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.
Biopsy Instrument Co-Axial. 18g X 15cm Or 18g X 10cm; 18g X 9cm, 16g X 15cm,16g X 9cm Or 16g X 10cm; 14g X 9cm. 2018-08-28 11:00 ZNQ NO.139/ 04/ 18
Supply double action floor spring for timber doors. BTS 60, SS cover plate, dust cover, spindle, bottom strap, top centre, max door width: 1000mm, max door weight 80kg, hydraulic speed control. Hold open only. Components: BTS 60. Ss cover plate, dust cover, spindle, bottom strap, top centre. (to view sample at workshop - Mr. C. Fenner) (provide sample) specification will be attached. Quantity: 4 sets of double door springs 2018-08-28 11:00 ZNQ NO.2220/ 07/ 18
Appointment of a service provider to supply and deliver bee hives, super chambers, bee hive stands and bee colonies for Oranje Kalahari Bye Boerdery Pty (Ltd) project in the Dawid Kruiper Local Municipality, ZF Mgcawu District within the Northern Cape Province 2018-09-07 11:00 5/ 2/ 2/ 1 NC RDLR- 0004(2018/ 2019)
Supply & install 150MM flanged key gate valves in manholes. 2018-08-28 11:00 ZNQ NO.2219/ 07/ 18
Repairs to skywalk between nursing college & doctors quarters as per spec. 2018-08-28 11:00 ZNQ NO.2229/ 07/ 18
Supply Nitinol (Mandril) guide wire: 60cm .018” quantity: 50 units 2018-08-28 11:00 ZNQ NO.1898/ 07/ 18
Supply Brother toner cartridges tn3290 (original only) 6 month contract. (Toners to be delivered monthly in batches of 10 units.) = 60 UNITS 2018-08-28 11:00 ZNQ NO.2147/ 07/ 18
Supply, Delivery, Installation and commissioning of ICP-MS instrument 2018-09-17 12:00 MTK 08/ 2018
Long Term, Retrograde Catheters Double Lumen - 31cm’s 2018-08-28 11:00 ZNQ NO.1773/ 07/ 18
Intra Osseous Needle 15g X 30mm X 10 Units. 2018-08-30 11:00 ZNB 26/ 2018- 2019
Appointment of a service provider for the supply of Office Furniture at the Independent Communications Authority Head Office (Centurion) for a period 80/20 PPPFA 2000, Preferential Procurement Regulation: 2017. 2018-08-27 11:00 ICASA 23/ 2018
Appointment of a professional service provider for the provision of the Internet Service Provider (ISP) for the duration of 36 months for Water Research Commission. 2018-09-07 11:00 WRC- 005- 18/ 19
Fully Equiped Emergency Trolley with Rescuscitation Board, Drawers, Side Racks, Drip Stand and Defibrillator Stand (Paeds and Adults) x 02 2018-08-24 11:00 ZNQ 111 2018/ 19
The Procurement of a Level Two Field Hospital as per African Union (AU) and United Nations (UN) Standards for the South African Military Health Services. 2018-09-17 11:00 CPSC- B- M- 086- 2017RR
R/M32/2018: 4(four) x roller: vibr. pedestrian: 900kg (3E) 2018-09-18 11:00 S081/ 18
R/M43/2018: 14 (fourteen) x breaker: paving engine: standard 2018-09-18 11:00 S082/ 18
Appointment of two National Accounts Consultants to assist Statistics South Africa (Stats SA) with the rebasing and benchmarking of Gross Domestic Product (GDP) and the updating of the Supply and Use Tables (SUT’S). 2018-08-31 11:00 Stats SA 001/ 18
Provision of Travel Management Services in SIU for a period of 36 months. 2018-09-11 11:00 RFP: 030/ 08/ 2018
R/M36/2018: 8 (eight) x trailer: water: <1000l 2018-09-18 11:00 S080/ 18
Appointment a professional service provider to develop a concept document to assist PSiRA to establish a private security industry guarantee fund and perform an actuarial service to establish viability of the fund for The Private Security Industry Regulatory Authority (PSiRA) for a period of 8 months 2018-09-18 11:00 RFB/ 2018/ PSiRA/ 05

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