Issue Date: 
Monday, August 1, 2016

Sub-contractors versus Consortiums and Joint Ventures

The Preferential Procurement Regulations, 2017 states that 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.

In order to help with the confusion that arises from whether or not 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 generally 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 in order to win a specific contract for a set period of time. 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.

In order 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 please attend one of our How-to-Tender workshops. For more information on the tender courses please email Werner at werner@how2tender.com.

This article was written by Werner van Rooyen, Director of HowToTender (Pty) Ltd. which specializes in tender consulting and tender training.

Title Closing Date Tender No.
VMWare Software 2019-04-05 12:30 10401236
Checkpoint 2019-04-05 11:00 10401237
Hire of suitable furnished residential accommodation:15x1 bedroomed flat/apartments plus 15 secure on site-parking bays at Eshowe Hospital, Eshowe: Department of Health 2019-04-15 11:00 ZNT 7860 W
Saldanha: Military Base: Construction of new sick bay facility 2019-04-17 11:00 CPT1019/ 18
Presidential Inauguration: Provision of Stage, Sound, Big Screen and Related Infrastructure at Loftus Versfeld Stadium Functionality Criteria 2019-04-09 11:00 HP18/ 016GS
Pretoria: Procurement of Office Accommodation of 563.64 square meters and 19 parking bays usage by the Department of Science and Technology (National Advisory Council on Innovation) for a period of 3 years preferably in Lynwood, Sciencia Park 2019-04-09 11:00 Pt18/ 083
Remedy 2019-04-05 11:30 10401239
Pretoria: Procurement of Office Accommodation of 563.64 square meters and 19 parking bays usage by the Department of Science and Technology (National Intellectual Property Management Office) for a period of 3 years preferably in Lynwood, Sciencia Park 2019-04-09 11:00 Pt18/ 084
Bid for the Appointment of a Service Provider for the Provision of Cleaning and Hygiene Services to the Deaprtment of Labour Head Office for a period of two years 2019-04-12 11:00 BID LAB 01/ 2019
Provision of Cleaning Services at Mthatha Medical Depot 2019-04-12 11:00 SCMU3- 19/ 20- 0018- HO
Appointment of a Service Provider to Quantify Asbestos Fibres in Different Environmental Samples for a period of three (3) years 2019-04-16 11:00 CGS- 2018- 057A
Procurement of a Grade B Building for Ceta Academy 2019-04-08 11:00 010- 2018/ 2019
Preferred Service Providers for Technical Services (Roads & Civil Works) For Coega Development Corporation (Pty) Ltd 2019-04-08 12:00 CDC/ 68/ 19
Registration on New loveLife Trust Supplier Database 2019-04-12 12:00 No reference number
Preferred Service Providers for Technical Services (Aluminum Doors) For Coega Development Corporation (Pty) Ltd 2019-04-08 12:00 CDC/ 114/ 19
Preferred Service Providers for Technical Services (Signage - Road Side Signage) For Coega Development Corporation (Pty) Ltd 2019-04-08 12:00 CDC/ 116/ 19
Preferred Service Providers For Technical Services (Canteen Equipment Maintenance) For Coega Development Corporation (Pty) Ltd 2019-04-08 12:00 CDC/ 117/ 19
Preferred Service Providers For Technical Services (Fire Equipment) For Coega Development Corporation (Pty) Ltd 2019-04-08 12:00 CDC/ 120/ 19
Preferred Service Providers For Technical Services (Roof Specialist) For Coega Development Corporation (Pty) Ltd 2019-04-08 12:00 CDC/ 121/ 19
Preferred Service Providers for Technical Services (Fencing) for Coega Development Corporation (Pty) Ltd 2019-04-08 12:00 CDC/ 123/ 19

Pages

Extension of validity period

By Werner van Rooyen

www.howtotender.co.za

31 January 2019

Those of you who are familiar with responding to tenders will know that it is common practice for procuring entities to extend the bid price validity period. We received the undermentioned queries regarding the extension of the validity period of the bid price.

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