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.
Weighted Polyurethane Nasogastric Tube. 2018-11-27 11:00 PSH 1055/ 1819
Scrub Suits - Various Sizes 2018-11-27 11:00 PSH 1069/ 1819
Mankwe Trainning College(Mogwase) Installation & Connection to a Backup Generator Set to Academy and Provisioning of Lightning Conductor (Proffesional Servce Type: Electrical Engineering Works - Building) 2018-12-14 11:00 MMB 2019/ 027 EC
Combi Steam Industrail Oven 20 Trays Including Installation 2018-11-28 11:00 ZNQ: 469 / 2018/ 19
Electric Ring Cutter 2018-11-27 11:00 PSH 1046/ 1819
Supply, Delivery, Installation, Support, Maintenance, Commissioning and Training of Audio-Visual Equipment for all Classrooms, Lecture Halls and SImlab at the Western Cape College of Nursing, (WCCN) Metro West Campus (Athlone) for the Department of Health for a three (3) year period 2018-12-14 11:00 WCGHSC0179/ 2018
Appointment of a suitable service provider to Supply, Install and Configure eMail cleansing services to SITA and its clients for a period of two (2) years 2018-11-30 11:00 RFB 1846/ 2018
Data Storage Upgrade - Supply, Delivery, Installation and Configuration 2018-12-07 11:00 RFT- 2- 2018/ 19
The RAF hereby invites service provider for rental of document scanners for a period of five (5) years. 2018-12-14 11:00 RAF 2018/ 00052
Construction of a New Replacement Umyezo Wama Apile Primary School, Overberg. 2019-01-17 11:00 S103/ 18
Appointment of a Contractor for the Refurbishment and Construction of New Infrastructure In Magudu Combined School Situated In Magudu Village In Nkomazi Local Municipality At Ehlanzeni District Municipality, Mpumalanga. 2018-12-06 11:00 CONMP 0009 (2018/ 2019)
Pretoria: Service, Repairs and Maintenance of Air Conditioners at Pretoria Central Magistrate Court for period of 24 months 2019-01-08 11:00 PT18/ 041
Pretoria: Service, Repairs and Maintenance of Air Conditioners at SAAF HQ Loftus building for period of 24 months 2019-01-08 11:00 PT18/ 042
Supply and delivery of four (4) clover high-purity germanium detectors and two (2) BGO (Bismuth Germanate) suppression shields for the Department of Subatomic Physics at iThemba Labs, Faure, Cape Town over a two year period 2018-12-10 11:00 NRF/ iThemba LABS/ 2018 - 19: 07
Pretoria: Service, Repairs and Maintenance of Air Conditioners at Department of Labour: Laboria House for period of 24 months 2019-01-15 11:00 PT18/ 048
Repairs and Renovations to entire building at Acacia Court, Empangeni, Department of Human Settlement. 2018-12-14 11:00 ZNTU 03427 W3
Supply smartcards for the Biometrics Access Control System (BACS) to KZN Provincial Treasury. 2018-12-07 11:00 RFB 1842/ 2018
Construction of a borehole and erecting of a new galvanised elevated storage facility at Ngudwini Clinic, Eshowe 2018-12-07 11:00 ZNTU 03409 W
The appointment of a service provider to develop, supply, deliver, install and maintain electronic security systems at 184 Jeff Masemola Street and South Block (National Office) of The Department of Rural Development and Land Reform. 2018-12-06 11:00 5/ 2/ 2/ 1- RDLR 0049(2018/ 2019)
Construction of a borehole facility at Ocilwane Clinic, Empangeni 2018-12-14 11:00 ZNTU 03410 W

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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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