Issue Date: 
Tuesday, November 1, 2016

When Must I Sub-Contract?

There seems to be a lot of confusion amongst entrepreneurs when it comes to tenders and sub-contracting. The Draft Preferential Procurement Regulations, have been gazetted and are currently up for review. However, these Regulations are the major cause for the confusion. Many entrepreneurs ask whether they should sub-contract or not whilst responding to a tender.

The Draft Preferential Procurement Regulations stipulates the following: 

  1. For contracts above R30 million, the tenderer MUST sub-contract a minimum of 30% of the value of the contract to –
    • One or more of the categories:
      • EME’s (Exempt Micro Enterprises) or QSE’s (Qualifying Small Enterprises) owned by black people who are female;
      • EME’s or QSE’s owned by black people from the ages 14 to 35;
      • EME’s or QSE’s owned by black people;
      • EME’s or QSE’s owned by black people with disabilities)
    • One or more Exempt Micro Enterprises (EME’s) or Qualifying Small Enterprises (QSE’s); or
    • One or more small businesses, as defined in the National Small Business Act.
  2. If a successful tenderer sub-contracts to another person without disclosing it in its tender documents, the organ of state must penalise the tenderer 10% of the value of the contract, unless the tenderer submits a satisfactory reason for failing to make the disclosure.

The Regulations are very clear because its states “the tenderer MUST sub-contract…..”. Thus, once the Regulations are finally gazetted then all contracts with a value of R30 million and above will have to comply with this Regulation. Remember that currently (as of 31 Oct. 16) the Regulations are not finalized yet.

Until such time that the Regulations are finalized the answer is easy whether or not to sub-contract – look at the scope of the tender or the special conditions. Somewhere in the tender document it will stipulated whether or not the tenderer will have to sub-contract.  Follow those rules. If the tender document doesn’t contain any sub-contracting instructions (at this stage) then it is not necessary to do so.

The fact is that the tender document will dictate what you should or should not do. Read the tender document carefully and follow the instructions to the point.

To learn more about this and all the other new developments regarding tenders, attend one of the How-to-Tender workshops.

Learn to earn

www.how2tender.com

Title Closing Date Tender No.
Supply of material and installation of Beta fencing at Thubelitsha Park in Kayamandi 2017-09-05 11:00 FQ/SM30/18
Supply: Filing kit, file, chain, guide bar 2017-08-23 12:00 W041800160
Appointment of a Suitably Qualified, Professional Conference Facilitator to Organise a Housing Summit in Conjunction with Directorate: Human Settlements and Property Management at Stellenbosch Municipality in September 2017 as per specifications 2017-08-31 11:00 FQ/SM 32/18
Supply and deliver ifm inductive sensors 2017-08-23 12:00 W041800163
Purpose of the proposed programme is to celebrate national youth day through a Mayoral Skills Development programme 2017-09-05 11:00 FQ/SM35/18
Mayoral Youth Skills Development: General building maintenance training 2017-09-05 11:00 FQ/SM37/18
Supply and delivery of 66 EPWP uniforms 2017-08-28 12:00 KZN294/00016-EPWP/2017/18
Training of TDA Staff in Coreldraw 2017-08-29 12:00 A071800124
Driver Training, Code C1 (10) & EC (14) in TDA 2017-08-29 12:00 A071800128
Supply: Taps 2017-08-28 15:00 R101800139
Basic Incident Command Training (Based on FEMA ICS) 2017-08-29 12:00 A071800127
Portable toilet hire & service 2017-08-24 14:00 A071800126
Provision of Legal Services 2017-09-01 12:00 SCM/2018/90/CORP
Supply and delivery of 40" tv with brack 2017-08-24 11:00 W061800095
Hiring of ambulances 2017-08-23 12:00 ZDMQ0201/08/2017
Supply and delivery of sound equipment 2017-08-29 11:00 W061800090
Accommodation for Msizi NQF 3 training around Ulundi 2017-08-23 12:00 ZDMQ: 0203/08/2017
Supply: Safety clothing 2017-08-25 10:00 R011800157
Accommodation for the Msizi Learnership Training around Ulundi 2017-08-23 12:00 ZDMQ: 0204/08/2017
Supply and delivery of telephones 2017-08-24 11:00 W061800103

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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