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, delivery and installation of photocopiers at Electoral Commission [IEC] Local Offices, South Africa 2017-08-11 11:00 0010359775
Supply, delivery and installation of office furniture - Electoral Commission Local Offices throughout South Africa 2017-08-11 11:00 0010360455
Bandages - Adhesive Plaster - Size: 50mm X 4.5mt Long. as per specification 2017-08-01 11:00 ZNQ 538/ 17 - 18 GAZ
Bandages - Plaster of Paris - Size: 200mm X 3.5mt. as per specification 2017-08-01 11:00 ZNQ 536/ 17 - 18 GAZ
Bandages - Crepe - Size: 100mm X 4.5mt. as per specification 2017-08-01 11:00 ZNQ 534/ 17 - 18 GAZ
Bladeless Atraumatic Trocar With Stability Sleeve - Size: 12mm 2017-08-01 11:00 ZNQ 531/ 17 - 18 GAZ
Karman Cannulae with Adaptor 2017-08-01 11:00 ZNQ 529/ 17 - 18 GAZ
Linear Cutter - 75mm. 2017-08-01 11:00 ZNQ 521/ 17 - 18 GAZ
Adhesive Dressing - Absorbent/ Water Proof / Fluid - Size 25cm X 10cm 2017-08-01 11:00 ZNQ 520/ 17 - 18 GAZ
Laproscopic Reload - Sterile - Latex Free as per specification 2017-08-01 11:00 ZNQ 530/ 17 - 18 GAZ
Neonatal Splint - Size: +- 8 to 9 Cm in Length and 2.5cm to 3cm Wide as per specification 2017-08-01 11:00 ZNQ 526/ 17 - 18 GAZ
Ultrasonic Dissecting Instrument (Focus) as per specification 2017-08-01 11:00 ZNQ 525/ 17 - 18 GAZ
Atraumatic Graspers - 5mm - Length 36cm - Reusable 2017-08-01 11:00 ZNQ 524/ 17 - 18 GAZ
Curved Cutter / Stapler - Size: 3.0mm Length X 3.5mm Height 2017-08-01 11:00 ZNQ 523/ 17 - 18 GAZ
Modified Bipolar Vessel Sealing Device, Single Use -Small Jaw. as per Specification 2017-08-01 11:00 ZNQ 522/ 17 - 18 GAZ
Tubing, Latex (205) as per specification 2017-08-01 11:00 ZNQ 398/ 17 - 18 GAZ
Ligasure Impact Tissue Fusion - Open Instrument - Size: 13.5mm. as per specification 2017-08-01 11:00 ZNQ 355/ 17 - 18 GAZ
Catheter - Argyle - 40cm - Size 22g, as per specification 2017-08-01 11:00 ZNQ 299/ 17 - 18 GAZ
Patient Plate With Cable - Single Use. as per specification 2017-08-01 11:00 ZNQ 208/ 17 - 18 GAZ
Auto Suture Gia Premium 50mm X 3.8mm Loading Unit as per specification 2017-08-01 11:00 ZNQ 95/ 17 - 18 GAZ

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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