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 Professional Service Provider In Consortium/ Multi-Disciplinary Consisting of : Project Management Services, Civil And Structural Engineering Services, Quantity Surveying Services, Architectural Services, Mechanical and Electrical Engineering Services, Town and Regional Planning Services, Land Surveying Services, Agricultural Engineering Services, Environmental Practitioner Services, Construction Health And Safety Services and Geohydrology Services For The Project: The Establishment of Technical Support Unit For The Rural Infrastructure Development Directorate: Limpopo Provincial Shared Service Centre Of The Department Of Rural Development And Land Reform To Provide Project Management, Planning, Feasibility And Detail Design; And Cost Estimation For Build Environment Professional Services And Advisory Services For A Period Of Two (2) Years. 2018-12-07 11:00 5/ 2/ 2/ 1- CRDP- 0003 (2018/ 2019)
Department of Education: eThekwini Region: Amatshezulu High School: Hammarsdale: Water and Sanitation Programme Phase 3 2018-12-18 11:00 ZNTD 03835W
Department of Education: eThekwini Region: Mankayiyana Primary School: KwaDukuza: Water and Sanitation Programme Phase 3 2018-12-18 11:00 ZNTD 03869W
Department of Education: eThekwini Region: Magojolo Primary School: Maphumulo: Water and Sanitation Programme Phase 3 2018-12-18 11:00 ZNTD 03870W
Department of Education: eThekwini Region: Emolweni Primary School: Emolweni: Water and Sanitation Programme Phase 3 2018-12-18 11:00 ZNTD 04055W
Department of Home Affairs:Pinetown Local Office:Procurement of Office Accommodation and Parking: Office space required of 962.76m² and 11 secured parking bays on site. 2018-12-13 11:00 DBN18/ 11/ 01
Supply and Delivery of Protective Clothing for Cleaning and Gardening Service 2018-12-08 11:00 NST18/ 037
Kimberley: Gardening services for three years at the Department of Roads and Public Works Distric Office (Padkamp Offices) 2018-12-14 11:00 DRPW 031/ 2018
Kimberley: Gardening services for three years at the Department of Roads and Public Works,Tebogo Leon Tume Complex and Prestige Accommodation 2018-12-14 11:00 DRPW 032/ 2018
Kimberley: Gardening services for three years at the Department of Roads and Public Works,Frances Baard Distric Workshop 2018-12-14 11:00 DRPW 033/ 2018
Limpopo Province: Tzaneen: Procurement of alternative office accommodation (existing building or building to be constructed) at a total guideline gross area of 313.43 sqm and lettable area of 284.94 sqm on behalf of the Department of Correctional Services for a period of 03 years 2018-12-11 11:00 PLK18/ 45
Limpopo Province: Musina: Procurement of alternative office accommodation (existing building or building to be constructed) at a total guideline gross area of 350.02 sqm and lettable area of 315.02 sqm with 08 shaded parking bays on behalf of the South African Police Services for a period of 3 years. 2018-12-11 11:00 PLK18/ 44
Limpopo Province: Burgesfort: Procurement of office accommodation (existing building or building to be constructed) at a total guideline gross area of 465 sqm and lettable area of 422.73 sqm with 05 parking bays on behalf of Department of Labour for a period of 05 years. 2018-12-11 11:00 PLK18/ 46
Limpopo Province: Thohoyandou : Procurement of office accommodation (existing building or building to be constructed) at a total guideline gross area of 941.50 sqm and lettable area of 855.91 sqm with 50 parking bays on behalf of the Department of Correctional Services for a period of 03 years. 2018-12-11 11:00 PLK18/ 50
Limpopo Province: Polokwane: Procurement of office accommodation (existing building or building to be constructed) at a total guideline gross area of 637.25 sqm and lettable area of 579.32 sqm with 21 parking bays and a generator on behalf of the Department of Higher Education and Training for a period of 05 years. 2018-12-11 11:00 PLK18/ 48
Limpopo Province: Polokwane : Procurement of office accommodation (existing building or building to be constructed) at a total guideline gross area of 572 sqm and lettable area of 520 sqm with 23 parking bays on behalf of Government Pension Administration Agency for a period of 03 years. 2018-12-11 11:00 PLK18/ 47
Limpopo Province: Thohoyandou (Vhembe Regional Share Service Centre) : Procurement of office accommodation (existing building or building to be constructed) at a total guideline gross area of 1680.60 sqm and lettable area of 1231.53 sqm with 43 parking bays and a generator on behalf of the Department of Rural Development and Land Reform for a period of 05 years 2018-12-11 11:00 PLK18/ 49
Gamalakhe: Department of Health: Gamalakhe Community Health Centre: Hire of Residential Accommodation (Flat/House) 10 x bedrooms 2018-11-20 11:00 ZNT 2847W
Clean Ducts and Filters and Do a Particle Count In Theatres X 02 2018-11-23 11:00 ZNQ 918 / 18- 19
Servicing of Air conditioners(Split Units) 2018-11-28 11:00 ZNQ 87 / 18- 19

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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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