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.
Supply of Integrated Competency Assessment services to SITA for a period of 36 months 2018-12-07 11:00 RFB 1841/ 2018
Provision and Implementation of Integrated Management Information System to Support SASSETA Core Business 2018-11-30 11:00 RFP/ SASSETA/ 201819128
Installation, Configuration maintenance of PABX and Call Centre Management Solution for a period of 12 months with the option to renew 2018-12-10 11:00 RFP/ SASSETA/ 201819129
Supply, Delivery, Installation and Configuration of Firewall and Switches on an outright purchase or rental basis (Managed) and maintenance thereof for a period of 12 months with the option to renew 2018-12-10 11:00 RFP/ SASSETA/ 201819130
Provision of Telecommunication and Internet Services for a period of 12 Months with the option to renew 2018-12-10 11:00 RFP/ SASSETA/ 201819125
Appointment of a service provider for the evaluation, due diligence and monitoring of Discretionary Grants until 31st March 2019 2018-12-10 10:00 RFP/ SASSETA/ 201819127/ 1
The rendering, manufacturing, repairing, fitting and supplying of aids for orthotic and prosthetic services to institutions in the Eden and Central Karoo District under Western Cape Government the Department of Health for a three year period 2018-12-07 11:00 WCGHCC031/ 1/ 2018
Appointment of a Service Provider to Facilitate Organisational Design and Related Services for RTMC. 2018-12-10 11:00 RTMC BID 19/ 2018/ 19
George: District Office: CBD : New Lease Office Accommodation For SASSA: Eden Karoo: 500m2, 10 Undercover Parking Bays for a 3 year lease period - Category - C 2018-11-28 11:00 CPTL27 / 18
Appointment of a Service Provider to Provide Online Banking Gateway Platform to the RTMC for a period of five years. 2018-12-07 11:00 RTMC BID 20/ 2018/ 19
George: Local Office: CBD: New Lease Office Accommodation For Dept of Rural Development & Land Reform: Eden Karoo: 1847.76m2, Secured parkingparking bays for GG vehicles, 2 Dedicated parking bays for persons with disabilities, 2 Parking bays for SMS, 20 Parking for private vehicles for staff & 6 safe parking bays for visitors & departmental customers for a 5 years lease period - Category - A, B,& D 2018-11-28 11:00 CPTL29 / 18
The RAF hereby invites service provider for Management and Administration of Fraud Hotline and Awareness for a period of five (5) years 2018-12-14 11:00 RAF 2018/ 00053
George : Local Office : CBD : New Lease Office Accommodation For SASSA: Eden Karoo: 778.75m2, 8 Lockup garages, 2 open parking bays & 5 visitors parking bays for a 5 years lease period - Category - A, B,& D 2018-11-28 11:00 CPTL28 / 18
TOR Research to Assess the Financial Feasibity of a Basic Income Grant 2018-12-19 10:00 Nedlac 2018/ 19/ 03
Repairs and upholstery of chairs, 29 chairs 2018-11-23 11:00 ZNQ 61/ 08/ 2018
Impact of the National Social Security Fund (NSSF) on Saving and Investment Markets 2018-12-19 14:00 Nedlac 2018/ 19/ 02
Compacting and disposal of forfeited and boarded saps vehicles to the South African Police Service: Nationally for a period of three (03) years 2018-12-14 11:00 19/ 1/ 9/ 1/ 68TV(18)
Voice, Data and Managed IT Services 2018-12-14 11:00 Nedlac 2018/ 19/ 04
Contract for the removal of wet waste (pigswill) from SAS Saldanha, West Coast for a period of two (2) years. Evaluation 80/20 principle. Validity period 120 days. 2018-12-11 11:00 SPSC- B- 051- 2018
The National Consumer Tribunal seek to appoint a software developer resource to assist with ongoing programming, database and technical support to the in-house developed NCT Case Management System (CMS). 2018-12-14 15:00 NCT- 4/ 3/ 2/ 31

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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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