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.
Paediatric Negative Pressure Chest Drainage Bag Xl200 -With A Collection Chamber Of 400ml & A Compact Hanger. Must Have Accurate Volume Measurement, A Large Diameter Drainage Tap, A Needle Free Sampling Port. 2018-08-28 11:00 ZNQ NO.1861/ 07/ 18
Placement or Outright purchase of an automated scanning and imaging system for Cytogentics and Fish Diagnostic tests 2018-09-11 11:00 RFB 0088/ 17/ 18
Brother Printer Drum Unit. Dr3215 (Original Only) 2018-08-28 11:00 ZNQ NO.2145/ 07/ 18
Provision of panel of auditors nationally to the NHLS for a period of three (3) years. 2018-09-11 11:00 RFB 073/ 18/ 19
Appointment of a service provider to supply and erect trellis system for Coboop Irrigation Project, situated under Khai-Ma Local Municipality in the Namakwa District, Northern Cape Province 2018-09-07 11:00 5/ 2/ 2/ 1 NC RDLR- 0003(2018/ 2019)
Extremity Drape - Size 220cm X 320cm, Spunbond Drape With Laminated Spun Bond Under Leg Area To Ensure Impervious Nature, Integrated Velcro Cable Holders, Loose Non-Slip Pad Included, Sterile, Single Packed, With Expiry & Package Date, Latex Free, Water Proof. 2018-08-28 11:00 ZNQ NO.1845/ 07/ 18
Placement or Outright purchase of Point of Care Troponin Analyser in Kwazulu Natal region for a period of (3) three years 2018-09-10 11:00 RFB 068/ 18/ 19
Sterile Needles for Injection 30g 1/2 “ 0.3 X 13mm 2018-08-28 11:00 ZNQ NO.1814/ 07/ 18
Placement or Outright purchase of Automated Glass Coverslipper for Universitas for a period of (3) three years 2018-09-11 11:00 RFB 072/ 18/ 19
Spring Loaded Biopsy Needle, 14g X 20cm W 2018-08-28 11:00 ZNQ NO.1821/ 07/ 18
Hard, Plastic, Blue Scissor Clamps with Locking Ability for Clamping Lines 2018-08-28 11:00 ZNQ NO.1820/ 07/ 18
The Gauteng Department of Health invites of proposal from qualified medical doctors to perform Voluntary Medical Circumcision (VMMC) service as will be determined by the Department for a period of Three (3) years. 2018-08-31 11:00 GT/ GDH/ 099/ 2018
Supply: 300 units - Cannula manual vacuum aspiration size: 6mm; 250 units - Cannula manual vacuum aspiration size: 7mm; 100 units - Cannula Manual vacuum aspiration size: 8mm; 50 units - Syringe manual and vacuum aspiration double valve autoclavable to 121 degrees celsius 2018-08-29 11:00 356/ 18
Disposable Endoscopic Bite Blocks, 2cm Opening In Diameter & 48 French Depth, with Side Holes for Suctioning, Head Strap Inclusive. 2018-08-28 11:00 ZNQ NO.1819/ 07/ 18
Bid for the supply and delivery of pet bottles used for sugar and salt solution to assist with alleviating diarrhoea. These bottles to be supplied and delivered to various sub-structures and districts under the control of The Department of Health: Western Cape Government for a two year period. 2018-09-14 11:00 WCGHCC033/ 2018
Arterial Line Single Transducer Dtx Plus 2018-08-28 11:00 ZNQ NO.1786/ 07/ 18
Ultra Sound Assisted Liposuction Machine with an Infiltration Pump with a Variety Of Sizes Of Infiltration and Suction Cannulas. 2018-08-28 11:00 ZNQ NO.1659/ 06/ 17
Supply 3000 Units - Nebulizer Oxygen mask for peads 2018-08-29 11:00 ZNQ 318/ 18
Supply: Swabs gauze 100 X 100MM X 8Ply - non-sterile (200 PKTS X 6 months) 2018-08-24 11:00 ZNQ 435/ 18
Locking Pigtail Drain Sets - 8fr 10fr & 12fr - 25cm. 2018-08-28 11:00 ZNQ NO.1542/ 06/ 18

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7 Disadvantages of Competitive Bidding

The bidding process can be very tedious sometimes. Here are some of the disadvantages of the bidding process.

1.    Leading suppliers may not tender

In Australia, for example, government procurement guidelines only allow suppliers who actually tender to be considered for a procurement decision. If the leading supplier or suppliers do not tender, the purchaser can only consider bids from suppliers who do tender. If leading suppliers are not considered, the purchaser may end up buying inferior product or service... Read More

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