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.
Removal of Existing Boundary Fence, Supply and Erect New Clearview (or Equal – Must Be Approved), Anti-Climb Security Fence, Pedestrian and Drive Gates at Lere La Tshepe Campus 2019-03-15 10:00 LERE- FENCE- 2019
Removal of Existing Boundary Fence, Supply and Erect New Clearview (Or Equal – Must Be Approved), anti-Climb Security Fence, Pedestrian and Drive Gates at Bonamelo Campus 2019-03-15 10:00 BON- FENCE- 2019
Structural Repairs, Internal and External Repairs and Renovations, Plumbing and Electrical Repairs and Renovations to the Classroom Block at the Bethlehem Campus Heritage Building. 2019-03-15 10:00 BETH- OLDBLOCK- 2019
Construction of New Male and Female Ablution Facilities Including Water Storage Facilities, Grey Water Treatment Facilities and Electrical Installation at Lere La Tshepe Campus. 2019-03-15 10:00 LERE- ABLUTION- 2019
Structural Repairs and Foundation Repair to External Classroom Walls at Itemoheleng Campus 2019-03-15 10:00 ITEM- WALLS- 2019
Roof Structure and Roof Sheeting Repairs and Replacement, Where Necessary, Including Waterproofing at Lere La Tshepe Campus 2019-03-15 10:00 LERE- ROOF- 2019
Repairs Including Structural, Roof and Internal Changes to Fire Damaged Office Building – Central Office 2019-03-15 10:00 CENT- BUILDING- 2019
Supply and Establishment of Park Homes: Chwezi Clinic 2019-03-14 11:00 ZNB 9505/ 2018- H
Maintenance and operation of the Air Conditioners: Natalia Building: 3 year contract 2019-03-15 11:00 ZNB 5480/ 2018- H
Construction of New Educational Facilities and Demolition of Old Structures at Sophatisana Secondary School 2019-03-11 12:00 CDC/ 59/ 19
Renewal of Nintex Licenses, Including Support and Maintenance for Period of Twelve (12) ,Months for South African Social Security Agency (Sassa). 2019-03-11 11:00 RFB 1816/ 2018
Procurement of an Integrated IT Operations Network Troubleshooting Tool Including Maintenance and Support Services 2019-03-18 11:00 RFP 35- 2018
Appointment of a Contractor to Conduct Various Construction Projects, Including Installation of Bird Netting, Installation of Foot Baths and Vehicle Tyre Baths, Renovations to Enclosure Wire Roofs; and Modification To Small Mammal Enclosures, at the National Zoological Garden In Pretoria 2019-03-05 11:00 SANBI NZG: 326/ 2019
Appointment of a Contractor for the Design and Construction a New Animal Quarantine Facility at the National Zoological Garden In Pretoria. 2019-03-05 11:00 SANBI NZG: 329/ 2019
Appointment of a Contractor for the Design and Construction of a Masonary Boundary Wall, Covered Staff Parking and to Conduct Remedial Work at Food and Beverage Outlets at the National Zoological Garden In Pretoria. 2019-03-05 11:00 SANBI NZG: 328/ 2019
Appointment of a Contractor for the Design, Installation and Commissioning of an Incinerator at the National Zoological Garden In Pretoria. 2019-03-04 11:00 SANBI NZG: 322/ 2019
Appointment of a Contractor for the Design, Supply and Installation of Mechanical Equipment, Including Pumps, Stand By Generators and HVAC at the National Zoological Garden In Pretoria. 2019-03-04 11:00 SANBI NZG: 323/ 2019
Procurement of Cleaning and Hygiene services to SITA Durban building for a period of 36 Months 2019-03-08 11:00 RFB 1866/ 2018
Invitation to tender for Rental Office Space for Seda’s Tshwane Branch Office in Pretoria for a period of Three (3) or Five (5) years 2019-03-08 12:00 RFP/ T 14- 2018/ 19
Invitation to tender for Rental Office Space for Seda’s Gauteng Provincial Office in Johannesburg for a period of Three (3) or Five (5) years 2019-03-08 12:00 RFP/ T 13- 2018/ 19

Pages

Tender Knowledge

By Werner van Rooyen

www.howtotender.co.za

31 January 2019

Sometimes I am surprised at how little business people in South Africa know about Tenders and the Tender Process. Simple things like terminology and general tender information are difficult for people to comprehend not to mention the Standard Bidding Documents and Tender Pricing.

Unbelievably there are still Entrepreneurs that thinks to respond to tenders are an actual business? You will find that these Entrepreneurs would... Read More

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