Issue Date: 
Thursday, October 31, 2019

Is it compulsory to sub-contract part of the tender?

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

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 which came into effect on 1 April 2017.  Many entrepreneurs ask us whether they should sub-contract or not, when responding to a tender.

Regulation 9 of The Preferential Procurement Regulations 2017, stipulates the following:

  1. 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.
  2.  The Organ of State must advertise this specific tender condition that the successful bidder must sub-contract at a minimum of 30% (of the value of the contract) to (one or more) to an EME or QSE which is at least 51% owned by:
    1. black people;
    2. black people who are youth;
    3. black people who are women;
    4. black people with disabilities;
    5. black people living in rural or under develop areas or townships;
    6. black people who are military veterans;
    7. A cooperative which is at least 51% owned by black people;
  3. In paragraph 3 of Regulation 9 it also states that the Organ of State must make available the list of all suppliers registered on a database approved by the National Treasury to provide the required goods or services in respect of the applicable designated groups mentioned above from which the bidder must select a supplier.

Regulation 9 is very clear because its states “the tenderer MUST sub-contract…” Thus, according to the Regulations all contracts with a value of R30 million and above will have to comply with this Regulation.  Read the tender document carefully because somewhere in the tender document it will stipulate whether the bidder will have to sub-contract.  Follow those rules.  If the tender document does not contain any sub-contracting instructions, then it is not necessary to sub-contract.

The fact is that the tender document will dictate what you should or should not do.  Read the tender document carefully, follow the instructions precisely and to the point.

To learn more about this and 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.

Title Closing Date Tender No.
Supply and deliver 90 000 corrugated carton boxes (grade cc) and 90 000 corrugated inner pads (grade cc) 2021-02-19 11:00 B/ WCED 2899/ 20
Appointment of NPOs for the Community Work Programme (CWP) for a period of twelve (12) months. 2021-02-12 11:00 COGTA (T) 17/ 2020
Terms of reference of the technical data assistant for the African Union Governance Campus Project 2021-02-11 11:00 APRM/018/SIDA/DAGC/2021
Provision for Career Guidance Coordination Services 2021-01-29 13:00 EWSETA/RFQ/92/2020
Appointment of a Service Provider For Procurement Of An Audit Management Software 2021-01-29 11:00 SD15/ 2020
Appointment of a Service Provider To Supply, Deliver, Install And Maintain Generators To Various Ditsong Museums Of South Africa 2021-02-12 11:00 DMSA 014/ 2020
Appointment of a Panel of Arts, Cultural And Heritage Practitioners To Develop and Implement Arts, Cultural and Heritage Activities (Public Programmes) At Ditsong Museums Of South Africa for A Period Of 36 Months (Three Years 2021-02-12 11:00 DMSA 001/ 2020
Appointment of a Suitable, Qualified and Competent Service Provider (Buyer) to Manage The Design, Manufacturing and Production of Retail-Ready Merchandise For Dmsa Museum Shops 2021-02-12 11:00 DMSA 010/ 2020
Appointment of an Experienced Ict Accredited Service Provider To Make Provision For Servers, Migration of Data (To O365), Data Backups, Datacentre Controls, Email Hosting, Hosted Pabx and Email Archiving For Ditsong Museums of South Africa (DMSA) 2021-02-12 11:00 DMSA 009/ 2020
Disposable Face Masks 2021-02-19 11:00 0010444247
Rendering of A Cremation and Burial Service Of Pauper and Destitute Decedents For Western Cape Government: Department of Health For a Period Of Three (3) Years 2021-02-19 11:00 WCGHSC 0246/ 2020
Limited (Sanral) Invites Tenders For The Reseal And Overlay On National Route N4 Section 11 And 12 Between Rebecca Street (Km 10.0) And Pelindaba (Km 11.29). 2021-02-19 11:00 SANRAL N.004- 112- 2017/ 1R
Appointment of a panel of training providers for provision of training, skills development programmes for in Pretoria, Durban and Cape Town for a period of three (3) years 2021-02-19 11:00 PO 2020/ 21: 001
Supply, install and configure a Next Generation Firewall (NGFW) and a Unified Threat Management (UTM) End to End Managed Service to Statistics South Africa (Stats SA) for a period of thirty-six (36) months 2021-02-12 11:00 RFB 2348/ 2020
Appointment of a Service Provider to conduct anti - corruption survey in Local Government for 97 Municipalities. 2021-02-12 11:00 RFP: 003/ 01/ 2021
Appointment of a Service Provider for a Provision of Employee Wellness Services programme to the Special Investigating Unit (“SIU”) for a period of three years (3) with an option to renew for a further period of two (02) years 2021-02-12 11:00 RFP: 002/ 01/ 2021
Panel Of Recruitment Agency 2021-02-12 12:00 SAT 186/ 21
Appointment of a Service Provider for the Provision Of Customised All-Risk Commercial Insurance Services At South African Tourism (Sat) Head Offices In 90 Protes Road, Chislehurston, Sandton for a period of thirty-six (36) months 2021-02-15 12:00 SAT188/ 20
The South African Social Security Agency hereby invites Service Providers for the change management capability 2021-02-12 11:00 SASSA: 55- 20- CEO- HO
South African Civil Aviation Authority (SACAA) currently want to invite a firms of attorneys to submit proposals to enable them to be considered in the process of appointment of the SACAA panel of attorneys 2021-02-12 11:00 SACAA/ PA/ 0005/ 2020- 2021

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When to choose a Joint Venture, Consortium or Sub-contracting

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

Many people ask us: how do you decide between using a Joint Venture, a Consortium or Sub-contractor in responding to a... Read More

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