When Must I Sub-Contract?

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.

The Draft Preferential Procurement Regulations stipulates the following: 

Finding Sub-contractors

According to the Draft Preferential Procurement Regulations, 30% of all Government Contracts above R30 million must be sub-contracted to specific categories of SMME’s. 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.

Once the new Regulations are gazetted there businesses will need to find sub-contractors to fill this requirement.

Sub-contractors versus Consortiums and Joint Ventures

Tenders and subcontracting

Did you know tenders and subcontracting go hand in hand. In fact, subcontracting part of a tender is so common in South Africa that there are specific rules regulating subcontracting in executing tenders especially Government tenders.

Pages

Title Closing Date Tender No.
Supply: Shirts 2017-11-30 10:00 GA11800225
Supply: 10 each x skull cap with back flap 2017-11-29 10:00 GA11800226
Supply: Fire fighting equipment 2017-12-01 10:00 GA11800227
Supply: Footwear 2017-12-01 10:00 GA11800228
Supply: Accessories 2017-12-01 10:00 GA11800229
Supply: Recreational items 2017-11-29 12:00 GG11800241
Supply: Care packs 2017-11-23 12:00 GG11800245
Supply and delivery of Borehole Motor at Withoogte 2017-11-24 12:00 6/5/2/184
Construction services (Electrification Projects) 2017-12-01 11:00 Cluster B: BM16/17/18
Supply and delivery of Nutritional Products Combos at Moorreesburg 2017-11-24 12:00 6/5/2/363
Construction services (Electrification Projects) 2017-12-01 11:00 Cluster B: BM15/17/18
Supply: Hardware items 2017-11-22 12:00 GG11800220
Supply, Delivery and Installation of Meteorological Equipment and Telescopic Mast in Velddrif 2017-11-24 12:00 6/5/2/136
Supply: Ear plugs 2017-11-27 10:00 GA11800213
Supply 150 each x handcuffs;hinged;blk;stainless steel 2017-11-28 10:00 GA11800216
Construction services (Electrification Projects) 2017-12-01 11:00 Cluster B: BM14/17/18
Supply: Sunglasses 2017-11-28 10:00 GA11800217
Service Provider to perform an internal audit: Review the adequacy and effectiveness of ICT portfolio management 2017-11-23 10:00 DSS0003670
Supply: tie - type: bow; colour: royal blue 2017-11-28 10:00 GA11800218
Construction services (Electrification Projects) 2017-12-01 11:00 Cluster B: BM13/17/18

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Functionality and Tenders

In all competitive bids (tenders) you as the bidder will have to respond to Functionality. You will need to score a set minimum number of points, measured as a percentage, on Functionality of a competitive bid (tender) in order to advance to the next phase of evaluation in the tender process.

Usually Organs of State evaluate competitive bids (tenders) as follows:

  • The tender response is evaluated on Functionality where the bidder must score points out of a maximum of 100 points.
  • A threshold of between 65 to 75 out of 100 points... Read More
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