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.
The Department of Local Government (DLG) requires a Service Provider to provide the Municipal Minimum Competency (MMC) Training programme to identified officials. 2019-06-18 11:00 LG 02/ 2019/ 2020
Appointment of a service provider to provide employee wellness services to the Department of Home Affairs officials across all provinces, including Head Office for a period of two (2) years and eight (8) months 2019-06-07 11:00 DHA04- 2019
Terms of Reference for the Appointment of a Suitable Service Provider to Develop Monitoring and Evaluation Framework, and Evaluation Plan and Conduct The Mid-Term and Summative Evaluation for National Open Learning Project (Nols) by the Department of Higher Education and Training 2019-06-21 11:00 DHET124
The Appointment of a Service Provider to Provide an E-Legislation Portal on the Department’s Website for a period of 3 (three) years 2019-06-07 11:00 E 1513
Request To Bid for ANSYS Technical Support (TECS) Contract for ANSYS Commercial Software on Behalf of Department of Defence (Dod) SA Navy Engineering Services (NES) for a period of three (3) years. 2019-06-05 11:00 RFB 1939/ 2019
Request for Proposals for appointment of an service provider for short term insurance for a period of five (5) years 2019-06-10 11:00 CMS/ 022019/ 2020
Request for Proposals for appointment of an Editorial Consultant for a period of three (3) years 2019-06-18 11:00 CMS/ 032019/ 2020
Appointment of a panel of law firms to assist the Council for Geoscience with all its corporate work for a period of three (3) years. 2019-06-14 11:00 CGS- 2019- 006L
Appointment of a Professional Service Provider to Provide Facial Recognition and Queue Management System to the CIDB for a period of 36 months. 2019-06-18 11:00 RFB60058
Re-Advertisement-The Development Of Standards For The Eco Label Scheme At Agrément South Africa: Wool and Wool-Rich Pile Carpets 2019-06-12 16:00 ASA 04/ 2019
Re-Advertisement-The Development of Standards for the Eco Label Scheme at Agrément South Africa: Paints and Coatings 2019-06-12 16:00 ASA 03/ 2019
Provision of Canteen Services 2019-06-14 12:00 MTK 02/ 2019
ZNTD 03855W: WIMS 063751: Kwazulu-Natal: Department of Education: Stanger: Tshutshutshu Secondary School: Water and Sanitation: Phase 3. 2019-06-20 11:00 ZNTD 03855W
Appointment of a Cleaning Company to render cleaning, pest control and hygiene services in Block G which is situated adjacent to the dti campus for a period of 3 years 2019-06-07 11:00 dti 03/ 19- 20
Grahamstown High Court: Provision of Cleaning Services for a Period of twenty four (24) Months 2019-06-11 11:00 PEC02/ 2019
Appointment of a service provider for physical security guarding services in Northern Cape and Free State 2019-06-07 11:00 DH05- 2019
Consulting Engineering Services for Routine Road Maintenance of National Route N10 Section 3 Km 37.62 To Km 81.59 and National Route R61 Section 2 Km 17.25 To Section 3 Km 41.48 and National Route R390 Section 1 Km 0.00 to Section 2 Km 23.56. 2019-06-07 14:00 NRA X.003- 040- 2019/ 1F
Consulting Engineering Services for the Routine Road Maintenance of National Routes R56 Section 1 (Km 58.78) to Section 2 (Km 30.81) and National Routes R58 Section 1 (36.96) to Section 3 (Km 55.73) and National Route R391 Section 2 (Km 0.0) To (Km 37.09) and National Route R390 Section 2 (Km 23.56) To (Km 34.46). 2019-06-07 14:00 NRA X.003- 044- 2019/ 1F
ZNTD 03952W: WIMS 064144: Kwazulu-Natal: Department of Education: Umbumbulu: Umthente High School: Water and Sanitation: Phase 3 2019-06-21 11:00 ZNTD 03952W
Consulting Engineering Services for the Routine Road Maintenance of National Routes R56 Section 1 (Km 58.78) to Section 2 (Km 30.81) and National Routes R58 Section 1 (36.96) to Section 3 (Km 55.73) and National Route R391 Section 2 (Km 0.0) To (Km 37.09) and National Route R390 Section 2 (Km 23.56) To (Km 34.46). 2019-06-07 14:00 NRA X.003- 044- 2019/ 1F

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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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