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.
Supply of Red Hat Enterprise Linux Maintenance and Support for thirty six (36) months. 2018-09-06 11:00 RFB 1781/ 2018
Supply Plumbing tools (specification will be available on request) 2018-08-24 11:00 ZNQ 095 2018/ 19
The appointment of a panel to supply ICT hardware 2018-09-06 12:00 RFP013/ 2018
Supply Plumbing materials (specification will be available on request) 2018-08-24 11:00 ZNQ 096 2018/ 19
Lease of the cottage with a portion of municipal land (±1. 7138 ha) situated on a remainder of portion 13 of the Farm Long Valley No.15, Dassieshoek, Robertson 2018-09-14 12:00 48/ 2018
Request for the provision of services to department of planning, monitoring and evaluation (DPME) to support, maintain and enhance the web-enabled local government management improvement model (LGMIM) assessment tool and technical/content advisory services for a period of 12 months with the option to extend the contract for an additional 24 months. 2018-09-07 11:00 RFB 1785/ 2018
Alienation of various available erven 2018-09-14 12:00 49 /2018
Tenders are hereby invited for the Supply, Delivery, Installation and maintenance of Photocopier machines for a 5 Year Operational Lease and Maintenance Agreement. 2018-09-07 11:00 Tender 3/ 2018 (PUR 401/ 9)
Supply , Deliver and Offload Protective Clothing for Land Care. 2018-09-06 11:00 ZNB 4266/ 18A
Supply of Equipment and Software (Shipment and Delivery), Equipment Installation, Configuration, VM Migration and Project Management and 5-year Support and Maintenance. 2018-09-07 11:00 SCMU3- 18/ 19- 0121- HO
Supply, delivery , Offload and installation of Two Center Pivot for Hlubi project at Alfred Duma (Ladysmith) Uthukela District. 2018-09-06 11:00 ZNB 4270/ 18A
Phototherapy (Puva)/ Narrow Band UVB 2018-08-28 11:00 ZNQ NO.5882/ 04/ 18
Slimroll Hand Towel Sheet Size 200mm X 155m to Fit Kimberley Clark Slimroll Hand Dispensers. 2018-08-28 11:00 ZNQ NO.5565/ 03/ 18
Supply, delivery, Offload and installation of Irrigation at Block 1 Mbonwa Irrigation scheme at Umuziwabantu Local Office Ugu District. 2018-09-06 11:00 ZNB 4269/ 18A
Portable Rebound Tonometer 2018-08-28 11:00 ZNQ NO.2303/ 07/ 18
Appointment of a service provider for the Landcare alien weeds and bankrupt bush control projects. 2018-09-07 11:00 GT/ GDARD/ 114/ 2018
Heat & Moisture Exchanger for Attachment to a 15mm Connector, with Oxygen Supply Port 2018-08-28 11:00 ZNQ NO.2148/ 07/ 18
Supply Paper photocopy white bond 80GSM A4 X 3000 reams 2018-08-24 11:00 ZNQ 436/ 18
A Simple System for Accurate Intra Abdominal Pressure Monitoring In Criticallly Ill Patients. 2018-08-28 11:00 ZNQ NO.1863/ 07/ 18
Supply and delivery of frozen chicken products and frozen fish products to the Red Cross War Memorial Children’s Hospital for two years (24 month) contract period with an option to extend the contract for a further 1 year (twelve months) based on performance. 2018-09-14 11:00 RCCH04/ 2018

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