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.
Department of Education: Ewubwini Primary School and Induma Junior School: Sanitation Programme: Cluster UGU 08: CIDB Grading 6 GB or higher (Only Eyesizwe Contractors) 2018-12-19 11:00 ZNTM00906W
Department of Education: Sifsesihle Primary School : Sanitation Programme : Cluster UMG 25: CIDB Grading 5 GB or higher (Only Eyesizwe Contractors) 2018-12-19 11:00 ZNTM00951W
Department of Education: Fortmannspruit Primary School: Sanitation Programme: Cluster UMG 19: CIDB Grading 5 GB or higher (Only Eyesizwe Contractors) 2018-12-19 11:00 ZNTM00923W
Container aluminium sterilization with 2 filters on top 2018-11-27 11:00 PSH 1054/ 1819
Department of Education: Pheshe Primary School : Sanitation Programme : Cluster UMG 17: CIDB Grading 5 GB or higher (Only Eyesizwe Contractors) 2018-12-19 11:00 ZNTM00921W
Department of Education: Amandus Hill Primary School: Sanitation Programme: Cluster UMG 08: CIDB Grading 5 GB or higher (Only Eyesizwe Contractors) 2018-12-19 11:00 ZNTM00944W
Department of Education: Emnwaneni Primary School : Sanitation Programme : Cluster HG 12: CIDB Grading 5 GB or higher (Only Eyesizwe Contractors) 2018-12-19 11:00 ZNTM01067W
Occupational items: rubber pencil, super glue, soccer ball and bathroom mat. Quantity: various 2018-11-27 11:00 PSH 1061/ 1819
Gugulethu Office 1: New office Accommodation for SASSA: Area of 922.57m2 and 2 Lockup garages, 8 Undercover & secured parking bays for a 3 years period. Category C. 2018-12-07 11:00 CPTL31 / 18
Gugulethu Office 2: New office Accommodation for SASSA: Area of 695.54 and 2 Lockup garages, 8 Undercover & secured parking bays for a 3 years period. Category C. 2018-12-07 11:00 CPTL32 / 18
Khayelitsha Office 1: New office Accommodation for SASSA: Area of 999.45m2 and 2 Lockup garages, 8 Undercover & secured parking bays for a 3years period. Category C. 2018-12-07 11:00 CPTL33 / 18
Instrubac blue (5 lt). Quantity: 3 units 2018-11-27 11:00 PSH 875/ 1819
Department of Education: Emtulwa Primary School : Sanitation Programme : Cluster UMG 18: CIDB Grading 4 GB or higher (Only Eyesizwe Contractors) 2018-12-19 11:00 ZNTM01064W
Oesophageal dilators. Quantity: 100 units 2018-11-27 11:00 PSH 954/ 1819
Department of Education: eThekwini Region: Madlanga Junior Primary School: Mandini: Replacement of Perimeter Fencing 2018-12-20 11:00 ZNTD 04648W
Vredendal: New office Accommodation for SASSA : Area of 653.13m2, 8 Undercover & secured parking bays for a 3years period. Category C 2018-12-07 11:00 CPTL36 / 18
Department of Education: eThekwini Region: Macambini Primary School: Gingindlovu: Replacement of Perimeter Fencing 2018-12-20 11:00 ZNTD 04647W
Department of Education: eThekwini Region: Umzokhulayo Junior Primary School: Ndwedwe: Replacement of Perimeter Fencing 2018-12-20 11:00 ZNTD 04663W
Khayelitsha Office 2: New office Accommodation for SASSA: Area of 964.45m2 and 2 Lockup garages, 9 Undercover & secured parking bays for a 3 years period. Category C. 2018-12-07 11:00 CPTL34 / 18
Department of Education: eThekwini Region: Untunjambili Primary School: Stanger: Replacement of Perimeter Fencing 2018-12-20 11:00 ZNTD 04675W

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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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