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.
Tenders are hereby invited for the supply, delivery, installation & commission of fitting & turning machines 2019-06-03 11:00 WCC- FIT & TURN MACHINES- 2019
ZNTD 03910W: WIMS 063652: Kwazulu-Natal: Department of Education: KwaDukuza: Embuyeni Primary School:Water and Sanitation: Phase 3 2019-06-21 11:00 ZNTD 03910W
ZNTD 03832W: WIMS 063756: Kwazulu-Natal: Department of Education: Stanger: Ndukende Secondary School: Water and Sanitation: Phase 3 2019-06-21 11:00 ZNTD 03832W
ZNTD 03885W: WIMS 063662: Kwazulu-Natal: Department of Education: Ndwedwe: Nhlangakazi Primary School: Water and Sanitation: Phase 3 2019-06-21 11:00 ZNTD 03885W
ZNTD 04522W: WIMS 068948: Kwazulu-Natal: Department of Education: Inanda: Nyoni Primary School: Storm Damage Disaster programme: Phase 16 2019-06-24 11:00 ZNTD 04522W
ZNTD 03872W: WIMS 063741: Kwazulu-Natal: Department of Education: Durban: Shembe Primary School: Water and Sanitation: Phase 3 2019-06-20 11:00 ZNTD 03872W
ZNTD 04106W: WIMS 065337: Kwazulu-Natal: Department of Education: Dalton: Qalakahle High School: Water and Sanitation: Phase 3. 2019-06-20 11:00 ZNTD 04106W
Request for Internal Audit and Risk Management Services at the National Department of Health (Ndoh) Inclunding It’s Trading Entity (Compensation Commissioner for Occupational Diseases (Ccod)/ Medical Bureau for Occupational Diseases (Mbod) with Suitable Auditing and Accounting Service Provider 2019-05-27 11:00 NDOH 02/ 2019- 2020
Tenders are hereby invited for the supply & delivery pipe fitter hand tools. 2019-06-03 11:00 WCC- PIPE FIT HAND TOOLS- 2019
ZNTD 03944W: WIMS 063518: Kwazulu-Natal: Department of Education: Tongaat: Qhubakahle Primary School: Water and Sanitation: Phase 3 2019-06-20 11:00 ZNTD 03944W
ZNTD 03884W: WIMS 063945: Kwazulu-Natal: Department of Education: Kwamashu: Sakhisizwe High School: Water and Sanitation: Phase 3. 2019-06-20 11:00 ZNTD 03884W
ZNTD 03871W: WIMS 063903: Kwazulu-Natal: Department of Education: Ndwedwe: Sukhumuzi Primary School: Water and Sanitation: Phase 3 2019-06-20 11:00 ZNTD 03871W
ZNTD 03858W: WIMS 063917: Kwazulu-Natal: Department of Education: Stanger: Nsongansonga Primary School: Water and Sanitation: Phase 3 2019-06-20 11:00 ZNTD 03858W
ZNTD 03894W: WIMS 063663: Kwazulu-Natal: Department of Education: Ndwedwe: Ntathakusa Primary School: Water and Sanitation: Phase 3 2019-06-21 11:00 ZNTD 03894W
Appointment of a Service Provide to Provide Additional Licenses for Addm Discovery Application, Maintenance and Support with Professional Services for a Period of Three (3) years 2019-06-07 11:00 RFB 1944/ 2019
Supply of hardware support and license renewals for the F5 Load Balancers used at the Government Pensions Administration Agency for a period of thirty-six (36) months 2019-06-07 11:00 RFB 1927/ 2019
Renewal of OpenText Content Server (EDMS) software, Contract Management, Electronic Signature, OpenText Everywhere, Tempo Social and Tempo Box licenses including maintenance and support for a period of three (3) years 2019-06-07 11:00 RFB 1932/ 2019
Appointment of a service provider for the Supply, Installation and Configuration of an Enterprise AV (anti-virus) Solution for the Gauteng Department of Education (GDE) schools with maintenance and support for a period of three (3) years” 2019-06-07 11:00 RFB 1931/ 2019
SANParks invite prospective bidders to submit offers for Black Rhino 2019-06-06 11:00 BRS- 001- 2019
Procurement of an Asset Management Company from date of appointment until 31 March 2020. 2019-06-07 11:00 RFP/ SASSETA/ 201819134/ 1

Pages

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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