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 a service provider to supply and deliver Cleaning material in Saldanha, Parow and Milnerton 2017-10-24 12:00 SFF/ 2017/ 027
Request for proposals to assist the ARC with developing and providing an electronic recruitment system 2017-10-23 11:00 ARC/ 12/ 08/ 17
Request for proposals to assist the ARC with the renovation of central office on the ground floor 2017-10-24 11:00 ARC/ 11/ 08/ 17
Request for proposals to assist the ARC with the improvement of security measures at the central office 2017-10-24 11:00 ARC/ 10/ 08/ 17
Request for proposals to assist the ARC with the design and placing of advertisement in the print media. 2017-10-23 11:00 ARC/ 07/ 08/ 17
Request for proposals to assist the ARC with the Annual Organizational and 360 degree assessments 2017-10-25 11:00 ARC/ 13/ 09/ 17
Appointment of a service provider to supply and deliver stationery in Saldanha, Parow and Milnerton 2017-10-24 12:00 SFF/ 2017/ 026
Supply: Insulated Peripheral Nerve Block Needle 2017-10-26 11:00 ZNB 69- 17/ 18
Service medium voltage switchgear 2017-10-26 11:00 ZNB 67- 17/ 18
Service to Diesel Generator (Stanford,type UC 1274C 380V, 0.8PF rating 100KVA/80KW, 1500RPM, 151.9A Serial number E7747/W) 2017-10-24 11:00 ZNQ113/ 17/ 18
The Improvement on National route 2 section 5 between Heidelberg (km 54.00) and Riversdale (km 81.97). 2017-10-20 14:00 NRA N.002- 050- 2016/ 1D- SS
Geotechnical drilling services for the Ring Road on National Route N8 West of Bloemfontein 2017-10-25 14:00 NRA N008- 110- 2016/ D- SS
Appointment of a contractor for construction of a Stormwater Management System in Robinson deep landfill site for Pikitup Johannesburg SOC Limited. 2017-10-24 11:00 PU034/ 2017
Replacing old valves with new installation of water network valves and pipe work in Makhathini Irrigation Scheme 2017-11-03 11:00 TTB/ MF2017- 06
Sedgefield: Goukamma Nature Reserve: Repair water supply damage. Designated Grading: 4CE or higher 2017-10-25 11:00 G008/ 17
The Western Cape Government Department of Human Settlements invites tenders for the Forest Village: Upgrading of Nooiensfontein sewage pumpstation and rising main 2017-10-20 11:00 HSC 06/ 2017/ 2018
Provision of Office Accommodation: Elliot Satellite Office for a period of 5 years. (Leases ranging from seven to ten years will also be considered). Office space between 102m² and 157m² and 4 parking bays are required 2017-10-24 11:00 25/ 2017
Purchase of building: Port Elizabeth Justice Centre Office space between 1187m² and 1262.40m² and 12 parking bays are required. 2017-10-24 11:00 23/ 2017
Provision of Office Accommodation: Secunda Satellite Office for a period of 5 years. (Leases ranging from seven to ten years will also be considered). Office space between 138.90m² and 142.80m² and 3 parking bays are required. 2017-10-24 11:00 24/ 2017
Pietermaritzburg: Department of Office of the Premier: Terry Street Parking and fencing project: CIDB grading 4 CE 2017-10-25 11:00 ZNTM00956W

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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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