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.
Request for sector development and implementation plan to support sustainable veterinary pharmaceutical industry development in South Africa 2019-03-11 12:00 T02/02/19
Department of Science and Technology: Appointment of a service provider to pilot Bio-cultural Community Protocol in Mpumalanga Province 2019-03-04 13:00 RFQ-0000063
Invitation for project tenders (Phase 1): The Uniting Reformed Church Atteridgeville - Alterations and additions to existing church buildings on Erf 1088 no. 19 Matseke Street 2019-03-12 12:00 No reference supplied
Insurance for Msukaligwa Local Municipality for a period of three (3) years. 2019-03-18 11:00 8/3 27/2018
Maintenance of highmast lights: as and when required for the period ending 30 June 2019. 2019-03-18 11:00 8/3 26/2018
Repairing of open kiosk/mini-sub/ pole mounted transformers: as and when required for the period ending 30 June 2019. 2019-03-18 11:00 8/3 25/2018
Service provider that specializes on 11kv substation protection scheme for the following substations: 11kv main substation_13 panels Wesselton main substation_7 panels Kwazanele main substation_4 panels Breyten main_3 panels 2019-03-18 11:00 8/3 24/2018
Repairs and servicing of emergency vehicles in the municipal fire and rescue fleet for a period of three (3) years commencing 1 February 2019 to 28 February 2022. 2019-03-18 11:00 8/3 23/2018
Replacement of copper overhead lines: as and when required for the period ending 30 June 2019. 2019-03-13 11:00 8/3 22/2018
Provision of an electronic document management system at GMM for 36 months 2019-03-15 12:00 8/3/1-05/2019
Upgrading of the Rooikoppen Sewer 2019-03-08 12:00 DTS 11/2018/2019
Supply, delivery of material to site, installation and commissioning of energy efficient lighting for high masts within Lekwa Local Municipality 2019-03-08 12:00 DTS 10/2018/2019
Construction of Workshop at Jouberton Campus 2019-03-01 11:00 No reference number
Department of Science and Technology Illumination Assessment 2018-2019 2019-03-04 13:00 RFQ-0000062
Provision of security services 2019-02-28 12:30 08/2/16/57
Panel of two (2) Service providers for Supply and delivery of protective clothing for a period of 36 months(as and when required) 2019-03-01 11:00 LNM071/2018/19
Printing and folding of municipal monthly statements for a period of 36 months 2019-03-01 11:00 LNM067/2018/19
Supply and delivery of ICT equipment 2019-02-26 11:00 LNM050/2018/19
Professional Service provider for licensing of municipal borrow Pits 2019-02-26 11:00 LNM056/2018/19
Professional Service provider for review of environment management plan 2019-02-26 11:00 LNM055/2018/19

Pages

Tender Knowledge

By Werner van Rooyen

www.howtotender.co.za

31 January 2019

Sometimes I am surprised at how little business people in South Africa know about Tenders and the Tender Process. Simple things like terminology and general tender information are difficult for people to comprehend not to mention the Standard Bidding Documents and Tender Pricing.

Unbelievably there are still Entrepreneurs that thinks to respond to tenders are an actual business? You will find that these Entrepreneurs would... Read More

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