Issue Date: 
Monday, April 25, 2016

Tenders and Subcontracting

Tenders and subcontracting go hand in hand. In fact, subcontracting part of a tender is so commonly placed that in South Africa there are specific rules regulating subcontracting in executing tenders. This is especially true for South African Government tenders.

According to Investopedia subcontracting is the practice of assigning part of the obligations and tasks under a contract to another party known as a subcontractor. Subcontracting is especially prevalent in areas where complex projects are the norm, such as construction and information technology. Subcontractors are hired by the project's general contractor, who continues to have overall responsibility for project completion and execution within its stipulated parameters and deadlines.
It is very important to know that in South Africa there is one major rule when it comes to subcontracting if awarded a Government tender. 

According to the Preferential Procurement Regulations, 2017:

  • Section 6(5) states that a person must not be awarded points for B-BBEE status level if it is indicated in the tender documents that such a bidder intends sub-contracting more than 25% of the value of the contract to any other enterprise that does not qualify for at least the points that such a tenderer qualifies for, unless the intended subcontractor is an exempted micro enterprise that has the capability and ability to execute the sub-contract.

This sub-section of the Preferential Procurement Regulations, 2017clearly indicate that you cannot subcontract more than 25% of the contract value to another party if that party does not have at least the same B-BBEE Status Level as you or a better B-BBEE Status Level than you. The Office of the Chief Procurement Officer is on the lookout for discrepancies like this. If you are in contravention of these regulations you stand the change that the contract may not be awarded to you or that your existing contract can be cancelled. You can also be liable for costs incurred by the Government Entity in executing the contract.

If you are going to subcontract less than 25% of the value of the contract you are save and you don't have to worry about the B-BBEE Status Level of the subcontractor.

Subcontracting don't need to be difficult but if you want to know more about subcontracting and other important tender response information we suggest you attend our How-to-Tender workshops that we present Country wide. Please email us at werner@how2tender.com should you be interested in attending one of these workshops.
 
Learn to earn

Title Closing Date Tender No.
Placement or Outright purchase of Dried Blood Spot punch Analyser NICD HIV Sero-Molecular Laboratory for a period of three years 2018-10-15 11:00 RFB080/ 18/ 19
Westcol hereby invite bids from established, registered providers to provide physical security services (guards) to one or more of the following Westcol campuses for a period of 24 months. Krugersdorp; Krugersdorp West; Randfontein; Magaliesburg; Carletonville. 2018-10-12 10:00 WT 2018/ 0003
Placement or Outright Purchase of Film Coverslipper Analyser for NHLS Braamfontein, Doctor Goerge Mukhari Hospital, Chris Hani Baragwanath Hospital and Nioh For a period of three years 2018-10-15 11:00 RFB081/ 18/ 19
Phuthaditjhaba Magistrate Office: Rendering Of Cleaning Services For 24 Months. 2018-10-16 11:00 BL18/ 061
Rendering of travel agency services to the Department of Social Development (excluding MEC & HOD),for a period of 36 months. 2018-10-05 11:00 NC/ SOC/ 013/ 2018
Supply , Delivery and Off-loading of Perishable Provisions for Thohoyandou and Polokwane management areas ( Limpopo Province) 2018-11-06 11:00 LMN 06/ 2018 LIMPOPO
Appointment of service providers to implement The Animal and Veld Management Programme (AVMP) Soil Rehabilitation Projects in Spitskop and Zandmartinsdrift Land Reform Farms in the Edinburg area in Kopanong Local Municipality within Xhariep District Municipality as well as in De Hoop Land Reform Farm in the Bloemfontein area within Mangaung Metro Municipality in the Free State province. 2018-10-05 11:00 PSSC- RID- FS 0004 (2018/ 2019)
Supply, Delivery and Off-loading of Perishable Provisions at Klerksdorp, Rooigrond and Rustenburg Management Areas (North -West Province) 2018-11-06 11:00 LMN 04/ 2018 NORTH - WEST
Appointment of service providers to implement The Animal and Veld Management Programme (AVMP) Soil Rehabilitation Project in Rietfontein Land Reform Farm in the Soutpan area in Masilonyana Local Municipality within Lejweleputswa District Municipality in the Free State province. 2018-10-05 11:00 PSSC- RID- FS 0003 (2018/ 2019)
Supply , Delivery and Off-loading of Perishable Provisions at Barberton ,Bethal and Witbank management areas( Mpumalanga Province) 2018-11-06 11:00 LMN 05/ 2018 MPUMALANGA
Appointment of a service provider to render security guarding services at the Department of Public Service and Administration for a period of two (2) years. 2018-10-12 11:00 DPSA002/ 2018
Provision of Geographical Information Solution (GIS) including maintenance and support services. 2018-10-24 11:00 RFP 29/ 2018
6000 units of emollient bp cream with chlorocresol 500g, or equivalent 2018-10-08 11:00 ZnqLS443/ 18gaz
Butterworth Magistrate: Repairs & Servicing of Air-Conditioners. 2018-10-11 11:00 MTH 59/ 2018
36 units of Dextran 40, 10% in sodium chloride injection iv solution, 0.9% 500ml (Rheomacrodex), or equivalent 2018-10-08 11:00 ZnqLS442/ 18gaz
Drain cleaning and verge maintenance on Road P242, from 0.00KM TO 9.9KM. 2018-09-27 11:00 ZNT373T/ 2/ 4/ CDUR/ 601/ S/ 10/ 2018- 19
Drain cleaning and verge maintenance on main road P100 section 1&2 between chainage 0.00KM to chainage 14.5KM. 2018-09-27 11:00 ZNT373T/ 2/ 4/ CDUR/ 601/ S/ 05/ 2018- 19
Supply and Delivery of Dairy products and Maize Drink to the Gauteng Provincial Government (GPG) Departments and State Information Technology Agency (SITA) for a period of 36 months 2018-10-12 11:00 GT/ GPT/ 126/ 2018
Betterment and graveling on road D755 from KM 1.80 TO KM 2.80. 2018-09-27 11:00 CDUR/ 620/ S/ 03/ 2018
Supply and Delivery of Self-Adhesive Pharmaceutical Labels to all Hospitals/Institutions under the control of the Department of Health, Western Cape Government for a period of three (3) years 2018-10-19 11:00 WCGHSC0168/ 2018

Pages

Advantages and disadvantages of Consortiums

Consortiums are often considered as entities to use when responding to tenders in South Africa. The question that arises is whether to use a Consortium or a Joint Venture when responding to a tender. To help you with this we have compiled a list of advantages and disadvantages for both Consortiums as well as Joint Ventures. In this article we list the advantages and disadvantages of Consortiums. Look out for the same article on Joint Ventures.

Consortiums Advantages:

  • Easy to establish as there are no formal procedures... Read More
Free Keyword search

Search all tender notices for FREE!

No subscription or registration required!

You can also search by the reference of the the tender.

Advanced search

Search by Issuer, Region or Sector, individually, or using any combination of the three.