Issue Date: 
Monday, March 31, 2014

Tenders and Local Content

By Werner van Rooyen

www.how2tender.com

31 March 2014

Did you know that the Gauteng Provincial`s target on procurement spent on Local Content is 75%? This can also be said for the National Government`s procurement spent.

That is very good news! It can also be considered that most of the nine Provinces have got the same target. This means that Local Content is a priority to National as well as Provincial Governments, when it comes to their Procurement spent. This is good news for local manufacturers and services providers. Local manufacturers and service providers has at least a 75% change of winning a tender.

But what is the definition of Local Content?

Local Content is Local Value Added in South Africa by South African recourses. Where a tender response contains a combination of local and imported goods and/or services, the tender price must be separated into its local and imported components as per the Standard Bidding Document 6.2 Annexure D and E, summarized in Annexure C. Local Content is total spend less any imported component. Remember that you as suppliers will be contractually required to maintain records to certify imported content, for example, invoice of materials, expenditure records and income statements.

It must be emphasized that when you tender that you ensure you know which goods and/or services you can claim as Local Content. Be aware that certain tenders will exclude cost such as the following from Local Content:

  1. finance charges;
  2. property; and
  3. deployment fees of the operations contractor.

Currently the new B-BBEE Codes of Good Practice that will come into effect on 30 April 2015 strong emphasis is given to Enterprise and Supplier Development, one of the five elements of B-BBEE. This element will count 40 out of the 109 points on the B-BBEE scorecard and this element is all about developing the Local Entrepreneur. This will and must stimulate the manufacturing and producing of Local Content.

The National Government has also introduced designated sectors which are sectors, sub-sectors or industries that have been designated by the Department of Trade and Industry in line with national development and industrial policies for local production, where only locally produced services, works or goods or locally manufactured goods meet the stipulated minimum threshold for local production and content1. If your business enterprise falls into one of these 12 designated sectors then you will have to comply with these minimum thresholds. These designated sectors together with its minimum thresholds can be found at: http://www.dti.gov.za/industrial_development/ip.jsp.

There is an increase in the drive from National as well as Provincial Government to promote Local Content. This drive is not a South African initiative but a world wide trend. In a South African context it is good because it stimulates internal growth of the economy. So next time when you tender consider Local Content as an option.

Local Content and much more tender issues are discussed in our Tender Manual. If you want to know more about the tender process and how to complete a tender correctly and hopefully successfully, please visit our website at www.how2tender.com to find out more.
Until the next time - happy tendering.

Don`t delay, get educated today!

1. Definition of designated Sectors as per SBD document 6.2.

Title Closing Date Tender No.
Supply and deliver 75mm X 45mm Number Decals starting from 0-8 2018-03-05 11:00 GQ02181698
Supply and deliver Oval Decals with a length of approximately 285mm and width of 202mm 2018-03-05 11:00 GQ02181698
African Union research grants: 2018 - open call for proposals 2018-05-22 17:00 HRST/ST/AURG-II/CALL2/2018
Supply and install Inlet and Outlet Pressure Gauges for Inductively coupled Plasma 2018-03-05 11:00 CSQ02181226
Supply and install High Purity Nitrogen Regulator for Inductively coupled Plasma 2018-03-05 11:00 CSQ02181226
Supply fluke tpak toolpak 2018-02-27 12:00 GD11800773
Supply Endress+Hauser Ultrasonic FMU90R22CA161AA1A Flow Meter,and Prosonic Level Sensor FDU91 2018-03-02 12:00 GD11800775
Supply vegawell 52 pressure transmitter 2018-02-27 12:00 GD11800776
Torula yeast,Nature’s choice 500g x 5bottles 2018-03-02 11:00 RFQ 000225
Supply of Precise Leveling equipment 2018-03-02 12:00 GD11800778
Re-Advert - Appointment of a service provider for the supply and implementation of an in-house finance system 2018-03-02 11:00 009- 2017/ 2018
Supply: Battery operated grinder 2018-03-02 12:00 GD11800779
Request for proposals to assist the ARC with the Annual Organizational and 360 degree assessments (Re-advertisement) 2018-03-23 11:00 ARC/ 13/ 09/ 17
Supply and Deliver SS Bracket as per Drawing attached, 3 Core 1mm instrumentation Screen Cable and E+H FDU 92 2018-03-02 12:00 GD11800780
Supply and deliver Cuvettes for Diaspect HB meter 2018-03-09 11:00 H392/ 17/ 18
Supply and deliver Screening OAE with DPOAE 2018-03-09 11:00 H346/ 17/ 18
Supply Comb binder & laminator a4&a3 machine 2018-02-26 11:00 GM11800633
Supply and delivery of firearm spare parts for Heckler and Koch Submachine Guns: to the South African Police Service nationally for a period of two (02) years 2018-03-23 11:00 19/ 1/ 9/ 1/ 46TT (17)
Gauze Swabs Sterile 100x100x8ply -100 Pieces Per Pkt ,40 Pkts Per Case X 100 Cases 2018-03-05 11:00 ZNQ 573/ 17/ 18
Supply, Delivery, Installation, Commissioning and Maintenance of Imaging Radiology Equipment at Various Gauteng Health Institutions for period three (3) years 2018-03-16 11:00 GT/ GDH/ 049/ 2018

Pages

Tender adjudication process

The SBD/WCBD6.1 document must form part of all bids invited.  It contains general information and serves as a claim form for preference points for Broad -Based Black Economic Empowerment (B -BBEE) Status Level of Contribution, and explains how tenders or bids are decided.

The document says:

  • The bidder obtaining the highest number of points will be awarded the contract.
  • Preference points shall be calculated after prices have been brought to a comparative basis.
  • Points scored will be rounded off to two decimal places... Read More
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