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.
Appointment of Travel Management Companies to Provide Travel Management Services to Department of Sport, Arts and Culture. 2018-03-16 11:00 NCDSAC- 005- 2017
Re-Advert - Appointment of a project manager for the procurement of land and or a building, design plans and construction and or renovations of CETA Head Office 2018-03-02 11:00 022- 2017/ 2018
Provision of Document Management Solution and Services for a period of 36 months. 2018-03-28 11:00 SCMN011/ 2017
Construction of Hendrik Kanise Combined School in Alicedale 2018-03-26 12:00 CDC/ 343/ 17
The appointed service provider will be required to review and update the Spatial Development Frameworks (SDFs) of Kareeberg, Karoo Hoogland and Hantam Local Municipalities. 2018-03-16 12:00 NRF SARAO PEP6 002 2018
Construction of N.V Cewu Public Primary School in Grahamstown 2018-03-26 12:00 CDC/ 341/ 17
The establishment of a Panel of Legal Experts to provide legal support to the National Energy Regulator of South Africa (NERSA) for a period of three (3) years. 2018-03-15 11:00 NERSA/ 1718/ LAS/ PLE/ BID013
Construction of Samuel Ntlebi Primary School In Grahamstown 2018-03-26 12:00 CDC/ 342/ 17
Data Centre Air-conditioner 2018-03-16 11:00 TIH/ 2018/ 02
Supply, installation, configuration and implementation of Gauteng Broadband Network (GBN) Phase II and maintenance of phase I and II network infrastructure 2018-03-16 11:00 RFB 1705/ 2017
Appointment of a Service Provider to Conduct Due Diligence on Grant Funding Process for Projects Funded by the National Development Agency 2018-03-16 14:00 NDA23/ COO/ 11/ 18
Appointment of a service provider to conduct an impact assessment on the effect of the affordability regulations. 2018-03-16 11:00 NCR477/ 02/ 18
Service Provider to Provide short-term insurance cover for a period of 36 months. 2018-03-09 11:00 ZNT17/ 18KZNSB06
Gardening Services 2018-03-15 12:00 NMGS/ 2018/ 006
BUF - Buffalo City - King William’s Town Local Office Accommodation 2018-03-16 11:00 IEC/ EC- 02/ 2018
BUF - Buffalo City - East London Local Office Accommodation 2018-03-16 11:00 IEC/ EC- 01/ 2018
Appointment of a suitable and independent service provider that can provide appropriate internal audit services for the Mining Qualifications Authority management and Board 2018-03-19 11:00 MQA/ 45/ 17- 18
Supply and delivery of movable infrastructure for National Orders Awards Ceremony. 2018-03-19 11:00 HP17/ 023
Appointment of a travel Agency for the Period of 36 Months. 2018-03-27 11:00 MHSC015/ 2017- 18
The Department of Rural Development and Land Reform invites service provider(s) to submit company proposals for professional services to develop a Rural Development Plan (RDP) for Sarah Baartman District in the Eastern Cape Province for a period of ten (10) months 2018-03-09 11:00 DRDLR: EC 040(2017/ 2018)

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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