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.
Professional service provider to render cash collection services for a period of thirty six(36) months 2021-03-25 11:00 LNM003/2019/2020
Supply and delivery of Hand Held GPS for GIS data 2021-03-05 11:00 OLT1245730
Supply and delivery of an industrial video-scope 2021-03-25 12:00 2021/030
Appointment of civil engineering consultant and contractor for the upgrading of internal street from gravel to tar zone s ward 16 (turnkey project) 2021-03-30 11:00 LNM002/2020/21
Tarring of internal streets in Unit B 2021-03-31 11:00 LNM 001/2020/21
Training on mental illness / wellbeing management in the workplace 2021-03-08 11:00 No reference number
Proposals for the cost of supply study to determine electricity tariffs in accordance to National Energy Regulator of South Africa (NERSA) 2021-03-16 12:00 MKHO29/2020/21
Supply and delivery of ICT equipment 2021-03-26 11:00 LNM0034/2020/21
Metrorail Customer Services Uniform 2021-03-05 16:00 10319794
Professional service provider for provision of printing services for a period of 24 months 2021-03-29 11:00 LNM044/2020/21
Appointment of Service Provider to develop a Pricing Model for SENTECH’s Products and Services 2021-03-12 12:00 SENT/040/2020-21
Supply and delivery a trailer mounted high pressure drain cleaning jetter machine at facilities depot. 2021-03-01 12:00 JET-MACHINE/02/2021
Provision of satelite systems (VSAT) and LAN network system for Phelophepa trainset 1 & 2 for Salt River Coach Business and Covid-19 vaccination trainset for Koedoespoort Coach Business 2021-03-16 10:00 TE21-KLP-8HB-00135
Borehole drilling at Kaapmuiden 2021-03-01 12:00 BOREHOLE/03/2021
Procurement Of 2 Server For The Department Of Military Ombudsmen. 2021-03-02 11:00 RFQ 4034-AH-2020
Supply Installation and Integration of Wireless Communication System for Television & Radio Broadcast Facilities 2021-03-22 12:00 RFP/TVO/2021/2
supply and delivery of TSI pump Calibrators for Operation and maintenance of continuous ambient air quality Monitoring Station 2021-03-10 11:00 DPEMS-E60/2020/2021
Refurbishment of Sefako Makgato fire station 2021-03-15 11:00 COR-A57/2020/2021
Supply and delivery of class II type A2 biological safety cabinets for Forensic Pathology Service, Western Cape 2021-03-26 11:00 WCGHCC104/2020
Administration and management of disaster management volunteers 2021-03-26 11:00 COMM-D15/2020/2021 (Re-advert)

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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