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.
Pretoria: Service, Repairs and Maintenance of Air Conditioners at Department of Home Affairs New Cooperation Building for period of 24 months 2018-11-20 11:00 PT18/ 035
Cleaning brush 420mm x 5mm (instruments) 2018-10-30 11:00 PSH 859/ 1819
Pretoria: Service, Repairs and Maintenance of Air Conditioners at SANDF Blenny building for period of 24 months 2018-11-20 11:00 PT18/ 037
Pretoria: Service, Repairs and Maintenance of Air Conditioners at Thaba Tshwane 1 Military Hospital for period of 24 months 2018-11-20 11:00 PT18/ 036
Pretoria: SAPS: Repairs and maintenance of roof and stabilizing of foundation for Salvokop Radio Tech Unit Official Quarters 2018-11-20 11:00 PT18/ 034
Midlands Region: Department of Public Works: Regional Office Extension of the Existing Parking Area Contract Period : Six (06) Calendar Months. 2018-11-19 11:00 ZNTL 03930 W
NDPW: Repairs and replacement of all types of roofs, waterproofing, roof tiling, building works, facia, barge, ceilings and bird proofing for all Clients within the jurisdiction of the JHB Regional Office for a period of 24 months. 2018-11-13 11:00 JHB.18/ 18
Biliblanket pads for neonates and premature babies. 2018-10-30 11:00 PSH 877/ 1819
KIMBERLEY AREA B: Service, repair and maintain all kitchen equipment for 24 months. 2018-11-09 11:00 KIM- 0718- 107087
Request for proposals for training and workshops on sexual reproductive health education in the John Taolo Gaetsewe District for a period of 36 months for Northern Cape Department of Education. 2018-11-09 11:00 NC/ DE/ 005/ 2018- 2019
Southern Corridor Phase 1 - Ithemba West Housing Project 2018-11-26 11:00 Western Cape: Department of Human Settlements: Supply Chain Management
Request for proposals to appoint a service provider to render psychosocial support to identified learners in the John Taolo Gaetsewe District for a period of 36 months for Northern Cape Department of Education. 2018-11-09 11:00 NC/ DE/ 004/ 2018- 2019
Southern Corridor Phase 1 - Ithemba East Housing Project 2018-11-26 11:00 HSC 06/ 2018/ 2019
Conduct women Councillors gender mainstreaming training programme 2018-11-09 11:00 COGTA 4/ 2/ 2- 2018/ RFP/ 04
Construction Of Infrastructure For Cement Crusher Plant (OSHO) and Kenako Concrete Batching Plant In Zone 5 Of The SEZ Retender 2018-11-12 12:00 CDC/ 496/ 18
Request for Proposal - Expression of Interest - provision of an E-Sourcing solution. 2018-10-31 17:00 ESD0001
The South African Social Security Agency hereby invites proposals from independent auditors to perform audit verification on cash paymaster services (Pty ) Ltd ( CPS)’s audited statements of expenses incurred, income received and net profit earned for a period not exceeding Four (4) Months. 2018-11-02 11:00 SASSA: 13/ 18/ IA/ HO
The appointment of a service provider to conduct feasibility study for the Amalgamation of the Department of Arts and Culture (DAC) entities. 2018-11-09 11:00 DAC 13/ 18- 19
The South African Social Security Agency hereby invites proposals from potential service providers to provide the CONTENT LIFECYCLE MANAGEMENT SUITE 16 ( LIVELINK) Support and Maintenance for a period of three (3) years 2018-11-09 11:00 SASSA: 14/ 18/ ICT/ HO
Food mincer. Quantity: 1 unit 2018-10-30 11:00 PSH 959/ 1819

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Consortiums are often considered as entities to use when responding to tenders in South Africa. The question that arises is whether to use a Consortium or a Joint Venture when responding to a tender. To help you with this we have compiled a list of advantages and disadvantages for both Consortiums as well as Joint Ventures. In this article we list the advantages and disadvantages of Consortiums. Look out for the same article on Joint Ventures.

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