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.
Supply of Services to Repair Traffic Signals and Associated Equipment within the Breede Valley Municipality 2018-09-27 11:00 288145
Consultancy services for SAP grant management implementation support 2018-10-05 15:00 ET-AUC-78675-CS-QCBS
Supply and Delivery of VBTS Collimator Insulating Piece. 2018-09-25 11:00 Themba LABS – RFQ/2018/19:84
Supply, delivery and Laying of Tiles 2018-09-28 11:00 280918
Procurement of Bus Services for Spring Schools – 4 x 30 Seater Buses. 2018-09-25 11:00 iThemba LABS – RFQ/2018/19:92
Supply and delivery of optic fibre cables at Empangeni once off. 2018-09-25 10:00 ERAC EMU 27571 BD 267
Consultancy service to carry out targeted research on online child sexual exploitation (OCSE) in Africa 2018-10-05 15:00 AUC /SAD/C/365
Provision of cleaning services at various buildings in Pretoria (Koedoespoort) for period of Seven (7) months. 2018-09-25 10:00 ERACKT 4679 - 27937
Supply, delivery and Installation of Glass and Latches for Windows and a Stacking Folding Door 2018-09-28 11:00 270918
Appointment of a preferred list of suppliers to conduct Airborne Magnetic Gradiometer and Radiometric Surveys for the Council for Geoscience for a period of three (3) years. 2018-10-16 11:00 CGS-2018- 027A
Scuff – Sanding, Seal and Finish of Wooden Floor and Stage of Town Hall 2018-09-28 11:00 290918
Supply and delivery of Galvanised Poles. 2018-09-26 11:00 288080
Reverse circulation drilling on the premises of Nkomati Mine. 2018-10-01 13:00 NKG E 008/2018
Interested parties are invited  to submit proposals covering technical & financial aspect relating to the following field: Diamond Transport & Security. 2018-10-10 11:00 SDT84/2018-1S
Consultancy Service to Assist the Department of Trade and Industry on the Implementation of the SMEs Strategy 2018-10-05 15:00 AUC/DTI/C/127
Provision of Directional Drilling Services within the Breede Valley Municipal Area. 2018-09-26 11:00 288679
Supply and delivery of 137cm Hotellier Double Bed Set or Equivalent 2018-09-27 11:00 288526
Stellenbosch University (SU) is hereby requesting tenders from businesses with relevant experience and qualification for the management of the SU’s healthcare consultancy service. 2018-10-05 12:00 SU/T9I/20I8
Provision of Firefighter Medical Surveillance Programme From Sept 2018- June 2019 2018-09-27 11:00 288450
Professional Service for the Construction of a New Student Residence at the Soweto Campus, for the University of Johannesburg. 2018-10-08 12:00 RFP UJ 32/2018

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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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