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.
Appointment of experienced Service Providers with a verifiable track record and accredited for the delivery of a range of skills programmes, across the Northern Cape province in various localities 2019-06-06 11:00 NCEDA19/ 01
ZNTD 03940W: WIMS 063515: Kwazulu-Natal: Department of Education: Tongaat: Nondabula Primary School: Water and Sanitation: Phase 3. 2019-06-20 11:00 ZNTD 03940W
Appointment of a Bidder to Provide Hygiene Care Services in Order to Maintain Hygiene in all of the Restroom Facilities, Watercoolers, and Satellite Kitchens In The Building For Five Years 2019-06-07 11:00 NRF/ RISA B&M/ 001/ 2019- 20
ZNTD 03842W: WIMS 063613: Kwazulu-Natal: Department of Education: Umlazi: Intinyane Primary School: Water and Sanitation: Phase 3 2019-06-21 11:00 ZNTD 03842W
Request for Proposal: Appointment of Suitable Service Provider to Implement The Women Empowerment Programme for a period of two (02) years 2019-06-07 11:00 NHBRC 01/ 2019
ZNTD 04074W: WIMS 065113: Kwazulu-Natal: Department of Education: Stanger: Mvumase Primary School: Water and Sanitation: Phase 3 2019-06-21 11:00 ZNTD 04074W
ZNTD 04019W: WIMS 064695: Kwazulu-Natal: Department of Education: Phoenix: Skylark Primary School: Eradication of woodborer and lice 2019-06-24 11:00 ZNTD 04019W
The appointment of a service provider to provide the National Energy Regulator of South Africa (NERSA) with Online Legal Publications for a period of three (3) years. 2019-06-06 11:00 NERSA/ 1920/ IRM/ OLP/ BID/ 003
Service provider to provide comprehensive travel management service 2019-06-03 11:00 ZNT19/ 20KZNSB01
Appointment of a Panel of Service Providers to Provide Quality Learning for MHSC Employees for a Period of One Year (01) 2019-06-19 11:00 MHSC009/ 2019- 20
ZNTD 03966W: WIMS 064110: Kwazulu-Natal: Department of Education: Hillcrest: Thabela High School: Water and Sanitation: Phase 3. 2019-06-21 11:00 ZNTD 03966W
Provision of Support and Maintenance of the electronic Legal Aid Administration System at Legal Aid South Africa National Office for a period of twelve (12) months. 2019-06-18 11:00 06/ 2019
iSimangaliso Wetland Park Authority invites suitable, qualified and competent legal firms to send requests for proposal to be considered as part of a panel of attorneys to provide legal services to iSimangaliso Wetland Park Authority 2019-06-07 16:00 RFP NUMBER: 03/ 2019
ZNTD 03878W: WIMS 063900: Kwazulu-Natal: Department of Education: Stanger: Tshelabantu Primary School: Water and Sanitation: Phase 3 2019-06-20 11:00 ZNTD 03878W
Re- Advertisement: Appointment of a Professional Service Providers for the Supply, Installation and Connection of Heat Pumps for 112 Units at Delville Ext 9 2019-06-19 11:00 EHCHPD/05/19
Provision of office accommodation for the ECRDA 2019-06-07 11:00 SCMU 02 – 2019/20:
Request for Proposals for the Provision of Ad Hoc Engineering Services for Dube Tradeport Corporation for a Period of 3 years 2019-06-10 11:00 DTP/ RFP/ 32/ IFR/ 11/ 2018
Appointment of a Service Provider for the Provision of Technical Support and Monitoring of Integrated Public Transport Network in 13 Municipalities over a Period of 36 Months 2019-06-07 11:00 DOT/ 01/ 2019/ PT
Conducting research on pharmaceutical pricing policies 2019-06-07 12:00 DPME 09/ 2019- 20
Fly-Trhough / Visual Rendering In Support of the Ndp 5 Year Implementation Plan 2019-05-31 12:00 DPME 08/ 2019- 20

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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