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.
Supply & delivery quick service application (QSA's) & 3/4" air cock valves - as & when required. 2018-07-18 11:00 DBN/OPS (RTPC) 758
Repairs to blower motor invertors & fans - as & when required. 2018-07-18 12:00 DBN/OPS (RTPC) 770
Repairs to doors (all components) - as & when required. 2018-07-18 13:00 DBN/OPS (RTPC) 779
Repairs & replacement of components in various substations (CIDB Grading 4EP). 2018-07-19 10:00 DBN/CAP (RTPC) 760
For conducting Occupational Hygiene Surveys over a period of three (3) years at all Petroleum and Flow Sciences Laboratories, i.e. Rosherville x 3, Seshego, Witbank, Pietermaritzburg, Port Elizabeth, Brackenfell, Bloemfontein and Klerksdorp on an as and when required basis. 2018-07-17 10:00 ERIC6303
Provision of operating/technical training services. 2018-07-18 10:00 59CON1869
The appointment of consulting engineers for various projects in Hessequa Municipal area for a three (3) year period. 2018-07-20 12:00 HES-TECH 35/1819
Supply and delivery of chemicals for Ash water system scale control, Auxiliary cooling water treatment and main cooling water system scale control at Matla Power Station on an as and when required basis. 2018-07-17 10:00 MPGXC005156
Provision of single phase testing training services. 2018-07-20 10:00 59CON1870
Supply, Delivery and Installation of 75 Litre Galvanised Swivel Street Litter Bins (Coastal,Inland and Midland Regions of BCMM). 2018-07-22 12:00 3175
Provision of Co-Sourced Internal Audit Services to Buffalo City Metropolitan Municipality. 2018-07-22 12:00 3174
Alienation and Development of Erf 21161 Paarl for Housing Development Purposes 2018-07-26 10:00 CORPORATE 07/2018
A Pre-Qualification Process for the provision of Debt Collection Services in Kwa Zulu Natal, Free State and North West Operating Units, for a period of thirty six (36) months. 2018-07-18 10:00 DD6665/CS
Risk assessment specialist for risk assessment analysis at the Afrikaans Language Museum, -Monument And Amphitheatre, Paarl. 2018-07-31 11:00 ATM007-2018/2019
Construction of Sikhulile Circuit Office in Ehlanzeni District. 2018-07-18 10:00 PWRT/2290/18/MP
Lady Frere Magistrate Office: Repairs and Renovations 2018-07-23 12:00 CDC/ 229/ 18
Provision of short term insurance services. 2018-07-19 12:00 06/06/02018
Supply and delivery of aerial ladder/platform 30m with articulated cage boom. 2018-07-21 12:00 B/SM 112/18
Electrical Reticulation Maintenance for Three Years at Bloemfontein Airport. 2018-07-23 10:00 BFN14/2018
Maintenance of Electrical Reticulation Infrastructure at Kimberley Airport. 2018-07-24 10:00 KIM10/2018

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
Free Keyword search

Search all tender notices for FREE!

No subscription or registration required!

You can also search by the reference of the the tender.

Advanced search

Search by Issuer, Region or Sector, individually, or using any combination of the three.