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 AND DELIVER AUTOREFRACTOR KERATO TONOPHECOMETER 2017-09-04 11:00 18/ 08/ 2017
SUPPLY AND DELIVERY OF A COMPREHENSIVE CHRONIC HAEMODIALYSIS SERVICE FOR GEORGE HOSPITAL FOR A THREE (3) YEAR PERIOD 2017-09-15 11:00 WCGHCC015/ 2017
3 DRAWER DESK (A) DESK 1600X1600MM(B) DESK HEIGHT PEDESTAL (OAK) LOCKABLE 5 YEARS GUARANTE; DESK 1600/1800X900 WITH CONFERENCE END AND 4 DRAWER PEDESTAL. 2017-08-25 11:00 ZNQ 230/ 17/ 18
DRESSING TROLLEY 2017-08-30 11:00 ZNQ: 311 / 2017 / 18
Supply Toxicology Kits (250 kits) Supply Blood Alcohol Kits (350 kits) 2017-08-25 11:00 94/ 17- 18
TRAUMA STRETCHERS. 2017-08-25 11:00 ZNQ 396 OF 2017 / 18
Sound proof audiometry book with extractor fan 2017-08-28 11:00 ZNQ156/ 17/ 17
Establishment of a Panel of Service Providers for Supply and Delivery of Current Gauging Equipment for the Measurement of Velocity and Discharge in Open Channels by Using the Acoustic Doppler and Tracer Methods for a Period of 24 Months 2017-09-19 11:00 W11238
Emergency and Resuscitation trolley x 7. NB// Specification will be available in the document 2017-08-29 11:00 123/ 17/ 18 PCHC
Suction machine x 4 2017-08-29 11:00 121/ 17/ 18 PCHC
Supply and install industrial tumble dryer machine x 1 2017-08-29 11:00 120/ 17/ 18 PCHC
Service tumble dryer for Pholela CHC and three clinics x 4 Service washing machine for Pholela CHC and five clinics x 7 2017-08-29 11:00 124/ 17/ 18 PCHC
Electrocardiograph x 4 2017-08-29 11:00 122/ 17/ 18 PCHC
Supply and deliver Sphygmomanometer -Aneroid - QTY: 30 Units Supply and deliver Mobile Trolley - QTY: 24 Units 2017-09-01 11:00 ZNQ: 60/ 17- 18
Supply and deliver Portable Diagnostic Set Battery Operated 2017-09-01 11:00 ZNQ: 194/ 17- 18
Supply and deliver Electronic Haemoglobin Meter 2017-09-01 11:00 ZNQ: 367/ 17- 18
-40 vaccine fridge as per H.T.S. specification 2017-08-25 11:00 ZNQ 398 OF 2017 / 18
Supply and deliver vaccine refrigerator, freezer upright (see description for details) 2017-08-29 11:00 ZNQ126/ 2017/ 2018NSI
1.mobile examination light x13 2017-09-05 11:00 ZNQ 231/ 17- 18
Supply domestic fridge as per attached list 2017-09-03 11:00 ZNQ 444/ 17- 18

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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