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.
The Madikwe River Lodge is calling for proposals from reputable tourism agencies to provide marketing and sales services to the resort. 2019-03-20 13:00 MRL001/19
Organised supply and delivery of reagents for the analysis of Chemical Oxygen Demand and Free Chlorine at BCMM municipal laboratory 2019-02-22 12:00 RFQ/DSS/2018-19/364
Operation of an electrical control centre and fault centre in Buffalo City Metropolitan Municipality for a period of three years 2019-03-19 12:00 ED: 405
Re-advertisement: TD-01/06/18: Provision of tyres and tyre associated service items, including new and re-treaded replacement tyres, puncture repairs, fitment, wheel balancing, wheel alignment, wheel rotation and emergency call out to attend to tyre breakdowns for a period of three years 2019-02-22 11:00 TD-01/06/18
Tender for heritage study: De Rust, Dysselsdorp & Oudtshoorn 2019-03-25 12:00 TD-01/02/19
Provision and administration of an electricity and water prepayment vending system for a contract period ending 30 June 2022 2019-03-25 11:00 TD-05/02/19
Supply, delivery, assembly and installation of various items of furniture and accessories for Thusong Centre in Motherwell. 2019-02-28 11:00 SCM/19-97/G
Expression of interest for the supply and delivery of PPE. 2019-03-14 11:00 SCM/19-139/G
Document: Archiving: Learners and Drivers licences. 2019-03-14 11:00 SCM/19-114/S
Standards of Generally Recognised Acccounting Practices (GRAP) financial reporting training service provider for a two year period 2019-02-28 12:00 SAICA0032019
Provision of Security Services at Various ECDC Owned Premises for thirty Six months (3 years) 2019-03-11 12:00 ECDC/ELN/108/012019
Supply and delivery of Road Construction Material for Taweni Access road 2019-03-11 12:00 IHLM/87/01/2018-19/TS
The appointment of a service provider for Finance, Human Resources and Administration services for a period of 12 months. 2019-02-28 14:00 AIP-01/2019
Upgrading of Server Infrastructure and Development of Unified communication 2019-03-20 12:00 019/2018/19
The appointment of a contractor to design, upgrade, install and commission the control system at the aquarium of the National Zoological Garden in Pretoria. 2019-03-04 11:00 SANBI NZG: 325/ 2019
The appointment of a contractor for remedial work to various existing structures including roofs, aquatic mammal pools, and aquarium tanks at the National Zoological Gardens in Pretoria. 2019-03-04 11:00 SANBI NZG: 327/ 2019
The appointment of a contractor for the design and upgrade of existing gravel roads at the Mokopane Biodiversity Centre in Mokopane, Limpopo. 2019-03-05 11:00 SANBI NZG: 330/ 2019
Appointment of service provider for the procurement new fleet 4x4 double cabs(03) and (06) x sedans for the South African Diamond and Precious Metals Regulator 2019-03-15 11:00 SADPMR03/ 2018/ 19
Request to procure service providers for the purposes of headhunting for executive and senior management positions for a period of three (03) years 2019-03-08 11:00 RFA 1892/ 2018
Appointment of a suitable service provider to conduct situational analysis of successful skills programmes offered by SETA Quality Assurance Partners (QAPS) 2019-03-08 11:00 PUR 6000/ 8

Pages

Tender Knowledge

By Werner van Rooyen

www.howtotender.co.za

31 January 2019

Sometimes I am surprised at how little business people in South Africa know about Tenders and the Tender Process. Simple things like terminology and general tender information are difficult for people to comprehend not to mention the Standard Bidding Documents and Tender Pricing.

Unbelievably there are still Entrepreneurs that thinks to respond to tenders are an actual business? You will find that these Entrepreneurs would... Read More

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