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.
The Nelson Mandela Museum (NMM) invites suitably qualified, professional, experienced and competent service providers to render company secretarial services to the council of the NMM and subcommittees for a period of twelve months. 2020-08-24 12:00 RFP- NMM- 2020- 01
Establishment of a government technical advisory centre (GTAC) panel of professional service providers for a period of three (3) years – Batch 3 2020-08-28 11:00 GTAC 003- 2020- 21
Appointment of a service provider to offer training on life skills to graduates for a period of 36 months. (3 years) 2020-08-28 11:00 NRF/ SAASTA HRES/ 01/ 2020- 2021
Consultancy service for the evaluation of the African Union plan of action on drug control and crime prevention (2013-2019) and preparation of continental report on implementation progress in 2019 and 2020 2020-08-28 15:00 No reference number
Appointment of a service provider to offer training on entrepreneurship skills to graduates for a period of 36 months (3 years) 2020-09-04 11:00 NRF/ SAASTA HRES/ 02/ 2020- 2021
Appointment of an extended panel of corporate governance service providers for the National Lotteries Commission for a period of three (3) years with the following capabilities:- - Strategy facilitation, corporate responsibility and sustainability development - Business modeling, actuarial and shared value - Competition and regulatory economics; and - Research and advisory 2020-08-28 11:00 NLC/ 2020- 06
Appointment of a service provider for the provision of off-side storage management services for the National Lotteries Commission for a period of five (5) years 2020-09-07 11:00 NLC/ 2020- 07
Appointment of Attorneys Firms and Legal Practitioners for the establishment of the National Lotteries Commission’s Panel of Attorneys Firms and Legal Practitioners for a period of Twenty Four (24) Months 2020-09-07 11:00 NLC/ 2020- 05
Appointment of a project management company on a turnkey to purchase an existing building as well as provision of space planning, advisory design and refurbishing services of the property according to MHSC specific office requirements. 2020-08-31 11:00 MHSC005/ 2020- 21
Rendering of Private Security Services to the Department of Water and Sanitation Nationally for a period of 36 Months: Main Account and Water Trading Account 2020-09-14 11:00 W11326
KwaZulu-Natal Department of Transport invite service providers for the Provision of Irregular Expenditure Management Support The KwaZulu- Natal Department of Transport is applying pre-qualifying criteria for this bid in terms of Regulation 4 of the PPPFA Regulations, 2017. 2020-09-08 11:00 ZNB0061/ 19T
Appointment of a service provider to conduct a workforce planning and talent management for 11 Gauteng Municipalities through workshops 2020-08-21 13:00 COGTA RFP 04/ 2020
Appointment of a service provider to review, enhance, develop and implement simplified revenue plan model at Emfuleni, Lesedi, Merafong, Randwest, Mogale City and Midvaal Local Municipalities 2020-09-10 11:00 COGTA 21/ 2020
Appointment of a consortium / multi-disciplinary professional service provider/s for the project: Provision of multi disciplinary professional services: District Six Phase 1, 2, 3a & 3b restitution housing project for the Rural Development Branch of the Department of Agriculture, Land Reform & Rural Development in Cape Town, Western Cape. 2020-09-08 11:00 5/ 2/ 2/ 1- CRDP 0001(2020/ 2021)
Invitation to Tender for an off-grid solar system for the entire Savannah Country Estate HOA. 2020-08-21 15:00 No reference number
Appointment of public higher education to conduct research for the implementation of Bankseta’s research agenda. 2020-09-08 11:00 BS/ 2019/ RFB440
Request for Proposals to appoint a panel of Service Providers to assist with the procurement of Research and Laboratory Consumables for a period of three years. 2020-09-11 11:00 ARC/ 03/ 07/ 2020
Welkom Magistrate Office: Rendering of cleaning services for a period of 24 months 2020-09-01 11:00 BL20/ 010
Kroonstad Magistrate Office: Rendering of cleaning services for a period of 24 months 2020-09-01 11:00 BL20/ 009
Appointment of a service provider to render cleaning and hygiene services for the Department of Agriculture Land Reform and Rural Development : Kimberley Deeds Registry for a period of 24 months. 2020-08-28 11:00 DALRRD (CRD- 02) 2020/ 21

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