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: 

Finding Sub-contractors

According to the Draft Preferential Procurement Regulations, 30% of all Government Contracts above R30 million must be sub-contracted to specific categories of SMME’s. These categories are:

  • Black female owned EME’s or QSE’s;
  • Black youth owned EME’s or QSE’s;
  • Black owned EME’s or QSE’s.

Once the new Regulations are gazetted there businesses will need to find sub-contractors to fill this requirement.

Sub-contractors versus Consortiums and Joint Ventures

Tenders and subcontracting

Did you know tenders and subcontracting go hand in hand. In fact, subcontracting part of a tender is so common in South Africa that there are specific rules regulating subcontracting in executing tenders especially Government tenders.

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Title Closing Date Tender No.
Appointment of a service provider to supply and deliver stationery and toners to the Tshwane Economic Development Agency (TEDA) for a period of two years 2017-10-12 11:00 BID TEDA: 02/09/17
Appointment of a Service Provider to Transport Confidential Parcels to Various Destinations (±84 Destinations) for the South African Nursing Council 2017-10-09 11:30 SCM 15/2017/SANC
Supply, Delivery and Maintenance of Water Coolers and Accessories to the South African Nursing Council. 2017-10-09 11:30 SCM14/2017/SANC
Repairs and Maintenance to Filtration Plant equipment at Bellville South Swimming Pool 2017-10-02 12:00 SG11800027
Supply: Spanners 2017-09-22 12:00 W041800259
Supply: Cutter head, cutter blade & hand file 2017-09-22 12:00 W041800262
Supply of Academic Attire for Graduation Ceremonies. 2017-10-03 12:00 EGO 2017/01: ACADEMIC ATTIRE
Supply: Line & rakes 2017-09-22 12:00 W041800261
Supply: Line & rakes 2017-09-22 12:00 W041800260
Supply: Out-Board Engine 90hp Four Stroke (all cables and fitment of engine to be included in Price 2017-09-28 12:00 wc11800277
A Practical Approach to HACCP Training – Public Course 2017-10-02 09:00 SM11800165
Audio Visual Services - Older Persons Event 2017-09-27 09:00 SM11800168
Supply: 30 each x ups network management card 2017-09-27 11:00 W061800181
Supply and delivery of apc smart ups 2017-09-27 11:00 W061800180
Supply and delivery of timer switch 2017-09-22 11:00 W061800179
Supply and delivery of telephones 2017-09-27 11:00 W061800178
Supply: Sliced bread, brown 2017-09-21 15:00 R081800234
Supply: Groceries 2017-09-21 15:00 R081800241
Supply: Supply: Groceries 2017-09-26 15:00 R081800236
Tender for the supply, installation and provision of ICT solutions at African Peer Review Mechanism in Midrand, South Africa 2017-10-13 14:30 02/APRM/07/2017

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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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