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.
Request to Supply, Install, Configure and Commission of a transparent LED panel solution including content management for the Durban ICC with three (3) years maintenance and support. 2018-05-14 11:00 RFB 1729/ 2018
Nkomazi Magistrate Court: Cleaning Services for the period of twelve months with an option to renew for another twelve months, measuring 3656 Square Meters 2018-05-11 11:00 NST18/ 009
Request for Information for a Visitors WIFI Access solution at National Parks. 2018-05-18 11:00 GNP- 005- 18
Appointment of service provider to supply and maintenance of a converged voice, video, and Data MPLS network. 2018-05-18 11:00 sefa: 20/ IT/ 2018
Kwamhlanga Magistrate Court: Cleaning Services for the period of twelve months with an option to renew for another twelve months, measuring 3212.58 Square Meters 2018-05-11 11:00 NST18/ 012
Mbibana Magistrate Court: Cleaning Services for the period of twelve months with an option to renew for another twelve months, Measuring 2834 Square Meters. 2018-05-11 11:00 NST18/ 010
Appointment of a panel of external legal attorneys for Small Enterprise Finance Agency (SEFA) for period of three (3) years. 2018-05-18 11:00 sefa: 21/ LEG/ 2018
Repairs and maintenance services of boilers and steam liners - National Health Laboratory Service (NHLS) – Coporate Head Office – Sandringham, for a period of Three (03) Years 2018-05-24 11:00 RFB012/ 18- 19
Repairs and maintenance services of transformers and switchgears - National Health Laboratory Service (NHLS) – Sandringham, Braamfortein and Charlotte Maxeke Campuses for a period of Three (03) Years 2018-05-25 11:00 RFB011/ 18- 19
Upgrade of chiller plant & HVAC systems 2018-05-21 12:00 MTK 01/ 2018
Mkobola Magistrate Court: Gardening Services for the Period of twelve months with an option to renew for another twelve months, measuring 4041 Square Meters 2018-05-11 11:00 NST18/ 014
Request for Tender for the Provision of Water and Sanitation Services to Ohlongeni (EMIS No. 243275) Senior Primary School in Ugu District, KwaZulu-Natal 2018-05-14 12:00 CDC/ 518/ 17
The Safety and Security Sector Education and Training Authority (SASSETA) invites constituent members operating in the safety and security sector to submit applications for Discretionary Grants for the 2nd funding window for the 2018/2019 financial year. 2018-05-14 12:00 RFP/ SASSETA/ 181901
Provision of Security Services for a period of (3) three years 2018-05-11 12:00 UMALUSI (18- 19) T0002
Appointment of a Travel Management Service for the South African Tourism. 2018-05-10 12:00 SAT 127/ 18
Appointment of Panel of Attorneys for PSETA. 2018-05-22 11:00 LPA/ PSETA/ 2018- 04
Provision of Internal Audit Services to the South African Qualifications Authority (SAQA) 2018-05-10 11:00 SAQA 0002/ 18 DFA
Appointment of a reputable service provider for the implementation and support of SharePoint 2016 services at the NRCS for a period of 24 (twenty-four) months. 2018-05-14 11:00 NRCS 004- 2017/ 2018
Appointment of grocery service providers to supply grocery for the HSRC cafeteria for a period of two (2) years. 2018-05-03 11:00 HSRC/ 02/ 2018/ 19
Appointment of a Service Provider to Provide Travel Management Services to Eastern Cape Office of the Premier for the period of 36 months with an option to extend for 12 months 2018-05-09 11:00 SCMU1- 18/ 19- 0001

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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