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.
The provision of occupational health and vaccination services to support current occupational health services rendered to employees of the City of Cape Town. 2018-10-16 10:00 77S/2018/19
Five (5) fridges for community halls 2018-09-20 12:00 118/2018/19
Cisco Ip Phones 7942 2018-09-21 12:00 Q09.09.18
Appointment of a Service Provider to Supply, Install, Repair and Maintain of the Access Control Systems and Equipment at Polokwane Municipal Premises on a Ad-Hoc Basis for period of three (3) Years. 2018-10-16 10:00 PM80/2018
Appointment of Service Provider to Reblade the Fire Breaks for a Period of Three(3) Years. 2018-10-16 10:00 PM64/2018
Supply and Delivery of Heavy Duty Rescue Hydraulics Equipment for a period of three(3) years. 2018-10-16 10:00 PM65/2018
Supply and delivery of 5 Cubic Metre Skips 2018-09-26 11:00 15/19 FQ
Supply and install a book detection system at the Franschhoek Library 2018-09-26 11:00 30/19
Hera watershed 275KV line ground clearance improvement -build 422A suspension tower between tower 86 and 87. 2018-10-16 10:00 PSCED0133
Supply and Delivery of Various IT parts 2018-09-20 12:00 119/2018/19
Ground maintenance services at Kayamandi Economic Tourism Corridor, Stellenbosch until 30 June 2019 2018-09-25 11:00 FQ/SM 4/19
Supply, delivery and construction of stock water systems in JTG. 2018-10-16 11:00 NC/DALC/1883
Supply, repair and fitment of tyres: Solid Waste Management 2018-09-26 11:00 FQ/SM : 16/19
Sighting, drilling and testing of 7 boreholes in JTG region. 2018-10-16 11:00 NC/DALC/1884
The provision of maintenance and refurbishment of all HV and LV motors for a period of 36 months at Camden Power Station. 2018-10-18 10:00 MPGXC004717R1
Accredited Firefighter 2 Training (Firefighter 2 course and Hazmat Operations) 2018-09-20 12:00 105/2018/19
The installation of new chlorine dosing systems and plant safety upgrade projects for a period of 08 months. 2018-10-18 10:00 MPGXC005325
Hiring, installation, servicing and cleaning of molok(s) 2018-09-27 11:00 FQ/SM : 14/19
Construction of Ntibane Water Supply. 2018-10-16 12:00 ORTDM SCMU 10-18/19
Construction of Ntsonyini off Channel Storage Dam. 2018-10-16 12:00 ORTDM SCMU 12-18/19

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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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