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.
Terms of Reference for the appointment of an accredited service provider for the implementation of Learnerships and Skills Programme for the ETDP SETA 2018-12-10 11:00 SCMU: 23 - 2018/ 19
Terms of Reference for training providers to offer the ETDP SETA Skiils Programme Teaching with Technology 2018-12-11 11:00 SCMU: 21 - 2018/ 19
Terms of Reference for the appointment of an accredited service provider for the implementation of Learnerships and Skills Programme for the ETDP SETA 2018-12-10 11:00 SCMU: 18 - 2018/ 19
Request to renew the following corporate subscription services BMI, CEB (IT), EBSCO, LEXISNEXIS, SAFARI, SABINET, CEB (SCM), CIS, IFR,SABS, ISF, TOGAF, CWTL and IODSA. 2018-12-07 11:00 RFB 1809/ 2018
Terms of Reference to provide customised training to 200 community college practitioners 2018-12-11 11:00 SCMU: 20 - 2018/ 19
Terms of Reference for the development of learning materials. 2018-12-11 11:00 SCMU: 19 - 2018/ 19
Appointment of service provider for a fully managed Picture Archiving Communications Systems (PACS) including the installation, configuration, enhancement, support and maintenance for the Gauteng Department of Health (GDOH) for a period of five (5) years. 2018-12-07 11:00 RFB 1840- 2018
Terms of Reference for the procurement of office furniture for ETDP SETA Head Office and Provincial Offices 2018-12-12 11:00 SCMU: 24 - 2018/ 19
Terms of Reference to appoint a panel of legal service providers 2018-12-11 11:00 SCMU: 22 - 2018/ 19
Appointment of a service provider for the provision of the SITA Micro Organisation Placement & Migration Management Services required to migrate employees to the new micro structure. 2018-12-10 11:00 RFB 1839/ 2018
Provision of Crisis Communication Management Services to Dube TradePort Corporation for a period of three (3) years 2018-12-10 11:00 DTP/ RFP/ 23/ MKT/ 08/ 2018
Appointment of a Service Provider to Assist the Department of Transport to Update the National Freight Databank. 2018-12-07 11:00 DOT/ 12/ 2018/ ITP
Appointment of a Service Provider for the Development of the Road Freight Strategy Integrated Implemetation Plan 2018-12-07 11:00 DOT/ 14/ 2018/ ITP
Appointment of a Service Provider to Conduct a Risk Management Audit From Date Of Award Until 31 March 2019. 2018-11-30 11:00 FMA 0004- 2018/ 19
Appointment of a Service Provider to Identify and Map All Fallow and Active Lands in South Africa within a Period of 5 Months. 2018-11-29 11:00 5/ 2/ 2/ 1- RDLR 0046(2018/ 2019)
Appointment of a Service Provider to Provide Operational and Compliance Audit Projects at the Department of Rural Development and Land Reform, for Two Audit Projects as per the 2018/2019 Annual Internal Audit Plan 2018-12-06 11:00 5/ 2/ 2/ 1- RDLR 0047(2018/ 2019)
Appointment of a Service Provider to Perform an External Quality Assessment Review for the Department of Rural Development and Land Reform, Chief Directorate: Internal Audit for the Period of 15 Days. 2018-11-29 11:00 5/ 2/ 2/ 1- RDLR 0050 2018/ 2019)
Appointment of a Service Provider to Manage the Land Rights Management Facility Established to Provide Legal and Mediation Services to Labour Tenants, Farm Dwellers, Communal Property Institutions, Restitution Claimants and Other Land Reform Beneficiaries in Nine Provinces for the period of three years 2018-11-29 11:00 5/ 2/ 2/ 1- RDLR 0051 (2018/ 2019)
Appointment of a Professional Service Provider In Consortium/ Multi-Disciplinary Consisting of :Architectural Services, Civil and Structural Engineering Services, Mechanical and Electrical Engineering Services and Quantity Surveying Services to Provide Project Management, Design and Construction Supervision for The Construction of Ga-Kgatla (Papola) Feedmill Situated In Blouberg Local Municipality Within The Capricorn District Municipality In Limpopo Province 2018-11-29 11:00 5/ 2/ 2/ 1- CRDP- 0004 (2018/ 2019)
Appointment of a Professional Service Provider In Consortium/ Multi-Disciplinary Consisting of :Architectural Services, Civil And Structural Engineering Services, Mechanical and Electrical Engineering Services And Quantity Surveying Services To Provide Project Management, Design and Construction Supervision for the Construction of a Community Hall at Nwamatatani Village Located In Collins Chabane Local Municipality Within Vhembe District of The Limpopo Province. 2018-11-29 11:00 5/ 2/ 2/ 1- CRDP- 0005 (2018/ 2019)

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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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