Issue Date: 
Tuesday, July 31, 2018

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 are 3 sub-contracting rules in the Preferential Procurement Regulations 2017 that Organs of State can/must apply when issuing tenders to the general public.

The first Regulation is Regulation 4 which state inter alia: if an Organ of State decides to apply pre-qualification criteria to advance certain designated groups that Organ of State must ADVERTISE the tender with a specific tendering condition that certain bidders can or may respond.

The second Regulation is Regulation 9 which state inter alia: if it is feasible to sub-contract for a contract above R30 million, an Organ of State must apply sub-contracting to advance designated groups.

The designate groups mentioned in both Regulation 4 and 9 are Black Owned Enterprises with 51% or more black ownership and any of female Black owned, youth black owned, black people with disabilities owned or black military veterans owned enterprises.

The third sub-contracting rule has to do with sub-contracting after the award of the tender. Regulation 12 states inter alia: (3) a person awarded a contract may not subcontract more than 25% of the value of the contract to any other enterprise that does not have an equal or higher B-BBEE status level of contributor than the person concerned, unless the contract is subcontracted to an EME that has the capability and ability to execute the subcontract.

The tender document will dictate how you should or should not sub-contract. Read the tender document carefully; follow the instructions precisely and to the point. Organs of State are applying these Regulations rigorously and failing to comply will lead to your tender response being disqualified.

Tender trends and Regulations are changing frequently. To keep up to date with these changes we recommend attending one of our How-to-Tender workshops that are presented across South Africa. Tender Workshop dates are published on our website at www.how2tender.com or for more information on the How-to-Tender workshops please email us at werner@how2tender.com

This article was written by Werner van Rooyen, Director of HowToTender which specializes in tender consulting and tender training.

Title Closing Date Tender No.
Colostomy Bags for infant x 20 Boxes 2018-10-26 11:00 ZNQ 426/ 2018
Colostomy Bags for new born x10 boxes 2018-10-26 11:00 ZNQ 373/ 2018
Safety Intravenous cannula with introducer needle and needle lock device 18G , 1.3 x 45mm , 100ml/Min ( 50/Box ) 2018-10-26 11:00 ZNQ 80- 2018/ 19
Supply, Install & Commission Three New Domestic Calorifiers as per specification. 2018-10-30 11:00 ZNQ NO.3072/ 09/ 18
Ent Ear Duckball Elevator Curved 2.2mm Blade, 14cm Length 2018-10-30 11:00 ZNQ NO.2474/ 08/ 18
Quik Fil Filling Adaper. 2018-10-30 11:00 ZNQ NO.2404/ 08/ 18
Mepitel Mesh Dressing With Safety Technology 20 X 31cm. 2018-10-30 11:00 ZNQ NO.1848/ 07/ 18
Glucometer Sticks For The Gluco Sure Autocode 2018-10-30 11:00 ZNQ NO.1805/ 07/ 18
Argyle Thoracic Catheter Drain 40fr 2018-10-30 11:00 ZNQ NO.734/ 05/ 18
Rendering, Manufacturing, Repairing, Fitting and Supplying of Aids for Orthotic and Prosthetic Services to Institutions in the Eden and Central Karoo District Under Western Cape Government the Department of Health for a three year Period 2018-11-16 11:00 WCGHCC031/ 1/ 2018
Ethibond Suture Gauge 5. 2018-10-30 11:00 PSH 373/ 1819
Fluid Administrative Giving Set - High Capacity 2018-10-30 11:00 PSH 856/ 1819
Intravenous Catheter (Cannula & Needle) 2018-10-30 11:00 PSH 672/ 1819
Feeds-Tpn Contracts For 3 Years 2018-10-30 11:00 PSH 962/ 1819
Surgiflo Haemostatic Matrix Plus Flexitip Size: 12ml Syringe 2018-10-30 11:00 PSH 829/ 1819
Intravenous Catheter (Cannula & Needle) 2018-10-30 11:00 PSH 957/ 1819
Surgical Stockings Small 2018-10-30 11:00 PSH 259/ 1819
Intravenous Catheter (Cannula & Needle). Size : 16g. 2018-10-30 11:00 PSH 671/ 1819
Butterfly Needle 18g -Neonate/Paeds. 2018-10-30 11:00 PSH 709/ 1819
Percutaneous Tracheostomy Kits Cuffed. 2018-10-30 11:00 PSH 625/ 1819

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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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