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.
The supply, delivery, demonstration & training of ten (10) defibrillators for use in various Departments at Groote Schuur Hospital. 2018-10-12 11:00 GSH8/2018
Differential Count Slide Stainer for Livingstone Haematology Laboratory 2018-09-26 11:00 RFQ 1469470
Supply: Cap and beanies 2018-09-25 10:00 GA11900261
Request for Printing of 10 000 Nmc Booklet 2018-09-25 11:00 1372672/18-19
Support, Maintenance and Upgrading of the VM Environment at the Production, Dr as well as the regional sites 2018-09-25 11:00 1401235
Supply and delivery of Tracksuits for the Or Tambo Games Participants 2018-09-25 16:00 365/09/2018
Request for proposal: Consultancy services for the design of project for unlocking rural and remote areas’ access to basic infrastructure and services (Energy, ICT, Integrated Road Network) 2018-10-19 15:00 AUC/IED/C/376
Supply: 20 each x cutting comfy harness. 2018-09-25 10:00 GA11900262
Supply and delivery of golf T-shirts for the OR Tambo Games participants 2018-09-25 16:00 366/09/2018
Supply Hardware items. 2018-09-21 12:00 GG11900479
Supply Hardware items 2018-09-25 12:00 GG11900478
Supply Ergonomic highback chair. 2018-09-25 12:00 GL11900230
Supply Cutlery and crockery 2018-09-27 12:00 GL11900250
Proposal for the Facilitation of a Boxing Tournament for the month of October 2018-09-25 16:00 367/09/2018
Supply Promotional items 2018-09-25 12:00 GL11900233
Supply 8 gig silicone wrist usb 2018-09-27 12:00 GL11900249
Supply 3 x 25 keys - steel key cabinets. 2018-09-25 12:00 GL11900234
Industrial wet&dry vacuum cleaner-Kuyasa 2018-09-21 12:00 GL11900248
Renewal of Veeam Backup and Replication 2 year subscription 2018-10-12 12:00 T28/2018
Test of Compressors as per Health and Safety Act,1993 in Langeberg Municipal Area 2018-09-21 10:15 Q 35/2018

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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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