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 a panel of debt collectors for PSiRA for a period of 3 years. 2018-09-19 11:00 RFB/ 2018/ PSiRA/ 06
The Province of KwaZulu Natal, Department of Transport, invites tenders from Vukuzakhe Contractors. Tenderer must be registered as grade 3 CE only with the CIDB in the Civil Engineering class of construction works 2018-09-14 11:00 ZNT373T/ C235/ 1100/ S/ 3
Appointment of a technical assistant to undertake an economist/education planner role on The Eastern Cape Department of Education (ECDoE) Schools Rationalisation Project. 2018-09-07 11:00 GTAC 022- 2018
The Province of KwaZulu Natal, Department of Transport, invites tenders from Vukuzakhe Contractors. Tenderer must be registered as grade 3 CE only with the CIDB in the Civil Engineering class of construction works 2018-09-14 11:00 ZNT373T/ C235/ 1100/ S/
Purchase of a Lowbed Trailer 2018-09-07 11:00 ZNB0003/ 18
The appointment of service provider for rendering of general cleaning services for surveyor-general: Cape Town for a period of thirty six (36) months for number 90 Plein Street, Part 8th floor, 9th & 10th floors. 2018-09-07 11:00 SSC WC 09 (2018 / 2019) DRDLR
The Province of KwaZulu Natal, Department of Transport, invites tenders from Vukuzakhe Contractors. Tenderer must be registered as grade 3 CE only with the CIDB in the Civil Engineering class of construction works 2018-09-19 11:00 ZNT373T/ C237/ 1200/ S/ 9
Appointment of a suitable service provider for the management of SAP hosting service for a period of two (02) years. 2018-09-17 11:00 NHBRC 03/ 2018
The Province of KwaZulu Natal, Department of Transport, invites tenders from Vukuzakhe Contractors. Tenderer must be registered as grade 3 CE only with the CIDB in the Civil Engineering class of construction works 2018-09-19 11:00 ZNT373T/ C237/ 1200/ S/ 5
Request for proposals for the appointment of a suitable service provider on a panel to conduct consulting service in the built environment for a period of three (03) years 2018-09-19 11:00 NHBRC 01/ 2018
The Province of KwaZulu Natal, Department of Transport, invites tenders from Vukuzakhe Contractors. Tenderer must be registered as grade 3 CE only with the CIDB in the Civil Engineering class of construction works 2018-09-19 11:00 ZNT373T/ C237/ 1200/ S/ 10
Appointment of a service provider for technical and functional support for the implemented SAP solution for a period of three (03) Years. 2018-09-17 11:00 NHBRC 02/ 2018
Appointment of Service provider to Develop and Implement an Enterprise Resource Planning System for the MQA. 2018-09-19 11:00 MQA/ 05/ 18- 19
Minor Structure Repairs on P272 2018-09-17 11:00 C252/ 1718/ MS/ 592
Upgrade of Main Road P16-3 from KM28+200 to KM33+800 - CIDB Grading 8CE 2018-09-13 11:00 ZNT3656/ 15
Appointment of service providers for the supply and delivery of branded promotional material/items to INSETA. 2018-09-11 11:00 Proj/ 2018/ 07
Pretoria: Bryntirion, Construction of Roads, Stormwater, Water Reticulation and Sewer on Western side and Central area of the Bryntirion Estate 2018-09-18 11:00 PT18/ 025
Servicing of heat pumps 2018-08-24 11:00 ZNQ58/ 18/ 19
Appointment of a service provider to provide job profiling, grading and remuneration survey/bench marking services. 2018-08-27 11:00 RFQ/ 2018/ 63
Servicing of sewer pump 2018-08-24 11:00 ZNQ68/ 18/ 19

Pages

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