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.
Betterment and Regravelling on District Road D1575 between Chainage 0.00km to 1.50km in the Ndwedwe Local Municipality for Grade 3CE Vukuzakhe Contractors 2018-11-20 11:00 ZNT373T/ 3/ C2930/ 017/ S/ 1/ 2018- 2019
Firearm safe - wall mounted 2018-10-30 11:00 PSH 783/ 1819
The Drain Clearing and Verge Maintenance On P2-3 From Km 7.567 To Km 38.056 in the Mandeni Local Municipality (Kz291) For Grade 3CE/SH Vukuzakhe Contractors 2018-11-22 11:00 ZNT 373T/ 3/ C2910/ 049/ S/ 1/ 2018- 2019
Folding white cane 2018-10-30 11:00 PSH 711/ 1819
The Betterment, Regravelling and Drainage on D1525 From Km 0.00 To Km 4.00 in the Maphumulo Local Municipality (KZ294) For Grade 3CE Vukuzakhe Contractors. 2018-11-22 11:00 ZNT 373T/ 3/ C2940/ 007/ S/ 1/ 2018- 2019
The Appointment of a Structural Engineer to Assess the Structural Integrity of Roofs for the Rooftop Solar Project. 2018-11-09 11:00 GT/ GIFA/ 146/ 2018
The Construction Of Sidewalks On D893 From Km 0.80 To Km 1.10 In The Maphumulo Local Municipality (Kz294) Contract 2 For Grade 2CE Vukuzakhe Contractors 2018-11-22 11:00 ZNT 373T/ 2/ C2940/ 186/ S/ 1/ 2018- 2019
Invitation for open tender for the development of a Transport Masterplan for the 7157ha of the Tshwane Automotive City in Rosslyn. 2018-11-13 11:00 AIDC T07/ 2018
The Betterment, Regravelling and Drainage On D881 From Km 0.00 To Km 6.00 In The Maphumulo Local Municipality (Kz294) For GRADE 3CE Vukuzakhe Contractors. 2018-11-22 11:00 ZNT 373T/ 3/ C2940/ 004/ S/ 1/ 2018- 2019
The Betterment, Regravelling And Drainage On P224 From Km 0.000 To Km 4.386 In The Mandeni Local Municipality (Kz291) For Grade 3CE Vukuzakhe Contractors. 2018-11-22 11:00 ZNT 373T/ 3/ C2910/ 008/ S/ 1/ 2018- 2019
The Construction of Sidewalks on D894 From Km 1.00 To Km 1.30 in the Maphumulo Local Municipality (KZ294) for Grade 2CE Vukuzakhe Contractors. 2018-11-22 11:00 ZNT 373T/ 2/ C2940/ 187/ S/ 1/ 2018- 2019
The aim of the project is to undertake a province-wide physical verification of all spaza shops and produce quality reliable data to assist the GEP and Gauteng Department of Economic Development (GDED to make informed decisions pertaining to legal and illegal spaza shops. 2018-11-13 11:00 GEP003/ SPAZASHOPPROJECT/ 18
The Betterment, Regravelling And Drainage On D1632 From Km 4.50 To Km 8.50 In The Maphumulo Local Municipality (KZ294) For Grade 3CE Vukuzakhe Contractors 2018-11-22 11:00 ZNT 373T/ 3/ C2940/ 009/ S/ 1/ 2018- 2019
The Betterment, Regravelling And Drainage On D1527 From Km 4.00 To Km 8.00 In The Maphumulo Local Municipality (Kz294) For Grade 3CE Vukuzakhe Contractors 2018-11-22 11:00 ZNT373T/ 3/ C2940/ 002/ S/ 1/ 2018- 2019
The Betterment, Regravelling and Drainage On P719 From Km 4.00 To Km 8.00 in the Mandeni Local Municipality (Kz291) For GRADE 3CE Vukuzakhe Contractors. 2018-11-22 11:00 ZNT 373T/ 3/ C2910/ 006/ S/ 1/ 2018- 2019
Development test of visual perception -third edition 2018-10-30 11:00 PSH 492/ 1819
The Betterment, Regravelling and Drainage On L2450 From Km 0.00 To Km 6.00 in the Mandeni Local Municipality (Kz291) For Grade 3CE Vukuzakhe Contractors 2018-11-22 11:00 ZNT373T/ 3/ C2910/ 003/ S/ 1/ 2018- 2019
The Betterment, Regravelling and Drainage On D1632 From Km 0.00 To Km 4.50 in the Maphumulo Local Municipality (KZ294) For Grade 3CE Vukuzakhe Contractors 2018-11-22 11:00 ZNT 373T/ 3/ C2940/ 005/ S/ 1/ 2018- 2019
Provision of accredited training, establish SMME’s & Cooperatives, provide job readiness and training. 2018-11-13 11:00 GEP005/ YOUTHYMPO18
Aspirating tube. Size: 8ml. 2018-10-30 11:00 PSH 961/ 1819

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