Issue Date: 
Thursday, October 31, 2019

Sub-contractors versus Consortiums and Joint Ventures

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

The Preferential Procurement Regulations, 2017 states that, if it is feasible, 30% of all Government Contracts above R30 million must be sub-contracted to specific categories of SMME’s.  These SMME’s include, but are not limited to, black female owned and black youth owned businesses.

To help with the confusion that arises from whether one must form a Joint Venture, Consortium or sub-contractor/contractor relationship when responding to a tender it is always good to understand the definition of these types of business relationships:

  • A sub-contractor/contractor relationship arises when a main contractor hires or employs additional businesses or persons outside of the main contractors own business to do work or to deliver services as part of a larger project.  The important thing to remember is that the main contractor is in charge and must ensure that the project is executed and completed as stipulated in the contract.
  • A consortium is an association of two or more individuals, companies, or organisations with the objective of participating in a common activity, such as responding to a tender, or pooling their resources to achieve a common goal.  Within the consortium, each participant retains their separate legal status and the consortium’s control over each participant is limited to activities involving the joint endeavour, particularly the division of profits.  A consortium is formed by contract.
  • A Joint Venture can be described as a business enterprise where two or more participants come together to share their expertise to win a specific contract for a set period.  A Joint Venture is a separate entity and is not part of the individual participant’s own enterprise.  Therefor a Joint Venture must have its own set of rules by which it is managed, and this is called a Joint Venture Agreement.

To become a sub-contractor, you will have to have a running business.  Main contractors will only use dependable sub-contractors with a proven track record.

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.
Outright Procurement Of HPE Storage, Storage, Blade Servers And Vmware Licences. 2020-10-30 11:00 RFB 023/ 20/ 21
Supply and delivery of Cleaning material and Toiletries to Goodwood Management Area for period of 24 months. 2020-11-02 11:00 WCR 2/ 2020
LGE 2021 Registration Weekend T-Shirts 2020-11-27 11:00 0010440599
The objective of this bid is to request Property Management Companies/Owners who specialize in leasing of office space to submit proposals to the W&RSETA for the W&RSETA North West Regional Office 2020-11-13 11:00 COO/ 2020/ 0022
The objective of this bid is to request Property Management Companies/Owners who specialize in leasing of office space to submit proposals to the W&RSETA for the W&RSETA Limpopo Regional Office 2020-11-13 11:00 COO/ 2020/ 0021
Supply and maintenance of electronic student assessment and placement tool to all Westcol campuses for a period of 24 months. 2020-11-13 11:00 WT2020/ 0004
The South African National Roads Agency SOC Limited (SANRAL) invites tenders for the provision of Consulting Engineering Services for the Improvement on National Road R30 Section 9 from Ventersdorp (km 0.0) to (km 29.0) 2020-11-24 11:00 SANRAL R.030- 090- 2020/ 1F
The South African National Roads Agency SOC Limited (SANRAL) invites tenders for the provision of Consulting Engineering Services for the Improvement on National Road R54 section 1 from Potchefstroom (km 0.0) to NW/GP Border (km 41.60). 2020-11-24 11:00 SANRAL R.054- 010- 2020/ 1F
The South African National Roads Agency SOC Limited (SANRAL) invites tenders for the provision of Consulting Engineering Services for the Improvement on National Road R30 Section 8 from Klerksdorp (km 0.0) to Buffelsvallei (km 37.0) 2020-11-24 11:00 SANRAL R.030- 080- 2019/ 1F
Appointment of a Public Relations Agency for UK and Ireland 2020-11-16 12:00 SAT UK 001/ 20
CO/063/10/2020 -Establishment of investigation panel for a period of three (3) years 2020-11-27 11:00 CO/063/10/2020
Provision of soft skills training for a period of three (3) years 2020-11-27 11:00 CO/062/10/2020
Provision of management/supervisory staff training for a period of three (3) years 2020-11-27 11:00 CO/061/10/2020
Preferred suppliers of communication and marketing support services for a period of three (3) years 2020-11-27 11:00 CO/060/10/2020
The South African National Roads Agency SOC Limited (SANRAL) invites tenders for the improvement of National Road R510 sections 1 and 2 from North West / Limpopo Border (km 72,0) to Bierspruit (km 6,3) 2020-11-20 11:00 SANRAL R.510- 012- 2016/ 1
Request for bid for the Provision of a Wellness Programme for a Period Of Twelve Months Renewable Annually up to a Maximum Period Of Thirty-Six (36) Months 2020-11-13 11:00 SAHPRA/ 2020/ WELLNESS/ RFB003
Appointment of a service provider to host and maintain SASSETA’s website and intranet for a period of three (3) years from date of appointment 2020-11-16 11:00 RFP/ SASSETA/ 20211109
Appointment of an Internal Audit Service provider for a period of three (3) years 2020-11-16 11:00 RFP/ SASSETA/ 20211107
The Road Accident Fund (RAF) requires appoint a service provider to provide Second (2nd) Line IT Support for Customer Service Centres (CSC)s, Hospital Service Centres (HSCs), Walk-In-Centres (WC) at RAF Offices for a period of three (3) years 2020-11-23 11:00 RAF/ 2020/ 00016
Appointment of a service provider to review and develop the Safety Permit Fee Model for a period of two (02) years. 2020-11-13 12:00 RSR/ RFP/ RS/ SPFM/ 20/ 10/ 06

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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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