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 appointment of a service provider to provide medical surveillance program for 1225 (one thousand two hundred and twenty five) consisting of 72 landfill employees and 1153 general workers over four (4) months. 2019-03-18 11:00 PU058/ 2018
The appointment of panel of service providers for the removal, cleaning and rehabilitation and/or eradication of illegally dumped non-toxic, non-objectionable solid waste and rubble on as and when required basis for thirty six (36) months period. 2019-03-15 11:00 PU047/ 2017
Appointment of service providers for insurance and administration of the subsidized motor transport scheme and the VIP vehicle fleet of the state for the period 1 April 2019 to 31 March 2024 2019-03-08 11:00 RT58- 2019
Invitation to provide catering and canteen services at national health laboratory service head office and Braamfontein office for the period of three (3) years. 2019-03-08 11:00 RFB 156/ 18/ 19
Installation and servicing of Audio Visual and maintenance of Broadcasting Systems, TV Networks including Microwave Transmission Systems for a period of three (3) years. 2019-03-19 11:00 S114/ 18
Department of Public Works: 5 Garnet Road, Park Rynie, Port Shepstone: Provision of security services for a period on thirty (36) months 2019-03-13 11:00 ZNT 2857W
Department of Public Works: Pietermaritzburg: 1 Prince Alfred Street: Provision of security services for a period on thirty (36) months 2019-03-13 11:00 ZNT 2854W
Department of Public Works: 181 Mayors Walk Road, Pietermaritzburg: Provision of security services for a period on thirty (36) months 2019-03-13 11:00 ZNT 2855W
Department of Public Works: Port Shepstone: 35-37 Ridge Road: Provision of security services for a period on thirty (36) months 2019-03-13 11:00 ZNT 2858W
Department of Public Works: Main Road, New Hanover : Provision of security services for a period on thirty (36) months 2019-03-13 11:00 ZNT 2856W
Property for hiring: Interest parties are hereby invited to submit offers to hire the following property”voetstoots” for a two (2) year period, which is owned by the National Dept of Public Works : 2019-03-20 11:00 UCACT1- 10/ 2019
Appointment of a service provider to render maintenance of the electronic security systems at the Department of Public Service and Administration for a period of two (2) years. 2019-03-08 11:00 DPSA005/ 2018
Appointment of a service provider to store records off-site for the Department of Public Service and Administration for a period of 12 months. 2019-03-08 11:00 SCM002/ 2018
Rendering of a comprehensive laundry service to institutions in the Garden Route District, Department of Health, Western Cape Government for a three (3) year period 2019-03-15 11:00 WCGHSC0160/ 2018
Painting of Animal Hospital at Military Veterinary Hospital in Potchefstroom. 2019-03-11 11:00 CPSC- B- M- 031- 2018R
Appointment of a service provider to supply and deliver water tanks to juniorcare landcare projects 2019-03-01 11:00 4.4.12.2/ 37/ 18
Appointment of a service providers for Sage HR & payroll upgrade to Sage 300 people (including e-recruitment), SCM ACCETECH (BPM) for CCMA for a period of three (3) years. 2019-03-08 11:00 CCMA/ 2018/ 19- ICT
Request for information (RFI) appointment of a service provider to provide office space on lease agreement for Mthatha Office for a period of five (5) years. 2019-03-08 11:00 CCMA/ 2018/ 28- EL
The appointment of a supplier(s) for the supply and deliver stationery to the National Energy Regulator of South Africa (NERSA) for a period of thirty-six (36) months. 2019-03-07 11:00 NERSA/ 1819/ FAD/ SOS/ BID005
Removal of Existing Boundary Fence, Supply and Erect New Clearview (Or Equal – Must Be Approved), Anti-Climb Security Fence, Pedestrian and Drive Gates at Central Office and Main Campus 2019-03-15 10:00 CENT- FENCE- 2019

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10 things to remember when you tender

By Werner van Rooyen

31 January 2019

There are many things that you as a small business owner must remember when you respond to a tender and sometimes responding to a tender can be overwhelming. Experience has taught me that there are some important things to remember when responding to a Tender and there are some less important things to remember when responding to a Tender.

Here are ten of the important things to remember when responding to a Tender. Please remember that all ten of these items mention here are equal... Read More

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