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.
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
Civil Package 4: Boschrand Dam and Watercourse Upgrade 2018-10-16 12:00 N1T0052
Maintenance: Fire Detection and Suppression System 2018-09-27 11:00 287025
Quotation for the appointment of two or more training service providers to facilitate, assess and moderate the accredited problem-solving and decision-making three-day course and portfolio of evidence of 20 learners per programme for the unit standard ID number 242817, NQF level 4, as and when required.Proof of accreditation for unit standard ID number 242817 must be provided. 2018-09-25 10:00 Q04-2018/19 RE-ADVERT
As and when supply and delivery of diesel to Umjantshi House, Shosholoza Meyl Junction, Gauteng Nerve Centre and PRASA House for a period of 12 month. 2018-09-25 10:00 RFQ/O8/09/06/2018
Supply and refurbishment of Sulzer pumps and spares at Kriel Power Station for a period of 3 years. 2018-10-04 10:00 MPGXC005314
Request for quotation for appointment of a principal agent to design and supervise access road repairs at the Sentech’s De Aar and Queenstown transmitter sites. 2018-09-26 12:00 SENT140918/Road-Cons
Supply & Delivery of Water & Sewer Pipes and Fittings (2year rates tender) 2018-10-04 10:00 PROC 10/2018
Proficiency testing. 2018-09-28 23:00 OLT1126042
Supply and delivery of various valves on an as and when required basis for a period of five (5) years. 2018-10-01 14:00 MAT00312
Service fire sprinkler system and hydrants. 2018-10-01 12:00 KZN/CRES/08/2018/015/Q
Re-advert: Appointment of registered insurance broker for short-term insurance portfolio for a period of three years. 2018-10-02 09:00 RLM/BTO/123/2017/18
Supply & Delivery of Materials for Water Connections to Drakenstein Municipality (2year rates tender) 2018-10-04 10:00 PROC 09/2018
Consultancy Services - Designing a Programme for Renewable Energy Development in African Island States (REAIS) 2018-10-19 15:00 AUC/IED/C/378
Supply & deliver thermal imager, hygrometer & clamp meter. 2018-10-01 15:00 PR 10286501
Supply and delivery of laboratory consumables for a period up to 30 June 2019 2018-09-27 10:00 CES 22/2018
For the supply and delivery of alcoholic beverages and non-alcoholic beverages to the Blue Train for a period of 12 months on an as and when required basis or once (the quantity stipulated is purchased). 2018-10-02 10:00 ERACES4660-27979
The provision of maintenance and support services for the train cab system back office system on the Transnet Freight Rail Coal line for a period of 3 years. 2018-10-02 10:00 ERAC OGS SG540-26849
Supply and delivery of semi rigid asphalt with conventional open graded asphalt (popcorn mix) to Maydon Wharf. 2018-10-02 10:00 CRAC DNR 27853

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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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