Issue Date: 
Tuesday, August 7, 2018

Local content calculation in tenders

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 very 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 don't know whether or not it is applicable to them. We understand the Local Content criteria and documents.

If you want to know more about Local Content contact us to find out when our next Local Content workshop is taking place in your area.
werner@how2tender.com

This article was written by Werner van Rooyen, Director of HowToTender which specializes in tender consulting and tender training. (04/05/2018)

1.  Definition of "designated Sectors" as per SBD document 6.2.

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:

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