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 service provider to render internal audit services to Robben Island Museum for a period of three (3) years 2018-10-12 11:00 RIM EXE 01-2018 /2019
Design and develop a renewable energy hybrid mini-grid that is sustainable 2018-09-21 12:00 #91119897
Appointment of a Principal Agent to provide Civil and Structural services for the proposed Telecommunication site at Colesberg in the Northern Cape. 2018-10-23 12:00 SENT/030/2018-19
EMC Infrastructure Upgrade. 2018-10-09 13:00 RFP-18/19/28/EMC Infrastructure Update
For ¾ Pillow Top Bed Including Base for NHLS Delmas Laboratory, Mpumalanga. 2018-09-26 08:30 1420581
IBM Infrastructure Upgrade/AVW. 2018-10-09 11:00 RFP-18/19/29/IBM Infrastructure Upgrade/AVW
Biosafety Cabinet 2018-09-21 11:00 RFQ 1446901
1 x Upright Light Microscope 2018-09-25 11:00 1667839
Request for the Installation of access Control to the NICD Cottage Gates 2018-10-01 11:00 0911059/18-19
HP Infrastructure Upgrade. 2018-10-09 11:00 RFP-18/19/30/HP Infrastructure Upgrade/AVW
Microscope 2018-09-21 11:00 RFQ 1469472
Provision of Design, Supply, Install, Test And Commission Of Roof At Limpopo Lumber Politsi. 2018-10-09 12:00 TPIR/TZA/680 (Q) CIDB
For 4x Wooden Oak Filing Cabinets For Evander Laboratory 2018-09-26 10:00 RFQ 1420571
Provision of professional services for the implementation and management of the rural road asset management system in the Frances Baard District for a period of three (3) years. 2018-10-09 12:00 BID 14/18
Request for Proposal for Tourism Strategy and Implementation Plan. 2018-10-09 12:00 2/2/4/2018-19
For 4x Wooden Oak Filing Cabinets For Piet Retief Laboratory 2018-09-26 10:00 RFQ 1420574
For 4x Wooden Oak Filing Cabinets for Mmamethlake Laboratory 2018-09-26 10:00 RFQ 1420570
Request for Proposal and Repair/Sealing of Maokeng Reservoir. 2018-10-09 12:00 3/2/7/2018-19
For time and date Recorder for Tonga Labaratory 2018-09-26 10:00 RFQ 0704979
Establishment of a panel of service providers for provision of financial technical support services to provincial Departments and public entities in the North West Province on an as-and -when required basis for a period of two (2) years. 2018-10-10 11:00 NWDF04/2018

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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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