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.
The Supply and Delivery of Wet Rations, various meat (fresh and frozen) to the Department of Defence (Cape Metropole Area). 2018-11-08 11:00 SPSC- B- 014- 2018
The Supply and Delivery of Dry Rations, Baking goods, Essence, Pudding, Jelly and Sugar to the Department of Defence (West Coast area). 2018-10-25 11:00 SPSC- B- 010- 2018
The Supply and Delivery of Dry Rations, Soups, Spreads and Preserves to the Department of Defence (West Coast area). 2018-10-25 11:00 SPSC- B- 009- 2018
The Supply and Delivery of Dry Rations, Pasta, Rusks and Biscuits and Porridges and Cereals to the Department of Defence (West Coast area). 2018-11-25 11:00 SPSC- B- 008- 2018
The Supply and Delivery of Dry Rations, Juices Dried Fruit & Veg, Canned Fruit & Veg, Canned meat etc to the Department of Defence (West Coast area). 2018-10-25 11:00 SPSC- B- 007- 2018
The Supply and Delivery of Wet Rations, various dairy products to the Department of Defence (West Coast area). 2018-10-11 11:00 SPSC- B- 006- 2018
Request for Proposals for Appointment of Developer and Operator for Vulindlela Retail Centre in Port Elizabeth 2018-06-25 12:00 CDC/ 228/ 18
Supply and Delivery of Wet Rations, various fish (fresh and frozen) to the Department of Defence (Cape Metropole Area) 2018-11-08 11:00 SPSC- B- 013- 2018
Supply and Delivery of Wet Rations, bread and rolls to the Department of Defence (Cape Metropole Area). 2018-11-08 11:00 SPSC- B- 015- 2018
Supply and Delivery of Dry Rations, Coffee, Tea and Cooking Oil to the Department of Defence (Cape Metropole Area). 2018-11-22 11:00 SPSC- B- 024- 2018
Supply and Delivery of Dry Rations, Condiments, Pickles and Herbs and Spices to the Department of Defence (Cape Metropole Area) 2018-11-22 11:00 SPSC- B- 023- 2018
Supply and Delivery of Dry Rations, Baking goods, Essence, Pudding, Jelly and Sugar to the Department of Defence (Cape Metropole Area). 2018-11-22 11:00 SPSC- B- 022- 2018
Supply and Delivery of Dry Rations, Soups, Spreads and Preserves to the Department of Defence (Cape Metropole Area) 2018-11-22 11:00 SPSC- B- 021- 2018
Supply and Delivery of Dry Rations, Pasta, Rusks and Biscuits and Porridges and Cereals to the Department of Defence (Cape Metropole Area) 2018-11-22 11:00 SPSC- B- 020- 2018
Construction of 33kV line from Tlokoeng to Polihali and relocation of the 33kV line along the A1 2018-07-10 14:00 LHDA C4005B
Appointment of a service provider to render Optometry Managed Care and Optometry Network Management Services to the Government Employees Medical Scheme for a period of one year 2018-07-05 11:00 GEMS/Optometry/2018/ CON002
Service Provider for Vat Recovery for a Period of 3 Years. 2018-06-27 11:00 PSJLM-BTO-2017/18-38
Request for Information on Provision of Wide Area Networks Data Links. 2018-06-26 10:00 CORP4487
Digital Plant Phenomic System (Re-advertisement) 2018-07-11 11:00 ARC/ 33/ 02/ 17
Upgrading of Aggate Terrace Road. 2018-06-26 11:00 PSJLM-MIG-OTP-12/1:A

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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