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 RAF hereby invites Service Providers for the Rental Of Scanners, Installation, Maintenance and Support for RAF Offices for a Period of three (3) Years 2020-11-25 11:00 RAF 2020/ 00016
Appointment of Accredited Training Service Providers To Manage The Implementation of The Chefs Training Programme on Professional Cookery in the North West, Free State and Northern Cape Provinces for 300 Unemployed and Retrenched Youth 2020-11-13 11:00 NDT0007/ 20
Appointment of Accredited Training Service Providers to Manage the Implementation of the Wine Making Youth Programme in the Two Provinces of KZN and WC For 252 Unemployed And Retrenched Youth. 2020-11-17 11:00 NDT0009/ 20
Supply, delivery, installation, commissioning and configuration of an high performance computing (HPC) solution for the NICD. 2020-11-13 11:00 RFB 102/ 19/ 20
Security Service at Fabian and Florence Ribero Treatment Centre 2020-11-13 11:00 GT/ GDSD/ 053/ 2020
Request to purchase 13 laptops at North Coast Region, Ulundi Contract period: 30 days. 2020-11-23 11:00 ZNQ 20/ 21/ 0010/ NCR
Security Service at Emmasdal Child and Youth Care Centre 2020-11-13 11:00 GT/ GDSD/ 052/ 2020
Appointment of service provider to assist the Department of Small Business Development with conducting a longitudinal study on SMMEs and Co-operatives within South Africa covering the period 2021-2024 2020-11-20 11:00 DSBD Research 002/ 2020
DPW : DMRS : DOD Lenasia : Lenz Miltary Base : Replacement and Ugrade of Civil Engineering Services 2020-11-12 11:00 JHB 20/ 04
Appointment of a Panel of Attorneys to Render Debt Management Services to the Department Of Health For A Period Of 3 Year Adhoc Contract. 2020-11-16 11:00 ZNB 5128/ 2020- H
Supply, Delivery, Installation and Commissioning of Horizontal Bedhead system services for Dora Nginza Regional Hospital 2020-11-20 11:00 SCMU3- 20/ 21- 0181- DNG
Request for proposals for the supply and delivery of mobile communication services to the state for a period of 60 months (5 years) 2020-11-27 11:00 RT15
Virkons Disinfectant (10 kg x 5) 2020-11-06 11:00 RFQ 000412
Supply and deliver of concrete ready mix concrete at Mzimvubu water project – access road for construction east near Maclear in the Eastern Cape Province for a period of 12 months 2020-11-20 11:00 DWS12- 1020 WTE
Procurement of 11,5 % sodium hypochlorite (Must be in blue cans) 10 x 25 litres 2020-11-06 11:00 RFQ 000411
Appointment of a Service Provider to repair the roof & infrastructure for the Hamburg Aquaculture Project facility, situated in Hamburg, Eastern Cape. Repair infrastructure for the following: Office space; Boardroom; Laboratory; Aquaculture products packing room and Ablution facilities 2020-11-06 11:00 RFQ 000410
Hach DR 6000 spectrophotometer annual calibration, servicing and repairs (currently switches on but does not allow for testing).; Hach DR 900 colorimeter annual calibration and servicing x2; Hach HQ40D probe annual calibration and servicing x 2; Hach LDO rugged probe annual calibration, servicing and replacement sensor; Hach pH rugged probe annual calibration and servicing; Hach CDC410 laboratory probe annual calibration and servicing; Hach pH/ Conductivity Pocket Pro 2 annual calibration, servicing and replacement sensor; Hach Conductivity Pocket Pro annual calibration, servicing and replacement sensor 2020-11-06 11:00 RFQ 000409
Appointment of a service provider to procure maintenance tools and accessories for the South African Nursing Council. 2020-11-11 11:30 RFQ 41/2020
To Appoint The Suitable Service Provider To Render Project Management Services to the Department Of Environment, Forest and Fisheries to Remove And/Or Clear Illegal Dumping and Cleaning Streets In Matjhabeng Local Municipality Over A Period Of Twenty Four (24) Months. 2020-11-13 11:00 E 1582
Supply & delivery of cleaning material to National dept of Public Works & Infrastructure, Cape Town Regional Office ( 24 months) 2020-11-13 11:00 CPTSC14/ 20

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Who is the bidder or his or her representative?

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

In Organ of State tenders, the Standard Bidding Document 4 – Declaration of Inters – ask in paragraph 2.1 the following: “Full name of bidder or his or her representative... Read More

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