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.
The Nelson Mandela Museum (NMM) invites suitably qualified, professional, experienced and competent service providers to render company secretarial services to the council of the NMM and subcommittees for a period of twelve months. 2020-08-24 12:00 RFP- NMM- 2020- 01
Establishment of a government technical advisory centre (GTAC) panel of professional service providers for a period of three (3) years – Batch 3 2020-08-28 11:00 GTAC 003- 2020- 21
Appointment of a service provider to offer training on life skills to graduates for a period of 36 months. (3 years) 2020-08-28 11:00 NRF/ SAASTA HRES/ 01/ 2020- 2021
Consultancy service for the evaluation of the African Union plan of action on drug control and crime prevention (2013-2019) and preparation of continental report on implementation progress in 2019 and 2020 2020-08-28 15:00 No reference number
Appointment of a service provider to offer training on entrepreneurship skills to graduates for a period of 36 months (3 years) 2020-09-04 11:00 NRF/ SAASTA HRES/ 02/ 2020- 2021
Appointment of an extended panel of corporate governance service providers for the National Lotteries Commission for a period of three (3) years with the following capabilities:- - Strategy facilitation, corporate responsibility and sustainability development - Business modeling, actuarial and shared value - Competition and regulatory economics; and - Research and advisory 2020-08-28 11:00 NLC/ 2020- 06
Appointment of a service provider for the provision of off-side storage management services for the National Lotteries Commission for a period of five (5) years 2020-09-07 11:00 NLC/ 2020- 07
Appointment of Attorneys Firms and Legal Practitioners for the establishment of the National Lotteries Commission’s Panel of Attorneys Firms and Legal Practitioners for a period of Twenty Four (24) Months 2020-09-07 11:00 NLC/ 2020- 05
Appointment of a project management company on a turnkey to purchase an existing building as well as provision of space planning, advisory design and refurbishing services of the property according to MHSC specific office requirements. 2020-08-31 11:00 MHSC005/ 2020- 21
Rendering of Private Security Services to the Department of Water and Sanitation Nationally for a period of 36 Months: Main Account and Water Trading Account 2020-09-14 11:00 W11326
KwaZulu-Natal Department of Transport invite service providers for the Provision of Irregular Expenditure Management Support The KwaZulu- Natal Department of Transport is applying pre-qualifying criteria for this bid in terms of Regulation 4 of the PPPFA Regulations, 2017. 2020-09-08 11:00 ZNB0061/ 19T
Appointment of a service provider to conduct a workforce planning and talent management for 11 Gauteng Municipalities through workshops 2020-08-21 13:00 COGTA RFP 04/ 2020
Appointment of a service provider to review, enhance, develop and implement simplified revenue plan model at Emfuleni, Lesedi, Merafong, Randwest, Mogale City and Midvaal Local Municipalities 2020-09-10 11:00 COGTA 21/ 2020
Appointment of a consortium / multi-disciplinary professional service provider/s for the project: Provision of multi disciplinary professional services: District Six Phase 1, 2, 3a & 3b restitution housing project for the Rural Development Branch of the Department of Agriculture, Land Reform & Rural Development in Cape Town, Western Cape. 2020-09-08 11:00 5/ 2/ 2/ 1- CRDP 0001(2020/ 2021)
Invitation to Tender for an off-grid solar system for the entire Savannah Country Estate HOA. 2020-08-21 15:00 No reference number
Appointment of public higher education to conduct research for the implementation of Bankseta’s research agenda. 2020-09-08 11:00 BS/ 2019/ RFB440
Request for Proposals to appoint a panel of Service Providers to assist with the procurement of Research and Laboratory Consumables for a period of three years. 2020-09-11 11:00 ARC/ 03/ 07/ 2020
Welkom Magistrate Office: Rendering of cleaning services for a period of 24 months 2020-09-01 11:00 BL20/ 010
Kroonstad Magistrate Office: Rendering of cleaning services for a period of 24 months 2020-09-01 11:00 BL20/ 009
Appointment of a service provider to render cleaning and hygiene services for the Department of Agriculture Land Reform and Rural Development : Kimberley Deeds Registry for a period of 24 months. 2020-08-28 11:00 DALRRD (CRD- 02) 2020/ 21

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