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: eThekwini Region: Thukela Secondary School: Mandini: Replacement of Perimeter Fencing 2018-12-20 11:00 ZNTD 04655W
Vredenburg: New office Accommodation for SASSA: Area of 415.63m2, 10 Undercover & secured parking bays for a 3 years period. Category C. 2018-12-07 11:00 CPTL35 / 18
Department of Education: eThekwini Region: Sundumbili Senior Primary School: Sundumbili: Replacement of Perimeter Fencing 2018-12-20 11:00 ZNTD 04654W
The Supply and Delivery of Building Material to the Department of Defence (Eastern Cape) for a Period of Three (03) Years. 2018-12-14 11:00 CPSC- B- PC- 041- 2018
Department of Education: eThekwini Region: Sizani Primary School: Umhlali Beach: Replacement of Perimeter Fencing 2018-12-20 11:00 ZNTD 04671W
Beaufort West: New office Accommodation for SASSA: Area of 538.54m2, 10 Undercover & secured parking bays for a 3 years period. Category C. 2018-12-07 11:00 CPTL43 / 18
Department of Education: eThekwini Region: Sotobe Secondary School: Verulam: Replacement of Perimeter Fencing 2018-12-20 11:00 ZNTD 04662W
Wynberg: New office Accommodation for SASSA: Area of 653.13m2, 12 Undercover & secured parking bays for a 3 years period. Category C 2018-12-07 11:00 CPTL37 / 18
Department of Education: eThekwini Region: ST. Cyprian Primary School: Sundumbili: Replacement of Perimeter Fencing 2018-12-20 11:00 ZNTD 04653W
The Supply and Delivery of Building Material to the Department of Defence (Free State) for a Period of Three (03) Years. 2018-12-14 11:00 CPSC- B- PC- 039- 2018
Department of Justice & CD: Lenasia, Meadowlands and JHB High Court: Rendering of gardening services for a period of 24 months. 2018-12-11 11:00 JHB.18/ 32
Department of Education: eThekwini Region: Ozwathini Primary School: Ndwedwe: Replacement of Perimeter Fencing 2018-12-20 11:00 ZNTD 04661W
The Supply and Delivery of Building Material to the Department of Defence (Northern Cape) for a Period of Three (03) Years. 2018-12-14 11:00 CPSC- B- PC- 038- 2018
Department of Education: eThekwini Region: Mpangele Primary School: Greytown: Replacement of Perimeter 2018-12-20 11:00 ZNTD 04670W
Justice: Mooi River Court: 36 Months Cleaning and Hygiene Service. 2018-12-11 11:00 DBN18/ 10/ 02
Department of Education: eThekwini Region: Mandlasonke Primary School: Mandini: Replacement of Perimeter Fencing 2018-12-20 11:00 ZNTD 04650W
Department of Education: eThekwini Region: Mandeni Primary School: Mandini: Replacement of Perimeter Fencing 2018-12-20 11:00 ZNTD 04649W
Department of Education: eThekwini Region: Mashiyamahle Secondary School: Ndwedwe: Replacement of Perimeter Fencing 2018-12-20 11:00 ZNTD 04659W
Justice: Pietermaritzburg Master Court: 36 Months Cleaning and Hygiene Service. Preference points scoring system applicable is 80/20. 2018-12-10 11:00 DBN18/ 10/ 05
The Supply and Delivery of Building Material to the Department of Defence (Kwazulu-Natal) for a Period of Three (03) Years. 2018-12-14 11:00 CPSC- B- PC- 040- 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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