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.
Berths 203 to 205 Reconstruction, Deepening and Lengthening: Construction of Northern Substation and Associated Works 2018-08-07 12:00 2122830-649
Upgrade to the Facade of the Existing Life Sciences Building located at the University of KwaZulu-Natal (UKZN), Westville Campus 2018-07-16 12:00 RFB UKZN 32/18
Dismantling and Construction of 33 and 132 KV Overhead Power Lines and optical ground wire within the Msunduzi Municipal Electrical Network for a period of three years 2018-07-27 12:00 SCM 1R OF 17/18
Internal and External Restoration of MTB Building, Howard Campus 2018-07-16 12:00 RFB UKZN 31/18
Appointment of a Service Provider to Develop Seventeen New Policies and Review and update of Four Existing Policies for the Free State, North West and Northern Cape Regions 2018-07-16 11:00 RFP/DNP/201781
Supply, delivery and installation of photocopiers for the Free State, North West and Northern Cape regions for a period of 36 months 2018-07-20 11:00 SW/SDIP/201780
Appointment of a reputable service provider to render travel and accommodation services in the department for a period of 3 years. 2018-07-23 11:00 SCMU14-18/19-0011
Appointment of a panel of event management companies to organize and manage the commemoration of national days and hosting of related departmental events for a period of 3 years. 2018-07-17 11:00 SCMU14-18/19-0008
Panel of Supply & Delivery of Road Kerbs, Paving Slabs, Catch Pits & Erosion Protection Blocks, Crusher Run & Aggregate for Concrete and Road Surfacing, Stormwater Pipes and Culverts for a period of Three years. 2018-07-16 12:00 3/2/17/2017-18
Terms of references to offer conferencing and accommodation facilities for 160 delegates in Gauteng. 2018-07-16 11:00 BID NO: SCMU: 03 - 2018/19
Appointment of a service provider to conduct impact assessments on INSETA Funded programmes. 2018-07-17 11:00 Lear/2018/04
USAASA HO Office Space Tender. 2018-07-17 11:00 USAASA-OFS/01/2018
Procurement of a travel management services to co-ordinate and manage all air travel, accommodation, car rentals, venue for conferences/meetings and workshops for a period of three years. 2018-07-17 12:00 CE 324
Supply, installation, management and maintenance of a Fully Integrated Voice Response (IVR) solution for Buffalo City Metropolitan Municipality for a period of three years. 2018-07-17 12:00 CE 326
Pre-qualification for Electrical & Civil works for Substations. 2018-07-17 10:00 MdB18/14
Supply and delivery of Kit Armature. 2018-07-17 10:00 TE18-KDS-6FA-04183
Design, Manufacture, Supply and Installation of a Coil Stacking System for Transnet SOC LTD operating at Transnet Port Terminals (hereinafter referred to as "TPT") at the Port of Saldanha Multi-Purpose Terminals. 2018-07-17 10:00 iCLM HQ 220/TPT
Service provider to support the strategic planning process for the 2019/20 planning cycle. 2018-07-17 11:00 RFP109/2018
To Supply and Manage Reception Personnel for Facilities. 2018-07-25 10:00 MPGXC004907 (Re-issue)
Consultancy Services for the Development of e-Governance Framework and an e-Government Implementation Guidelines (Toolkit) for the African Union Member States 2018-07-30 15:00 AUC/IED/C/309

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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