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.

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Title Closing Date Tender No.
Supply: Bricks 2017-09-25 14:00 A021800395
Supply and delivery of Programmable Paddle Jar Tester at Withoogte 2017-09-22 12:00 6/5/2/160
Professional Service Provider for Annual Report Layout, Design, Printing, Binding, Packaging and delivery 2017-10-26 12:00 2018/022
Accommodation for Msizi NQF 3 training around Ulundi 2017-09-21 12:00 ZDMQ: 0244/09/2017
Supply, Install and Commission of High Mast Lighting 2017-09-22 09:00 MAST-2017
Accommodation for Msizi NQF 3 training around Ulundi 2017-09-21 12:00 ZDMQ: 0245/09/2017
Supply: 1 each x supply rotor & stator. 4. Hd45m monopump 2017-09-20 14:00 A021800399
Supply and delivery of Laptop for Indonsa Art and Culture Ulundi 2017-09-21 12:00 ZDMQ: 0246/09/2017
Supply: Galvanised ladders 2017-09-20 14:00 A021800398
Supply and delivery of Indonsa Visual Arts Material 2017-09-21 12:00 ZDMQ: 0247/09/2017
Supply: 1 each x sisco gauge kit 2017-09-20 14:00 A021800401
Supply: 15 each x container rachets 2017-09-20 14:00 A021800405
Supply and delivery of motor grader for a period of 36 months 2017-10-06 12:00 CF/52/17
Supply: Hk100 overhead coupling 2017-09-20 14:00 A021800403
Supply and delivery of skip loader(s) for a period of 36 months 2017-10-06 12:00 CF/55/17
Supply and delivery of Indonsa Fashion Design Material 2017-09-21 12:00 ZDMQ: 0248/09/2017
Supply: 1 each x double row angular contact bearing-3316; 1 each x cylindrical roller bearing n 316 wc3 2017-09-20 14:00 A021800402
Maintenance Service and Repair of Civil and Electrical Infrastructure 2017-09-21 12:00 ZDMQ: 0250/09/2017
Supply Swagelok Tube Fitting 2017-09-25 14:00 A021800393
Supply and delivery of 6x4 hooklift for a period of 36 months 2017-10-06 12:00 CF/56/17

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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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