Issue Date: 
Tuesday, November 1, 2016

When to sub-contract?

There seems to be a lot of confusion amongst entrepreneurs when it comes to tenders and sub-contracting, due in large part, to The Preferential Procurement Regulations, 2017 which came into effect on 1 April 2017. Many entrepreneurs ask us whether they should sub-contract or not, when responding to a tender.

Regulation 9 of The Preferential Procurement Regulations 2017, stipulates the following:

1: If it is feasible to sub-contract for a contract above R30 million, an Organ of State must apply sub-contracting to advance designated groups.

2: The Organ of State must advertise this specific tender condition that the successful bidder must sub-contract at a minimum of 30% (of the value of the contract) to (one or more) to an EME or QSE which is at least 51% owned by:

a.    black people;

b.    black people who are youth;

c.    black people who are women;

d.    black people with disabilities;

e.    black people living in rural or under develop areas or townships;

f.    black people who are military veterans;

g.    A cooperative which is at least 51% owned by black people;

3: In paragraph 3 of Regulation 9 it also states that the Organ of State must make available the list of all suppliers registered on a database approved by the National Treasury to provide the required goods or services in respect of the applicable designated groups mentioned above from which the bidder must select a supplier.

Regulation 9 is very clear because its states "the tenderer MUST sub-contract…..". Thus, according to the Regulations all contracts with a value of R30 million and above will have to comply with this Regulation. Read the tender document carefully because somewhere in the tender document it will stipulate whether or not the bidder will have to sub-contract. Follow those rules. If the tender document doesn't contain any sub-contracting instructions then it is not necessary to sub-contract.

The fact is that the tender document will dictate what you should or should not do. Read the tender document carefully, follow the instructions precisely and to the point.

To learn more about this and all the other new developments regarding tenders, please attend one of our How-to-Tender workshops. Tender Workshop dates are published on our website at www.how2tender.com. For more information on the tender courses please email Werner at werner@how2tender.com.
 
This article was written by Werner van Rooyen, Director of HowToTender (Pty) Ltd. which specializes in tender consulting and tender training.

Title Closing Date Tender No.
Supply: Tools and equipment 2018-10-17 12:00 GD11900441
Timber 2018-10-18 14:00 PNQ2 TIMBER
Sale of institutional zone 2 property: Erf 10046: Beaufort West 2018-10-26 14:00 Notice No. 100/2018
Supply: Hardware items 2018-10-18 12:00 GG11900591
Alien and unwanted vegetation clearing and cleaning, grass cutting of open erven inclusive of all illegal dumping 2018-10-24 11:00 FQ/SM: 46/19
Supply, delivery and installation of play equipment in various parks in Stellenbosch (WC 024) 2018-10-25 00:00 FQ/SM : 42/19
Pattern Making Training 2018. 2018-10-17 11:00 7G‐128
Supply, delivery and installation of palisade fencing: parks and cemeteries in Stellenbosch (WC 024) 2018-10-25 11:00 FQ/SM: 43/19
Supply and delivery of Structural Fire Fighting Suits with a 100% Local Content as and when needed until 30 October 2019 2018-10-24 11:00 FQ/SM : 32/19
Remove, Supply and Install of up to 100 Wayfinding Signs (refer detailed appendix 1). 2018-10-19 14:30 WO.477043
Supply, delivery and Off-Loading of Garden Equipment 2018-10-24 11:00 FQ/SM : 34/19
Supply and delivery of Uniform for Law Enforcement 2018-10-25 11:00 FQ/SM 48/19
Sale of vacant residential erven and business zone 1 properties in Merweville 2018-10-26 14:00 Notice No. 98/2018
Bulk meter replacements and telementry installations on an as and when basis for a period of 36 months. 2018-11-20 10:30 JW 13901
MBDA seeks suitable service providers to quote for Plastic Recycle Bins with Lids 2018-10-22 11:00 BDA1018626
The MBDA seeks quotes for: 1 * Windows 10 Pro 64GB,14"-Core i7 6820HQ-8GB RAM-500GB HDD, Intel Graphics 530,TPM Security Chip and Backlight 1 * Backpack for laptop 2018-10-22 11:00 BDA1018625
Supply and Deliver Riot Shields Protection 2018-10-22 11:00 GQ10181960
Linbro Water Upgrades. 2018-11-20 10:30 JW 13899
Supply and Deliver Deluxe Riot Helmets 2018-10-22 11:00 GQ10181960
Supply and Deliver Deluxe Body Protection 2018-10-22 11:00 GQ10181960

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Advantages and disadvantages of Consortiums

Consortiums are often considered as entities to use when responding to tenders in South Africa. The question that arises is whether to use a Consortium or a Joint Venture when responding to a tender. To help you with this we have compiled a list of advantages and disadvantages for both Consortiums as well as Joint Ventures. In this article we list the advantages and disadvantages of Consortiums. Look out for the same article on Joint Ventures.

Consortiums Advantages:

  • Easy to establish as there are no formal procedures... Read More
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