Issue Date: 
Thursday, October 31, 2019

Local Content calculation in tenders

By Werner van Rooyen, Director of HowToTender (Pty) Ltd which specializes in tender consulting and tender training.

The National Government has introduced “designated sectors” which are sectors, sub-sectors or industries that have been designated by the Department of Trade and Industry in line with national development and industrial policies for local production, where only locally produced services, works or goods or locally manufactured goods meet the stipulated minimum threshold for local production and content1.

What is Local Content and how must we apply it in our tender responses?

Local Content is Local Value Added in South Africa by South African recourses.  Where a tender response contains a combination of local and imported goods and/or services, the tender price must be separated into its local and imported components as per the Standard Bidding Document 6.2

Where it becomes tricky is Annexure C, D and E that needs to be completed before Standard Bidding Document 6.2 can be completed.  Because little of tender responders read the tender document very carefully this requirement is overlooked.  This makes it exceedingly difficult to complete Standard Bidding Document 6.2.

It is important to know the sequence in which these annexures must be completed.  Completing it in the wrong sequence is going to lead to much frustration on the side of the bidder.

Please remember that you as bidder will be contractually required to maintain records to certify imported content, for example, invoice of materials, expenditure records and income statements.

It must be emphasized that when you respond to a tender you must ensure you know which goods and/or services you can claim as Local Content.  Be aware that certain tenders will exclude cost such as the following from Local Content:

  • finance charges;
  • property; and
  • Deployment fees of the operations contractor.

The designated sectors together with its minimum thresholds can be found at: http://www.thedti.gov.za/industrial_development/ip.jsp.

There is an increase in the drive from National as well as Provincial Government to promote Local Content.  This drive is not a South African initiative but a world-wide trend.  In a South African context, it is good because it stimulates internal growth of the economy.

Local Content is a difficult item in any tender.  Many bidders do not know whether it is applicable to them. 

How to Tender presents a “Specialised Local Content workshop” that teaches the bidder how to complete the Local Content Documents (SBD 6.2 and Annexures C, D & E) correctly. You can book and pay online at  https://howtotender.co.za/local-content-specialist/ 

To learn more about many other tender conditions attend our “Become a Tender Expert” 2-Day workshops presented in Johannesburg, Pretoria, Durban, Port Elizabeth, and Cape Town.  Book and pay online at https://howtotender.co.za/tender-expert-form/

Contact us at wernervr@howtotender.co.za should you require more information.

You can also purchase a Tender Manual (Handbook) on our website https://howtotender.co.za/ which is a step by step guide how to respond to a South African Tender.  It includes examples of completed SBD forms.

1.  Definition of “designated Sectors” as per SBD document 6.2.

Title Closing Date Tender No.
Appointment Of Service Providers For The Supply, Delivery and Off-Loading Of Bulk Metering Kiosks (Bmk) and Freestanding Bulk Metering Units (Bmu) On an as-and-When Required Basis From Date Of Award Until 30 June 2024. 2021-07-22 10:00 A-EE 04 - 2021
The Appointment of a Service Provider For The Supply Of Sip Terminals, Sip Trunk Services, Telephony Support Services of a Dedicated Hosted Multi-Tenancy Pbx & Ucc Platform As Well As Direct Internet Access (Centralised Breakout) on an as When Required Basis On From Date Of Award Until 30 June 2024 2021-07-21 10:00 A-ICT 03 - 2021
The Appointment of a Service Provider for The Supply, Installation, Support and Maintenance of The Fleet Tracking Units and Monitoring Data On as and When Required Basis From Date Of Award Until 30 June 2024 2021-07-21 10:00 A-ICT 04 - 2021
The appointment of a service provider for upgrading of ten (10) existing air quality monitoring stations: supply and installation of meteorological sensors and equipment, and particulate matter 2.5 (pm2.5) analysers from date of award until 30 June 2022 2021-07-09 10:00 A-HEA 04-2021
The appointment of Electrical Contractors for the Electrification Projects in City of Ekurhuleni on an as and when required basis from date of award until 30 June 2024 2021-07-19 10:00 A-EE 17-2021
The Appointment of Electrical Contractors For The Supply, Installation and Commissioning Of 25m Counter-Balanced Highmast Lighting Structures on an as-and-When Required Basis From Date of Award Until 30 June 2024. 2021-07-23 10:00 A-EE 05 - 2021
The Appointment Of Service Providers for the Testing, Fault Location, Repair and Maintenance Of Gas Filled and Oil Filled Underground Cable Networks From 33kv To 132kv on an as and When Required Basis From Date Of Award Until 30 June 2024. 2021-07-26 10:00 A-EE 10 - 2020
The Appointment of Electrical Contractors For The Repair and Maintenance Of Paper Insulated And Xlpe Underground Cable Networks From 33kv Up to 132kv and Associated Copper and Optic Fibre Pilot Cables on an and When Required Basis From Date Of Award Until 30 June 2024. 2021-07-26 10:00 A-EE 11 - 2020
Appointment Of Electrical Contractors for the Installation Of New Medium and Low Voltage Cables (Copper And Aluminium) and Equipment as well as Pilot Cables (Optic Fibre) For Planning and Construction Reticulation Projects on an as-And when Required Basis From Date Of Award Until 30 June 2024. 2021-07-23 10:00 A-EE 11 - 2021
Appointment of a Debt Sponsor, Panel of Dealers and Settlement and Paying Agent for the IDC Domestic Medium Term Note (DMTN) Programme 2021-06-28 11:00 T24/06/21
Appointment of CIDB grading 1EB to 3 EB contractors for minor routine electrical maintenance of CoE buildings/facilities, property, plant, and equipment on an as and when required basis from date of award until 30 June 2024 2021-07-22 10:00 A-RE 01-2021
Appointment of electrical contractors with a CIDB grading of 4EB (including 3EB PE) to 9EB for electrical maintenance work in all CoE buildings/facilities, property, plant and equipment on an as and when required basis from date of award until 30 June 2024 2021-07-23 10:00 A-RE 05-2020
Appointment of service providers for distribution, putting-up and removal of printed material for various projects carried out by City of Ekurhuleni on an as and when required basis from date of award until 30 June 2024. 2021-08-12 10:00 A- CM 01-2021
Appointment of a Panel Of Specialist Forensic Investigation For the City Of Johannesburg for the Period Of Thirty Six Months (36 Months). 2021-07-09 10:30 A873
Provision of travel, accommodation and conferencing services 2021-07-09 11:00 CGET 02/2021/22
Provision of cleaning and hygiene services 2021-07-09 11:00 CGET 01/2021/22
Co-sourcing of internal audit activities 2021-07-09 11:00 CGET 03/2021/22
Request For The Provision Of Office Accommodation/Space For The Ugu District Municipality Budget & Treasury And Human Resources Units For A Period Of Thirty-Six (36) Months 2021-07-23 12:00 UGU-05-1565-2020
Service Providers To Form A Panel Of Medical Practitioners For uMgungundlovu District Municipality 2021-07-29 12:00 02/2021
Disposal/Auction Of Council Vehicle 2021-06-29 09:00 ZDMQ: 0122/06/2021

Pages

Who is the bidder or his or her representative?

By Werner van Rooyen, Director of HowToTender (Pty) Ltd which specializes in tender consulting and tender training.

In Organ of State tenders, the Standard Bidding Document 4 – Declaration of Inters – ask in paragraph 2.1 the following: “Full name of bidder or his or her representative... Read More

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