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.
Couplings Straight 20 Mm X 3/4" Male Polypropylen E For Hdpe Pipe 2018-12-21 11:00 SQ12181326
Clamps Centre Phase Pole For 22kv Single Pole Construction As Per Drawing A2/539 Available At Purchase Office, Harrower Road, P.E 2018-12-21 11:00 SQ12181326
Adaptors Flanged 100 Mm Iron Class "C" Drilled 4504 Table 16 F.B.E. Coated Blue. 2018-12-21 11:00 SQ12181327
Pipes Pvc 96 Mm Class 16 -Supplied In 6 Meter Lengths. 2018-12-21 11:00 SQ12181327
Toilet Seat Double Flap Complete With Bolts & Nuts Colour White National N I P Fs28b 2018-12-21 11:00 SQ12181327
Request for Proposal for Airport Economic, Social and Environmental Impact Study for five (5) years 2019-02-15 11:00 COR5649/2018/R
Tenders are invited from an international rating agency who is a registered CRA to perform Annual Credit Rating 2018-12-21 11:00 CSQ12181512
Ballcock 25 Mm Rough Brass 1090 Fi Sabs, Jaswic Approved. 2018-12-21 11:00 SQ12181329
Ballcock 20mm Rough Brass Cobra 1090 Fi Sabs . Jaswic Approved. 2018-12-21 11:00 SQ12181329
Ballcock 15 Mm Rough Brass 1090 Cobra S.A.B.S. (Jaswic Approved) 2018-12-21 11:00 SQ12181329
Supply & Delivery of Poles Steel Heavy Duty Galvanised Type H Straight No Bow Single Spigot 2018-12-21 11:00 SQ12181330
Supply & deliver Light Commercial Tyres 195/R15/C 2018-12-18 11:00 SQ12181331
Tenders are invited to Supply and Deliver Chemical Oxygen Demand (COD) for Spectrophotometer 2018-12-18 11:00 GQ12182009
Tenders are invited for Monthly Service to provide Data Services for 1200 Data Cards Registered on the MTN APN as per Account : A1387418 2018-12-18 11:00 CSQ12181510
Tenders are invited for Monthly Service for Providing a Private APN Service on the MTN Network as per Mtn Account Number 071441 2018-12-18 11:00 CSQ12181510
Tenders are invited to Supply and Deliver Wooden Boards 2018-12-18 11:00 GQ12182006
Tenders are invited to provide Stack Emissions Testing Training 2018-12-19 11:00 CSQ12181509
Tenders are invited to provide Electromagnetic Radiation Training 2018-12-19 11:00 CSQ12181509
Rental Of Photocopier Machines for a period of 36 months 2019-01-11 12:00 104/2018
Invitation for the provision of security services at Ngaka Modiri Molema District for the department of social development 2019-01-29 11:00 NW/DSD/04/2018

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