Issue Date: 
Thursday, October 31, 2019

Local Content calculation in tenders

By Werner van Rooyen, Director of HowToTender (Pty) Ltd which specializes in tender consulting and tender training.

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 exceedingly 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 do not know whether it is applicable to them. 

How to Tender presents a “Specialised Local Content workshop” that teaches the bidder how to complete the Local Content Documents (SBD 6.2 and Annexures C, D & E) correctly. You can book and pay online at  https://howtotender.co.za/local-content-specialist/ 

To learn more about many other tender conditions attend our “Become a Tender Expert” 2-Day workshops presented in Johannesburg, Pretoria, Durban, Port Elizabeth, and Cape Town.  Book and pay online at https://howtotender.co.za/tender-expert-form/

Contact us at wernervr@howtotender.co.za should you require more information.

You can also purchase a Tender Manual (Handbook) on our website https://howtotender.co.za/ which is a step by step guide how to respond to a South African Tender.  It includes examples of completed SBD forms.

1.  Definition of “designated Sectors” as per SBD document 6.2.

Title Closing Date Tender No.
Provision of Banking Services for a period of 5 years 2020-05-15 12:00 SCM/11/2019-20
Supply: Electrical Equipment & Components - Elec-equipment 2020-04-28 12:00 GH12002060
Disposal Of Various Equipment/Scrap 2020-04-30 10:00 WTB002288
Supply and delivery of Fan Impeller and Fan Electric 2020-04-24 11:00 6000235154
Provision of Diving Personnel Services For PetroSA 2020-05-15 12:00 CTT23927
Request for Quotation (RFQ) for the supply of Management and Storage Servers to the CSIR 2020-05-05 16:30 9224/05/05/2020
Land Port of Entry :Golela and Onverwacht: Appointment of a Service Provider/S for The Maintenance and Repairs of Building, Civil, Mechanical, Electrical Infrastructure and Installations for a period of 36 months 2020-05-15 11:00 H19/036 AI
Land Ports Of Entry: Monantsa Pass and Peka Bridge: Appointment of a Service Provider: Maintenance, Servicing and Repair of Buildings, Mechanical and Electrical Infrastructure and Installation at the Ports of Entry for a Period of: 36 Months 2020-05-20 11:00 H19/035 AI
Legal Services Panel 2020-05-11 11:00 IEC/LS-01/2020
Road Distribution and Warehousing Services 2020-05-15 11:00 IEC/LG-01/2020
The South African Social Security Agency hereby invites proposals from potential service providers to bid for the accreditation of service providers to render branding services for SASSA Mpumalanga Region for a period of 36 months (3) Years. 2020-04-24 11:00 SASSA: 47- 19- COM- MP
Request for Information for Co-operatives manufacturing Toilet Paper in Gauteng 2020-04-10 11:00 GT/ GDSD/ 020/ 2020
Request for Information for Co-operatives manufacturing Packaging 2020-04-10 11:00 GT/ GDSD/ 021/ 2020
The Department of Agriculture seeks a service provider for the conducting and roll out of the implementation of the Recognition of Prior Learning (RPL) project 2020-04-23 11:00 BID 869 - 2019/ 2020
Appointment of a Service Provider to Conduct International Benchmarking of the South African NSC With CIE, IB, Kenya, Ghana and Zimbabwe 2020-04-24 12:00 UMALUSI (19- 20) T0014
Appointment of a panel of Trainers to train researchers and M&E experts for the period ending 31st March 2023 2020-05-11 11:00 RFP/ SASSETA/ 201920112/ 1/ 2
Appointment of an experienced Photography and Videography Service Provider from date of appointment until 31st March 2023 2020-05-11 11:00 RFP/ SASSETA/ 201920131
Terms Of Reference for Procurement Of Office Furniture for the ETDP Seta Head Office 2020-05-08 11:00 SCMU: 15 - 2019/ 20
RFP 01-2019: Provision of a Production Management and Track and Trace Solution for cigarettes 2020-04-30 11:00 RFP 01- 2019
Supply and Delivery of Coal Peas for National Health Laboratory Service 2020-04-30 11:00 RFB 135/ 19/ 20

Pages

Free Keyword search

Search all tender notices for FREE!

No subscription or registration required!

You can also search by the reference of the the tender.

Advanced search

Search by Issuer, Region or Sector, individually, or using any combination of the three.