3 Sub-contracting rules to be aware of when responding to tenders

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 that has been implemented on the 1st of April 2017. Many entrepreneurs ask us whether they should sub-contract or not, in responding to a tender and how and where do they get onto the sub-contracting lists.

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.

Finding Sub-contractors

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.

After the Preferential Procurement Regulations were gazetted there is a need for businesses to find sub-contractors.

But where are businesses, which respond to tenders, going to find sub-contractors? We have thought about this and one answer is at Briefing Sessions.

Sub-contractors versus Consortiums and Joint Ventures

The Preferential Procurement Regulations, 2017 states that 30% of all Government Contracts above R30 million must be sub-contracted to specific categories of SMME's. These SMME's include, but are not limited to, black female owned and black youth owned businesses.

Tenders and Subcontracting

Tenders and subcontracting go hand in hand. In fact, subcontracting part of a tender is so commonly placed that in South Africa there are specific rules regulating subcontracting in executing tenders. This is especially true for South African Government tenders.

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Title Closing Date Tender No.
Appointment of a Panel Of Attoneys to Assist Sedibeng District Municipality with Legal Related Matters on an Ad Hoc Basis. 2019-01-08 12:00 8/2/1/2-2018
Appointment of service provider to provide security services at Buffalo City Metropolitan Municipality – Silver Crown Old Age Home for the Department of Social Development, Eastern Cape for a period of three (3) years 2019-02-04 11:00 SCMU4-18/19-0037
Provision of Short Term Insurance for the Period From 01 July 2019 to 30 June 2022 2019-01-18 12:00 FIN 01/2019/20
Consulting engineering services for the routine road maintenance of national route N2 section 8 km 80.08 to section 10 km 73.50 and national route R62 section 6 km 36.76 to section 8 km 2019-02-04 14:00 X.003-030-2019/1F
Consulting engineering services for the routine road maintenance of national route N2 section 12 km 0 to section 13 km 103.56 and national route R67 section 2 km 0 to km 36.19 2019-02-04 14:00 X.003-032-2019/1F
Appointment of service provider to provide security services at Buffalo City Metropolitan Municipality – Enoch Sontonga Rehabilitation Center for the Department of Social Development, Eastern Cape for a period of three (3) years 2019-02-04 11:00 SCMU4-18/19-0036
Leasing of Premises for Customer Care Centres For uMgungundlovu District Municipality 2019-02-04 12:00 39/2018
Upgrading of the Kleinbrak 66/11kv substation 2019-02-08 12:00 TENDER 51-18/19
Appointment of Communication Service Provider to Assist the Department to Design, Develop and Edit a Publication on the Success Stories of the Environmental Programmes Branch of the Department of Environmental Affairs 2019-01-11 11:00 E1496
Spesialisdienste van Afrikaanse Taalkundige word verlang vir projek om Historiese gemarginaliseerde Afrikaanse varieteite te onsluit (Oranjerivier Afrikaans) 2019-02-12 11:00 ATM 017/2018-2019
Appointment of the service provider to conduct an Implementation evaluation of the Environment and Culture Sector within the EPWP 2019-01-11 11:00 E1497
Supply and delivery of gloves to PetroSA, GTL refinery (call of contract) 2019-02-15 11:00 CTT20907
Redesign, fabrication and installation of lifting platform main beams at Syncrolift dry dock in the Port of Cape Town 2019-02-19 10:00 TNPA 783/CIDB
Supply and Instal 4 Air Conditioners at NHLS Doran Nginza - Port Elizabeth 2018-12-28 11:00 RFQ 1469498
Supply, Deliver & Installation of Furniture at Gonubie Resort 2018-12-19 12:00 RFQ/DCS/2018-19/285
Supply and Delivery of Faltering Acid to BCMM Stores, Chiselhurst, East London 2018-12-19 12:00 RFQ/SCM/2018-19/283
Overhaul Bauer K 14 Upright Compressor 2018-12-19 12:00 RFQ/HPS/2018-19/281
Supply, Delivery & Installation of Storage Containers for Traffic Services 2018-12-19 12:00 RFQ/HPS/2018-19/280
Period Tender for Manufacturing and Installation of Transformer Fire Protection 2019-01-31 10:00 194Q/2018/19
Supply and Delivery of HTH Chlorine to Bcmm Stores, Chiselhurst, East London 2018-12-19 12:00 RFQ/SCM/2018-19/282

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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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