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.
ZNTD 04776W: WIMS 066099: Kwazulu-Natal: Department of Education: Ndwedwe: Magudwini Junior Primary School: Replacement of doors, windows, chalkboards and painting *Contract Period: Three (03) months. 2019-06-10 11:00 ZNTD 04776W
Kwazulu-Natal: Department of Education: Kwamashu: J. G. Zuma High School: Water and Sanitation: Phase 3. 2019-06-21 11:00 ZNTD 03922W
ZNTD 03864W: WIMS 063948: Kwazulu-Natal: Department of Education: Stanger: Ikhusana Combined School: Water and Sanitation: Phase 3 2019-06-20 11:00 ZNTD 03864W
Kwazulu-Natal: Department of Education: Durban: Matabetulu Primary School: Water and Sanitation: Phase 3. 2019-06-20 11:00 ZNTD 03893W
Kwazulu-Natal: Department of Education: Maphumulo: Mankayiyna Primary School. Replacement of roof coverings to eight (08) classrooms 2019-06-24 11:00 ZNTD 03774W
ZNTD 03893W: WIMS 063666: Kwazulu-Natal: Department of Education: Ndwedwe: Magongolo Primary School: Water and Sanitation: Phase 3. 2019-06-20 11:00 ZNTD 03893W
Kwazulu-Natal: Department of Education: Hillcrest: Kwadinabakudo Combined School: Water and Sanitation: Phase 3. 2019-06-20 11:00 ZNTD 03829W
ZNTD 04062W: WIMS 064026: Kwazulu-Natal: Department of Education: Hillcrest: Khabazela High School: Water and Sanitation: Phase 3. 2019-06-21 11:00 ZNTD 04062W
Kwazulu-Natal: Department of Education: Esiphukwini Junior Primary School: Water and Sanitation: Phase 3. 2019-06-20 11:00 ZNTD 03844W
Kwazulu-Natal: Department of Education: Tongaat: Manaba Secondary School: Water and Sanitation: Phase 3. 2019-06-21 11:00 ZNTD 03939W
Kwazulu-Natal: Department of Education: Mandeni Primary School: Storm Damage Disaster programme: Phase 16 2019-06-24 11:00 ZNTD 04499W
ZNTD 03908W: WIMS 063648: Kwazulu-Natal: Department of Education: Shangase Village: Kwashangase Primary School: Water and Sanitation: Phase 3. 2019-06-20 11:00 ZNTD 03908W
ZNTD 03861W: WIMS 063906: Kwazulu-Natal: Department of Education: Stanger: Mazisi Ntuli Primary School: Water and Sanitation: Phase 3 2019-06-20 11:00 ZNTD 03861W
Tenders are hereby invited for the provision of Hygiene Services for a period of three(3) years. 2019-06-03 11:00 WCC- HYGIENE- 2019
ZNTD 03826W: WIMS 063740: Kwazulu-Natal: Department of Education: Inanda: Inanda Senior Primary School: Water and Sanitation: Phase 3. 2019-06-20 11:00 ZNTD 03826W
Tenders are hereby invited for the supply & delivery of electrical hand tools. 2019-06-03 11:00 WCC- ELECTRIC HAND TOOLS-2019
ZNTD 03865W: WIMS 063907: Kwazulu-Natal: Department of Education: Stanger: Ndleleni Primary School: Water and Sanitation: Phase 3 2019-06-21 11:00 ZNTD 03865W
Tenders are hereby invited for the supply and delivery of vehicles. 2019-05-27 11:00 WCC- NV- 2019
ZNTD 03866W: WIMS 063947: Kwazulu-Natal: Department of Education: Stanger: Mnawe Junior Primary School: Water and Sanitation: Phase 3. 2019-06-20 11:00 ZNTD 03866W
Tenders are hereby invited for the supply, delivery, installation & commission of fitting & turning machines 2019-06-03 11:00 WCC- FIT & TURN MACHINES- 2019

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Must my business be registered in order to tender?

By Werner van Rooyen

www.howtotender.co.za

31 January 2019

Once, a very anxious business owner phoned me and asked if I can supply him with a CK number. I was amused by this and first asked why he asked me for such a number and secondly for what did he need a CK number for? He said that because of my Tender Manual that he bought, he thought that maybe I can help him with a CK number. Also, at the briefing session of the tender that he was responding to, the person in... Read More

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