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.
40 units per month- 06 months contract for PD temp RCT- 248k (adult) peritoneal dialysis catheter stylet 2018-05-02 11:00 A 307/ 17- 18
Appointment of suitably qualified service provider, for the service and maintenance of chemical toilets within the Stellenbosch jurisdiction for a contract period ending 30 June 2020. 2018-05-25 12:00 B/SM 92/18
01 unit- 600W powered with 500W heat coil frame heater/warmer euro 1832 frame warmer/heater 2018-05-02 11:00 A 555/ 17- 18
04 units- universal DVT machine (intermittent pneumatic compression system) with Cald thigh and foot garments 2018-05-02 11:00 A 233/ 17- 18
Slipway and Marine Infrastructure Repairs in Hout Bay, Kalk Bay, Gordons Bay, Hermanus and Pepper Bay Harbours – Phase 1 2018-05-22 12:00 CDC/ 18/ 18A
01 unit- potential acuity meter 2018-05-02 11:00 A 276/ 17- 18
Supply, installation, maintenance and support of an IP based PABX with a switchboard solution for a period of 3 years. 2018-05-25 12:00 B/SM 96/18
Slipway and Marine Infrastructure Repairs in St Helena Bay, Laaiplek And Lambert’s Bay Harbours – Phase 1 2018-05-22 12:00 CDC/ 18/ 18B
Construction of Infrastructure works under cluster 6 water backlog project (Gubenxa village reticulation scheme). 2018-05-25 12:00 13/2018/MD(TN)
Cluster 6 Water Backlog Project- Construction of Lixeni, Ncityana & Kumbeke. 2018-05-25 12:00 14/2018/MD(TN)
60 units per month- 06 months contract for y-type peritoneal dialysis set with drainage tubing 2018-05-02 11:00 A 306/ 17- 18
Tenders are hereby invited from recognised tabloid size or bigger newspapers for the rendering of advertising services for the Mossel Bay Municipality for a period of 1 July 2018 until 30 June 2021. 2018-05-25 12:00 TENDER 89-17/18
Appointment of a service provider for provision of USAASA Polokwane Office Space for a period of five(5) years 2018-05-16 11:00 USAASA- OFSP/ 03/ 2018
Supply and deliver Bandage pop 75mm,100mm 150mm and 200mm (09 months contract)-Samples to be requested 2018-05-01 11:00 ZNQ 03/ 04/ 2018
Installation of electrical pre-paid meters/smart meters and the installation of electricity meters with Automatic Meter Reading Function (AMR). 2018-05-25 12:00 TENDER 95-17/18
Supply and deliver swab gauze 100x100mm x 8ply (09 months contract)- Samples to be requested 2018-05-01 11:00 ZNQ 02/ 04/ 2018
Supply and installation of electrical equipment. 2018-04-25 12:00 TENDER 101-17/18
Appointment of SARAO Website Maintenance and Support Service Provider 2018-05-04 14:00 NRF SARAO RFQ SRES 001 2018
Major service to generator set as per attached specification 2018-04-27 11:00 ZNQ 02/ 18 / 19
Maintenance, testing and inspection of electrical equipment. 2018-05-25 12:00 TENDER 102-17/18

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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