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.
After service repairs to Infra Red Scanning and Distribution board as per report. 2018-05-02 11:00 ZNQ 20/ 18
The Provision of Local Radiation Protection Monitors to support Outages, Projects and on an as and when required basis. 2018-05-22 10:00 KBG1845
Supply, Install, Commissioning of Tools, Equipments and Machinery for the Plumbing Workshop. 2018-05-23 11:00 EEC/ T05/ 2018
Remove damaged theatre light head and replace with new theatre light head of the same specification x 01 unit 2018-05-01 11:00 ZNQ 04/ 04/ 2018
Rendering of a Cleaning Service at Swellendam District Hospital Which Includes Swellendam Clinic, Otto Du Plessis District Hospital and Bredasdorp Clinics, Department of Health, Western Cape Government for a three (3) year period 2018-05-18 11:00 WCGHSC0149/ 2018
Supply and Delivery of Bogies at Transnet Engineering in Koedoespoort at Coaches Business. 2018-05-22 10:00 TE18-KDS-18Z-02865
Rendering of a Telephonic Interpretation Service for the Department Of Health, Western Cape Government for a two (2)year period 2018-05-22 11:00 WCGHSC0146/ 2018
Supply and Delivery of Drawbar for Transnet Engineering Koedoespoort in Coaches Business. 2018-05-22 10:00 TE18-KDS-18Z-02866
Annual service to domestic hot water supply as per attached specification 2018-04-27 11:00 ZNQ 06 / 18 / 19
Major Service to Medical Gas Plant as per attahed specification 2018-04-27 11:00 ZNQ 17 / 18 / 19
Major service to air-conditions for all clinic under Bethesda Hospital as per attached specification 2018-04-27 11:00 ZNQ 24 / 18 / 19
Design, develop and implement the Data Platform together with Transnet Engineering R&D. 2018-05-22 10:00 TE18-KDS-8DV-02926
Annual Service to Fire Equipment for all Clinics Under Bethesda Hospital as per attahed specification 2018-04-27 11:00 ZNQ 10 / 18 / 19
Service of UPS for hospital as per attached specification 2018-04-27 11:00 ZNQ 12 / 18 / 19
Annual service to Lillipud Plant at Ophansi Clinics under Bethesda Hospital as per attached specification 2018-04-27 11:00 ZNQ 15 / 18 / 19
Annual service to ventilation as per attached specification 2018-04-27 11:00 ZNQ 22 / 18 / 19
Annual service to swimming pool as per attached specification 2018-04-27 11:00 ZNQ 05 / 18 / 19
For the design, fabrication, supply, delivery, installation, testing and commissioning of tapping points on the Boiler and Turbine Plant of Unit 4 and 6 at Duvha Power Station. 2018-05-23 10:00 MPPPSC001078R
Service of UPS for all Clinics Under Bethesda Hospital as per attahed specification 2018-04-27 11:00 ZNQ 11 / 18 / 19
Major service to refrigeration for all clinics under Bethesda Hospital as per attached specification 2018-04-27 11:00 ZNQ 26 / 18 / 19

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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