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.
Annual Service to Earth Monitoring as per attahed specification 2018-04-27 11:00 ZNQ 23 / 18 / 19
Hard and Soft Landscaping at Cloetesville Hall/Library/Ward Admin Office for a contract period of 16 weeks. 2018-05-25 12:00 B/SM 97/18
Annual Service to Diesel Tank as per attahed specification 2018-04-27 11:00 ZNQ 16 / 18 / 19
Invitation of bids for the appointment of a service provider to render security services in the Department of Energy: Polokwane (Limpopo) regional office for a period of thirty six (36) months 2018-05-10 11:00 DOE/ 006/ 2017/ 18
Appointing of experienced service provider to read meters remotely, via Automated Meter Reading (AMR) system and manage metering services for large power users and small scale embedded generation consumers. 2018-05-25 12:00 B/SM 98/18
Major Service to Infrared Detection for all Clinics Under Bethesda Hospital as per attached specification 2018-04-27 11:00 ZNQ 14 / 18 / 19
Request For Information – database of printing and packaging service providers – South Africa. 2018-05-11 17:00 GPW- C 68
Major Service to Hospital Refrigeration as per attahed specification 2018-04-27 11:00 ZNQ 04 / 18 / 19
Supply and delivery of bricks, sand, gravel, stone and kerb mix. 2018-05-25 12:00 TENDER 104-17/18
Annual Service to Machine Tools/ Power Tools as per attahed specification 2018-04-27 11:00 ZNQ 20 / 18 / 19
Rendering of armed response and alarm system installation services for Mossel Bay Municipality. 2018-05-25 12:00 TENDER 90-17/18
Placement of Cardiac Readers for Gauteng and Eastern Cape Regions for a Period of Three Years 2018-05-14 11:00 RFB098- 17- 18
Major Service to Laundry Equipment as per attahed specification 2018-04-27 11:00 ZNQ 03 / 18 / 19
Annual Service to Water Reticulation as per attached specification 2018-04-27 11:00 ZNQ 19 / 18 / 19
Renovations to Hlabisa Laboratory 2018-05-21 11:00 RFB003/ 18/ 19
01 unit- telescope rigid 28cm length 2.7mm diameter 0 degree 2018-05-02 11:00 A 237/ 17- 18
40 units per month- 06 months contract for adult coiled 2 UFF peritoneal dialysis catheter kit 2018-05-02 11:00 A 305/ 17- 18
120 units per month- 06 months contract for disconnect Y set 2018-05-02 11:00 A 301/ 17- 18
02 units- Lumiview 3.5V halogen portable binocular microscope with headband portable battery pack and charger, reusable ear speculum set (#22100) battery and locally compatible plug 2018-05-02 11:00 A 556/ 17- 18
Provisioning of cash in transit services for 2 years 2018-05-02 11:00 A 221/ 17- 18

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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