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.
Request to Appoint a Panel of External Compliance Risk Management Service Providers for a period of three (03) years 2018-11-09 11:00 RFA 1824/ 2018:
The Department of Arts and Culture (DAC) invites suitably, qualified and experienced service provider to bid for a task of Development and Implementing Arts and Culture Development Programmes in collaboration with Community Arts Centres (CACs) and Community Arts Organisation in the four provinces of Free State, Mpumalanga, Northen Cape, and Limpopo. 2018-11-09 11:00 DAC 11/ 18- 19
Appointment of a Service Provider to Provision, Upgrade And Implement Sage Enterprise Resource Planning (ERP) System To Robben Island Museum (RIM) for the period of thirty-six (36) months 2018-11-19 11:00 RIM ICT- 02- 2018 / 2019
The appointment of a service provider to render project management services in the implementation of training, mentorship and placement of graduates in farms funded by the national skills fund. 2018-11-16 11:00 4.4.12.4/ 14/ 18
Appointment of a Service Provider to undertake a comprehensive refurbishment of a 13m fibreglass coastal research vessel, including the provision of a dolly, routine and unforeseen maintenance and modifications to the vessel over a period of three (3) years 2018-11-19 11:00 NRF/ SAIAB/ 2019- 006
Appointment of a panel of service providers to supply and deliver 50ppm diesel in the ports of Mossel Bay, Cape St. Francis, Port Elizabeth, East London, Durban and Richards Bay to fuel two coastal research vessels and vehicles for a period of five (5) years 2018-12-05 11:00 NRF/ SAIAB/ 2019- 002
Repairs and upholstery of chairs - 29 chairs 2018-10-26 11:00 ZNQ 61/ 08/ 2018
Welkom Department of Rural Developement and Land Reform (Drd & Lr): Lejweleputswa District: Alternative Office Accommodation and Parking Facilities (1557.50m² and 20 Parking Bays) 2018-11-13 11:00 BL18/ 064
Invitation to service providers to submit proposals for acquisition of a service provider to provide project management services to the Enterprise Project Management office for a period of 12 months /or 785 Hours, whichever comes first. 2018-11-19 11:00 CIPC BID NUMBER: 13/ 2018/ 2019
Bethlehem Department of Rural Developement And Land Reform (Drd & Lr): Thabo Mofutsanyane District: Alternative Office Accommodation And Parking Facilities (1994.17m² and 25 Parking Bays) 2018-11-13 11:00 BL18/ 063
For sale of: removal and recycling of cardboard and waste paper 2018-10-26 11:00 ZNQ 64/ 08/ 2018
FICKSBURG: SOUTH AFRICAN SOCIAL SECURITY AGENCY (SASSA): New Office Accommodation and Parking Facilities (561.01m² and 20 Parking Bays) 2018-11-13 11:00 BL18/ 065
Appointment of a service provider at the Independent Communications Authority of South Africa for provision of storage facilities on an 80/20 PPPFA 2000, Preferential Procurement Regulation: 2017 2018-10-26 11:00 ICASA 21/ 2018
Invitation to bidders to submit proposals for the appointment of a group risk insurance/assurance provider for all CIPC employees. 2018-10-22 11:00 CIPC BID NUMBER: 17/ 2018/ 2019
Invitation for an open tender for the Supply of Telephone Management System and Maintenance of Voice Over Internet Protocol (VOIP) At Aidc’s Multiple Sites 2018-11-15 11:00 AIDC T10/ 2018
Staff lockers (ABS Plastic) 3 tier x40 2018-10-30 11:00 ZNQ 744/ 18
Request for proposal for air quality monitoring in The Coega Special Economic Zone (SEZ). 2018-11-12 12:00 CDC/ 446/ 18
Fridge tags 2018-10-31 11:00 ZNQ: 303 / 2018/ 19
Construction of Sidewalks on P483 in the Amajuba District. Tenderers must be registered as 3CE with the CIDB ,Department of Transport’s Vukuzakhe Emerging Contractors Database and also be registered with the National Treasury’s Centralized Supplier Database (CSD).Target designated group: Women. The duration of the project will be stipulated in the tender document. 2018-11-15 11:00 C253/ 1819/ SW/ 561
Construction of Sidewalks on P41 in the Amajuba District. Tenderers must be registered as 3CE with the CIDB ,Department of Transport’s Vukuzakhe Emerging Contractors Database and also be registered with the National Treasury’s Centralized Supplier Database (CSD).Target designated group: Open. The duration of the project will be stipulated in the tender document. 2018-11-15 11:00 C253/ 1819/ SW/ 563

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Advantages and disadvantages of Consortiums

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.

Consortiums Advantages:

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