been designated by the Department of Trade and Industry in line with national development and industrial policies for local production, where only locally produced services, works or goods or locally manufactured goods meet the stipulated minimum threshold for local production and content1.

What is Local Content and how must we apply it in our tender responses?

Local Content is Local Value Added in South Africa by South African recourses. Where a tender response contains a combination of local and imported goods and/or services, the tender price must be separated into its local and imported components as per the Standard Bidding Document 6.2

Where it becomes tricky is Annexure C, D and E that needs to be completed before Standard Bidding Document 6.2 can be completed. Because little of tender responders read the tender document very carefully this requirement is overlooked. This makes it very difficult to complete Standard Bidding Document 6.2.

It is important to know the sequence in which these annexures must be completed. Completing it in the wrong sequence is going to lead to much frustration on the side of the bidder.

Please remember that you as bidder will be contractually required to maintain records to certify imported content, for example, invoice of materials, expenditure records and income statements.

It must be emphasized that when you respond to a tender you must ensure you know which goods and/or services you can claim as Local Content. Be aware that certain tenders will exclude cost such as the following from Local Content:

  • finance charges;
  • property; and
  • deployment fees of the operations contractor.

The designated sectors together with its minimum thresholds can be found at: http://www.thedti.gov.za/industrial_development/ip.jsp.

There is an increase in the drive from National as well as Provincial Government to promote Local Content. This drive is not a South African initiative but a world wide trend. In a South African context it is good because it stimulates internal growth of the economy.

Local Content is a difficult item in any tender. Many bidders don't know whether or not it is applicable to them. We understand the Local Content criteria and documents.

If you want to know more about Local Content contact us to find out when our next Local Content workshop is taking place in your area.
werner@how2tender.com

This article was written by Werner van Rooyen, Director of HowToTender which specializes in tender consulting and tender training. (04/05/2018)

1.  Definition of "designated Sectors" as per SBD document 6.2.

Title Closing Date Tender No.
Occupational health and safety services for resurfacing of municipal roads (Rawsonville, Worcester, De Doorns, Touwsrivier). 2019-04-30 11:00 296861
Terms of Reference for Consultancy Services to Undertake Gender Mainstreaming Study in the Energy Sector in Africa 2019-05-07 15:00 AUC/IED/C/014
Construction of Speed-Humps 2019-05-03 12:00 SCM/2019/114/ENG
For the supply and delivery of safety boots for delivery to Kimberley, Supply Chain Services Warehouse. 2019-04-30 10:00 WRAC/KBC/29581
Supply and delivery of various PPE material on an “as and when” required basis to Bellville 2019-05-14 10:00 BLE RME 2202/2019
SHEQ Dept - Collection and Disposal of Medical Waste on a month-to-month basis not exceeding 12 months 2019-05-07 12:00 PEHR 007/19-20
Construction of Ward 4 Elityeni Internals Streets 2019-05-17 11:00 TECH/MIG 01/2019/20
Construction of Chintsa East Internal Streets 2019-05-17 11:00 TECH/MIG 02/2019/20
Construction of Icwili Sports Field 2019-05-17 11:00 TECH/MIG 03/2019/20
Construction of Ward 6 Youth Centre 2019-05-17 11:00 TECH/MIG 04/2019/20
Provision of Website Management services at KHTVETC for a period of 36 months ( 3 years) 2019-05-23 11:00 KHC Bid 01/2019
Provision of the Secondment of the Water Sector Manager 2019-04-25 11:00 EWSETA/RFQ/11/2019
Appointment of a service provider for the design and construction of houses with basic services infrastructure for evicted farm dwellers from Vaalpoort Farm in Pixley Ka Seme Local Municipality 2019-05-15 11:00 CONMP 0001 (2019/ 2020)
Procurement of Support and Maintenance of VMware Enterprise Licences, the reconfiguration of Enterprise Licenses at Head Office and the Procurement of 12 Additional Enterprise Licences wit x1 VMware vCentre standard including installation and configuration for 36 months 2019-05-10 11:00 RFB 1918- 2018
Request for proposals from reputable and suitably qualified research houses to submit proposals to conduct a Domestic and Departure Tourism Survey for the South African Tourism. 2019-05-10 12:00 SAT 148/ 19
Request for proposal for the appointment of a service provider to render employee wellness programme for the Office of the Public Service Commission (OPSC) for a period of thirty six (36) months. 2019-05-14 11:00 OPSC 001/ 19
The provision of professional catering services for the National School of Government for a period of three (3) years. 2019-05-10 11:00 NSG/ BID/ 12/ 2018/ 19
The comprehensive management and maintenance services of CCTV survailance, access control and intruder alarm systems at the national school of government for a period of 36 months (three years). 2019-05-10 11:00 NSG/ BID/ 13/ 2018/ 19
Supply and delivery of fine aggregate, coarse aggregate, crusher run and rip rap to the Department of Water and Sanitation, Clanwilliam Dam. 2019-06-06 11:00 DWS03- 0419 WTE
Appointment of a Consultant for the Development of 5- Year Business Plan (2019 - 2023) for Sci-Bono Discovery Centre (Sci-Bono) Operations. 2019-05-02 12:00 SCM/CEO/R19-20/11

Pages

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By Werner van Rooyen

www.howtotender.co.za

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South Africa is currently rated 88nd when it comes to the ease of doing business according to survey that is done yearly by The World Bank. This is all good and well if you are an overseas investor with a lot of money and looking for new places to invest in. However, if you are a South African with little or no money, doing and / or starting a business in South Africa can be a daunting task!

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