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.
Data Centre Maintenance and Repairs of Air Conditioning System 2017-12-07 11:00 RFP 129
Appointment of a service provider for assessment and valuation of the Legacy Rehabilitation liability cost 2017-12-08 11:00 ALEX RFP 4/2017/2018
Design, Provision and Management of a Wide Area Network for the Eden District Municipality 2017-12-08 11:00 E/04/17-18
Repair to Infrastructure in Tergniet – Stairs at Tidal Pool Kus Road 2017-12-08 12:00 49-17/18
Supply and delivery of tyres (one year contract). 2017-12-08 12:00 SCM/INFR13/2017/2018
Supply and Delivery of a Grader 2017-12-08 12:00 SCM/INFR12/2017/2018
Compilation of the 2017/2018 GRAP Compliant Financial Statements 2017-11-23 13:45 SCM/FS06/201/2018
Port Engineering - Smart Peoples Port Study 2017-12-12 12:00 PEH 135/VB
Port Engineering - Dredging of Small Craft Areas 2017-12-12 12:00 PEH 134/VB
Appointment of a suitable service provider for the training of 25 beneficiaries in basic bookeeping for a period of 12 months 2017-11-29 11:00 7Z - 35406
The construction of 50 sow piggery for Intandela multipurpose and project cooperative at Goodhome under Ntabamhlophe area in ward 14 of Inkosi Langalibalele Local Municipality under Uthukela District Municipality in the Kwazulu-Natal province 2017-12-14 11:00 SS-KZN 7/1/6/3 (642) 000R
Implementation of GRAP 12;16 and 17 assets register for a period of a period of three years 2018-01-02 12:00 SCM/FS05/2017/2018
Construction of Sewer Lines Tarka Mossel Bay 2018-01-12 12:00 45-17/18
Construction of the extension of Taung library 2018-01-02 12:00 SCM/SS06/2017/2018
Supply and delivery of Safety Clothing for the Langeberg Municipality, for the Period of 3 Consecutive Years 2017-12-08 12:00 T 32/2017
The Supply and delivery of 7 x Sealing End 132kv 400SQ CU of D2872 2018-01-23 13:00 DX 756
Supply, delivery and installation of Sewer Pumps Mandela Square Montagu 2017-12-01 12:00 TE 87/2017
Supply: Guard rail 2017-11-27 14:00 GE11800781
Supply Water distribution material 2017-11-30 16:00 GE11800782
Supply Bricks 2017-11-27 14:00 GE11800783

Pages

Functionality and Tenders

In all competitive bids (tenders) you as the bidder will have to respond to Functionality. You will need to score a set minimum number of points, measured as a percentage, on Functionality of a competitive bid (tender) in order to advance to the next phase of evaluation in the tender process.

Usually Organs of State evaluate competitive bids (tenders) as follows:

  • The tender response is evaluated on Functionality where the bidder must score points out of a maximum of 100 points.
  • A threshold of between 65 to 75 out of 100 points... Read More
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