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.
Supply and Delivery Of Ultra TEV Plus Accesories 2020-02-21 11:00 None
Provision of security services for Majuba Rail Project 2020-03-17 10:00 MPPPSC001151
Repair and Maintenance of UPS 2020-02-21 11:00 None
Supply and Delivery of Contactor Sl 80a 3 Phase Ac3 2020-02-24 11:00 11367702
Provision of Internal Audit Services for a three (3) year period, renewable up to five (5) years based on performance - (Re-advertisement) 2020-02-28 14:00 BID-PAC/IA/2020
Supply & Delivery of Line Taps 2020-02-24 11:00 11353412/11278642
Maintenance of Dry Keep Units 2020-02-24 11:00 11365696
Quotation for the Renewal of Enterprise Risk Management Software License 2020-02-26 11:00 KCDM/Quote/06/2020
Supply and Delivery of Pecu Nema Type 1800va Fail On (6279) 2020-02-24 11:00 11416769
Tenders are invited for the Printing Of Driver's Licence Application Forms. 2020-02-22 11:00 GQ02202433
Provision of Cleaning and Gardening Services at Leeuhof, Vereeniging, Bijlkor and Meyerton for the period of twenty four (24) months Place where Goods, Works or Services are required: Leeuhof, Vereeniging, Bijlkor and Meyerton. 2020-03-10 10:00 RFP HOAC-HO-31331
Supply & Delivery Of 315mm Dia Class 12 Socketed Upvc Pipe In 6m Lengths 2020-02-27 11:00 GQ02202434
Supply & Delivery Of 250mm Dia Class 9 Socketed Upvc Pipe In 6m Lengths. 2020-02-27 11:00 GQ02202434
RFQ for the supply and delivery of office furniture at various Transnet Freight Rail offices 2020-03-05 10:00 CRAC-JHB-32375
Supply & Delivery Of 315mm Upvc Class 16 Repair Coupling. (Double Or Kimberley Socket. 2020-02-27 11:00 GQ02202435
Supply & Delivery Of 315mm Class 16 Avk Or Similar Socketed Rsv Gate Valve, Fbe Coated, Cap/Top Left Hand Closing. 2020-02-27 11:00 GQ02202435
Supply & Delivery of Floor Polishers 2020-02-25 11:00 0490551 / 1726853 / 1726852
Tenders are invited for the Clearing of Bush Areas as per Specifications and Map available from SCM Offices, Harrower Rd , North End , PE. 2020-02-26 11:00 CSQ02201913
Tenders are invited for the Clearing of Bush Areas as per Specifications and Map available from SCM Offices, Harrower Rd , North End , PE 2020-02-26 11:00 CSQ02201913
Tenders are invited for the Clearing of Bush Areas as per Specifications and Map available from SCM Offices, Harrower Rd , North End , PE. 2020-02-26 11:00 CSQ02201913

Pages

Free Keyword search

Search all tender notices for FREE!

No subscription or registration required!

You can also search by the reference of the the tender.

Advanced search

Search by Issuer, Region or Sector, individually, or using any combination of the three.