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: Mgovuzo Primary School: Gingindlovu: Replacement of Perimeter Fencing 2018-12-20 11:00 ZNTD 04652W
Justice: Estcourt Court: 36 Months Cleaning and Hygiene Service. Preference points scoring system applicable is 80/20. 2018-12-11 11:00 DBN18/ 10/ 04
Department of Education: eThekwini Region: Mangqakaza Primary School: Gingindlovu: Replacement of Perimeter Fencing 2018-12-20 11:00 ZNTD 04651W
The Supply and Delivery of Building Material to the Department of Defence (North West) for a Period of Three (03) Years. 2018-12-14 11:00 CPSC- B- PC- 036- 2018
Rendering of a Sanitary Service for period of two years (24 months) on firm price for all our offices (Provincial Office: BFN, Bloemfontein, Botshabelo, Thaba Nchu, Welkom, Virginia, Kroonstad, Sasolburg, Parys, Phuthaditjhaba, Bethlehem, Reitz, Herrismith, Zastron & Petrusburg Labour Centres. 2018-12-07 11:00 FSDOL 08/ 2018
Rendering of Sanitary Services at South African Army Main Ordinance Depot for a Period of Two (02) Years. 2018-12-19 11:00 CPSC- B- PC- 046- 2018
Department of Education: eThekwini Region: Mandlalathi Primary School: Greytown: Replacement of Perimeter Fencing 2018-12-20 11:00 ZNTD 04676W
Supply, delivery and installation of 4 x 65 000 WH lithium iron battery back-up system for MBIZANA RED Hub. 2018-12-07 11:00 SCMU 07 – 2018/19
Department of Education: eThekwini Region: Hlangabeza High School: Maphumulo: Replacement of Perimeter Fencing 2018-12-20 11:00 ZNTD 04666W
Department of Education: eThekwini Region: Isibanisezwe Secondary School: Stanger: Replacement of Perimeter Fencing 2018-12-20 11:00 ZNTD 04674W
The provision of automatic voltage conditioner (AVC) and power factor correction (PFC) installation at AgriZone. 2018-12-10 11:00 DTP/ RFP/ 26/ AGZ/ 10/ 2018
Department of Education: eThekwini Region: Lloyd Primary School: Stanger: Replacement of Perimeter Fencing 2018-12-20 11:00 ZNTD 04669W
Servicing of air conditioning, ventilation system. 2018-11-26 11:00 ZNQ 778/ 18- 19
Department of Education: eThekwini Region: Intaphuka Primary School: Verulam: Replacement of Perimeter Fencing 2018-12-20 11:00 ZNTD 04657W
The Supply and Delivery of Building Material to the Department of Defence (Western Cape) for a Period of Three (03) Years. 2018-12-14 11:00 CPSC- B- PC- 042- 2018
The Province of KwaZulu-Natal, Department of Transport, invites tenders from Established Contractors, experienced in Bridges, and earthworks construction, for the construction of Mahambuma River Bridge No.3524. The duration of the project will be 8 months. The Established Contractor shall be registered in CIDB contractor grading designation 7CE or higher. 2018-12-13 11:00 ZNT 3342/ 18T
Department of Education: eThekwini Region: Emkhambeni Primary School: Tongaat: Replacement of Perimeter Fencing 2018-12-20 11:00 ZNTD 04664W
The Supply and Delivery of Building Material to the Department of Defence (Mpumalanga) for a Period of Three (03) Years. 2018-12-14 11:00 CPSC- B- PC- 037- 2018
Department of Education: eThekwini Region: Esiqhoqhweni Junior Primary School: S183 Sindi: Replacement of Perimeter Fencing 2018-12-20 11:00 ZNTD 04673W
The Supply and Delivery of Building Material to the Department of Defence (Limpopo) for a Period of Three (03) Years. 2018-12-14 11:00 CPSC- B- PC- 035- 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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