Issue Date: 
Thursday, October 31, 2019

Sub-contractors versus Consortiums and Joint Ventures

By Werner van Rooyen, Director of HowToTender (Pty) Ltd which specializes in tender consulting and tender training.

The Preferential Procurement Regulations, 2017 states that, if it is feasible, 30% of all Government Contracts above R30 million must be sub-contracted to specific categories of SMME’s.  These SMME’s include, but are not limited to, black female owned and black youth owned businesses.

To help with the confusion that arises from whether one must form a Joint Venture, Consortium or sub-contractor/contractor relationship when responding to a tender it is always good to understand the definition of these types of business relationships:

  • A sub-contractor/contractor relationship arises when a main contractor hires or employs additional businesses or persons outside of the main contractors own business to do work or to deliver services as part of a larger project.  The important thing to remember is that the main contractor is in charge and must ensure that the project is executed and completed as stipulated in the contract.
  • A consortium is an association of two or more individuals, companies, or organisations with the objective of participating in a common activity, such as responding to a tender, or pooling their resources to achieve a common goal.  Within the consortium, each participant retains their separate legal status and the consortium’s control over each participant is limited to activities involving the joint endeavour, particularly the division of profits.  A consortium is formed by contract.
  • A Joint Venture can be described as a business enterprise where two or more participants come together to share their expertise to win a specific contract for a set period.  A Joint Venture is a separate entity and is not part of the individual participant’s own enterprise.  Therefor a Joint Venture must have its own set of rules by which it is managed, and this is called a Joint Venture Agreement.

To become a sub-contractor, you will have to have a running business.  Main contractors will only use dependable sub-contractors with a proven track record.

To learn more about this and many other tender conditions attend our “Become a Tender Expert” 2-Day workshops presented in Johannesburg, Pretoria, Durban, Port Elizabeth, and Cape Town.  Book and pay online at https://howtotender.co.za/tender-expert-form/

Contact us at wernervr@howtotender.co.za should you require more information.

You can also purchase a Tender Manual (Handbook) on our website https://howtotender.co.za/ which is a step by step guide how to respond to a South African Tender.  It includes examples of completed SBD forms.

Title Closing Date Tender No.
Appointment of a service provider for the cycling cutting of grass at various sport facilities, as and when required, for a period of three years from date of appointment 2021-04-05 12:00 COM004/2021
Supply and delivery of hypodermic syringes, needles, and bloodletting devices to the state for the period ending 31 October 2022 2021-03-10 11:00 RT284-2-2019
Supply, Delivery and Installation of Autoclave and Steam Generator Equipment 2021-03-24 11:00 SAMRC/PUDAC-SDIA&SGE/2020/15
Appointment of service provider to Supply, delivery and offloading of 2021 Personal Protective Equipment (PPE) for KSD TVET College as a when required basis for a period of three years. 2021-03-31 11:00 KSDTVET2021/003
Supply and delivery of non-contracted medical & surgical items: cold chain equipment (WHO qualified) and infrastructure for the storage of vaccines to the Department of Health for a 3 year period 2021-03-19 11:00 SCMU3-20/21-0270-HO
Request of Information (RFI) and Industry Specification meeting for Radiological and Imaging Equipments. 2021-03-19 16:00 RFI2021-SP01
Occupational medical practitioners for a period of (12) months part – time 2021-03-17 12:00 UMN 03/2021
Operation and maintenance of the George swimming pool, as and when required, for a period of three (3) years, from date of appointment 2021-04-05 12:00 COM003/2021
Request for Expressions of Interest: Individual consultancy services for a skills gap anaysis /capacity need assessment expert at APRM continental offices, South Africa. 2021-03-18 11:00 APRM /EOI/IC/ 19/2021
Appointment of a Service Provider for the Leasing and Maintenance of Copier Machines for a period of 36 months 2021-04-06 12:00 EPMLM/8/3/384
Replace, Repair & Restore Vandalised Electrical Supply at Signal Equipment Room 2021-03-16 10:00 10321687
Appointment of a service provider to perform an external quality assessment review of the Department of Environment, Forestry And Fisheries’ internal audit activity for a period of three (3) months 2021-04-16 11:00 Q-155-20-21
Upgrading of the Riversdale Wastewater Treatment Works: Phase 3 mechanical and electrical related works 2021-04-09 12:00 HES-TECH 33/2021
Supply and Deliver gardening equipment 2021-03-05 11:00 R-S-2021-1909
Rehabilitation Ga Sekororo Road Boq Rev3 Summary 2021-03-12 11:00 MLM/SCM/39/2020
Request For Proposal for an alternative design/solution to the current non-functional eternal flame at Freedom Park 2021-03-23 11:00 RFQ14544
Provision of catering services at Transnet/Safa School of Excellence 2021-03-19 12:00 GSM/21/02/2066
Organising, supervising and management for the development of parks and recreational areas on cleaned up selected illegal waste dumping site and under power lines within the Sharpeville area 2021-03-26 10:00 CORP5311
Appointment of preferred Service Provider for the supply of One 72 MHz C-band Space Segment Capacity for a period of Five (5) years 2021-04-01 12:00 SENT/041/2020-21
Supply and Delivery of Water and Waste Infrastructure Maintenance Materials 2021-03-26 11:00 INF-O&M58/2020/2021

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