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.
Bloemfontein Deeds Office: Maintenance of Fire Protection System 2018-09-11 11:00 BL18/ 039
Ndpw: Security Guarding Services at the Regional Office for 7,9, 10th Floor and D Parking 2018-09-07 11:00 NST18/ 028
Servicing of stand-by generator 2018-08-24 11:00 ZNQ59/ 18/ 19
Appointment of a service provider to provide Information Communication Technology (ICT). 2018-09-17 11:00 FB SETA (17- 18) T0002
Servicing of autoclave machine 2018-08-24 11:00 ZNQ60/ 18/ 19
Witbank Prison Wastewater Treatment Works: 12 Months Operation and Scheduled Maintenance. 2018-09-07 11:00 NST18/ 027
The Financial Intelligence Centre request for proposals from service providers for IT Solution Architecture and Consulting Services for a maximum of thirty six (36) months. 2018-09-07 11:00 FIC/ RFB/ CARA/ 0011/ 2018/ 19
Terms of Reference for the appointment of a service provider for the ETDP SETA’s Business process analysis services. 2018-09-11 11:00 SCMU: 10 - 2018/ 19
Servicing of boiler room 2018-08-24 11:00 ZNQ57/ 18/ 19
Terms of Reference for the appointment of a service provider for a video conferencing solution for the ETDP SETA 2018-09-11 11:00 SCMU: 11 - 2018/ 19
Zonstraal Military Base Oxidation Ponds: 12 Months Operation and Scheduled Maintenance 2018-09-07 11:00 NST18/ 026
N.G Dlukulu clinic, Grahamstown, Makana Local Municipality, Sarah Baartman District: Renovations and Extensions. 2018-09-17 11:00 SCMU3- 18/ 19- 0264- HO
Appointment of experienced and reputable service provider to partner with Tshabo community on snail farming for a period of 24 (twenty-four) months. 2018-09-17 11:00 SCMU 04 - 2018/19:
Middle Terrace and Virginia Shumane Clinics Grahamstown, Makana Local Municipality, Sarah Baartman District: Renovations and Extensions 2018-09-17 11:00 SCMU3- 18/ 19- 0265- HO
Appointment of a Service Provider to Develop and Administer a Consumer Credit Readiness Initiative 2018-09-14 11:00 HS 04/ 2018/ 2019
Dube TradePort invites proposals from suitably qualified, experienced and accredited water testing laboratories to provide water testing services for a period of three (3) years. 2018-09-14 11:00 DTP/ RFP/ 11/ AGZ/ 06/ 2018
False Bay TVET College invites bids for Westlake Site Centre of Specialisation - New Fitting & Turning Training Centre: Repairs & Renovations to Existing Infrastructure 2018-09-07 11:00 FBC T10/ 2018
National Institute for the Humanities and Social Sciences (NIHSS) Invites Suitably Qualified Service Providers to Provide The Insitute with the Office Accomodation 2018-09-24 12:00 NIHSS/ OFFICE- 01/ 2018
Dube TradePort invites proposals from suitably qualified, experienced and independent professional service provider to support the fibre network for a period of three (3) years. 2018-09-14 11:00 DTP/ RFP/ 12/ ICT/ 06/ 2018
DTPC invites proposals from suitably qualified, experienced and independent professional service providers to provide technical services in the acquisition of projects in the Mechanical Engineering and maintenance field for its Bid Specification Committee (BSC) and Bid Evaluation Committee (BEC). 2018-09-14 11:00 DTP/ RFP/ 15/ CEO/ 07/ 2018

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