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.
Appointment of a service provider to maintain, enhance and hosting of website for Robben Island Museum (RIM) for a period of thirty-six (36) months 2020-02-14 11:00 RIM ICT 03- 2019/ 2020
The South African National Roads Agency SOC Limited (SANRAL) invites tenders for the improvement on National Route N2 Sections 14 and 15 from Green River (km 60) to Buffalo River bridge (km 3.2). 2020-02-14 14:00 SANRAL N.002- 145- 2012/ 1
The Road Accident Fund (RAF) requires rental of office space for the RAF Cape Town Branch for a period of nine (9) years and eleven (11) months. 2020-02-21 11:00 RAF/ 2019/ 00028
Appointment of a service provider to conduct Environmental impact assessment and Township establishment for Gauteng Industrial Development Zone (GIDZ) Springs SEZ 2020-02-10 11:00 GIDZ/ 07/ 2019- 20/ SPRINGSSEZ
Appointment of a service provider to procure, implement, commission and support hardware/ kiosk for self-service ticket sales for Robben Island Museum (RIM) for a period of thirty-six (36) months 2020-02-21 11:00 RIM ICT 02- 2019/ 2020
Appointment of a service provider to procure, implement, commission and support queue management system (QMS) for Robben Island Museum (RIM) for a period of thirty-six (36) months 2020-02-17 11:00 RIM ICT 04- 2019/ 2020
Request for informtaion (RFI) for the purpose of identifying vendors who have the capacity and experience to provide an options assessment and feasibility study for facilities management services to the Gauteng Industrial Development Zone SOC limited for the operations of the OR Tambo international Airport Special Economic Zone Precinct 1 2020-02-07 11:00 GIDZ/ 08/ 2019- 20/ RFI_FM
Terms of reference for a third party to enter into a lease agreement with Robben Island Museum to manage curio shops located at Murray’s Bay harbour on Robben Island and the Nelson Mandela Gateway at the V&A Waterfront on a lease basis for a period of two (2) years with an option to extend for another two (2) years 2020-02-18 11:00 RIM MAR 01- 2019/ 2020
Appointment of a service provider to do Design and installation of perimeter clear fence for Gauteng Industrial Development Zone (GIDZ) ORTIA SEZ Precinct 2 2020-02-07 11:00 GIDZ/ 05/ 2019- 20/ FENCEP2
Appointment of a service provider to conduct Environmental impact assessment and Township establishment for Gauteng Industrial Development Zone (GIDZ) ORTIA SEZ Precinct 2 2020-02-10 11:00 GIDZ/ 06/ 2019- 20/ ORTIASEZP1
DTPC therefore invites, suitably experienced and qualified, Service Providers to send proposals for the provision of services to remove the existing lagging and supply, install and warrant the new installation as a turnkey project 2020-02-10 11:00 DTP/ RFP/ 18/ AGZ/ 09/ 2019
Terms of reference for the appointment of a service provider to provide communication, public relations and marketing services to Robben Island Museum for a period of three (3) years 2020-02-19 11:00 RIM MAR 02- 2019/ 2020
Manenberg: Manenberg Primary School: Construction of a new School 2020-02-18 11:00 S065/ 19
Welkom Department of Mineral Resources: Alternative Office accommodation and parking facilities for 9 years and 11 Months 2817.88m² and 50 bays 2020-02-11 11:00 BL20/ 001
HANOVER: MAGISTRATE OFFICE: Installation and replacement of air conditioners 2020-01-31 11:00 CW08/ 20
HARSTWATER: MAGISTRATE OFFICE: Installation and replacement of air conditioners 2020-01-31 11:00 CW07/ 20
NOUPOORT: MAGISTRATE OFFICE: Installation and replacement of air conditioners 2020-01-31 11:00 CW05/ 20
DOUGLAS: MAGISTRATE OFFICE: Installation and replacement of air conditioners 2020-01-31 11:00 CW06/ 20
Supply, delivery, installation and commissioning of PMC non-return isolating valves, flow meters and pipe fittings at Phalaborwa Plant CIDB Grading OF 6ME 2020-02-19 11:00 LNW 31/ 18/ 19- Re Advert
Appointment of Brand Agency for World EXPO 2020, Dubai 2020-02-07 11:00 BSA/ 003/ 2019

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