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.
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)

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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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