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 Service Provider to Render Laundry Services for a period of Three (03) Years 2019-01-30 10:00 PM102/2018
Oudtshoorn Municipality: Refurbishment of booster pump stations AP1, AP6, AP7 and Vlakteplaas 2019-01-25 12:00 TD3/10/18
Oudtshoorn Municipality: Refurbishment of pressure control chambers and bulk water meters 2019-01-25 12:00 TD4/10/18
Provision of surgical consumables for forensic pathology services in the Mpumalanga Department of Health for a period of three years 2019-01-22 12:00 HEAL/181/18/MP
Supply and delivery of cleaning chemical for Mpumalanga Department of Health for a period of three years 2019-01-22 12:00 HEAL/182/18/MP
Supply and delivery of toilet paper to Mpumalanga Provincial Government Departments for a two (2) year period, as and when required 2019-01-31 12:00 MPPT005/17/01
The appointment of a service provider to assist with the service level agreement for maintenance and repairs on the installed access control and cctv systems for a period of 3 years 2019-01-21 11:00 RFP347/2018
Appointment of a service provider to undertake an independent investigation and provide recommendations on options for the appropriate institutionalisation 2019-01-21 11:00 RFP348/2018
Outright purchase of a Mercedes-Benz Vito 116CDI Tourer Select (2019) long wheel base (8 seater) with tow-bar 2019-01-24 11:00 06/2018/19
Supply, delivery, installation and rental of dosing equipment including the supply and delivery of calcium hypochlorite solution for ERWAT WWCW 2019-01-25 12:00 RE- ADVERT ERW201710/TNDR-008
The supply, delivery, installation and monitoring of a tracking system that will include hardware, software, labour, cellular airtime and maintenance on a thirty six (36) month rental basis services and to supply, commission and install an integrated and automated fuel and fleet management solution with associated on-site and managed information services for a period of thirty six (36) months 2019-01-25 12:00 ERW201804/TNDR-005
Request for proposals for appointment of a service provider to review and amendment of the City of Johannesburg, (COJ) informal trading policy for a period of six (6) months. 2019-01-31 10:30 A797
Appointment of service provider to provide plumbing services on all ERWAT sites 2019-02-01 12:00 ERW201806/TNDR-001
Request for proposals for City of Johannesburg panel for training interventions for the period of three years (3) 2019-02-15 10:00 A796
Supply & Delivery of Wireless Network Equipment 2019-01-18 12:00 SCM/2019/75/CORP
Supply, Delivery, Service & Maintenance of Firefighting Equipment 2019-01-18 12:00 SCM/2019/78/CORP
Provision of Air Conditioner Maintenance Services 2019-01-18 12:00 SCM/2019/80/CORP
Provision of Mimecast Services 2019-01-18 12:00 SCM/2019/85/CORP
Supply & Delivery of Electrical Inventory Items 2019-01-25 12:00 SCM/2019/94/ENG
Appointment of construction of a small administration block, 2 x grade R classrooms, guard house, erection of fence, completion of the multi- purpose classroom, nutrition centre, 2 x 3 classroom blocks, conversion of 1 x 3 classroom block into hall and external works at Leboeng Primary School located in Leboeng Village in Sekhukhune District, Limpopo Province grade 7 GB and Above 2019-01-30 12:00 EDDP 184/57B

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Two types of Joint Ventures and Joint Venture agreements 

By W van Rooyen

www.howtotender.co.za

The structure of the joint venture should set out the nature of your partnership. There are two main types of agreements:

  1. If the joint venture is a business in its own right, it will be an incorporated joint venture. This type is not... Read More
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