Issue Date: 
Monday, March 31, 2014

Tenders and Local Content

By Werner van Rooyen

www.how2tender.com

31 March 2014

Did you know that the Gauteng Provincial`s target on procurement spent on Local Content is 75%? This can also be said for the National Government`s procurement spent.

That is very good news! It can also be considered that most of the nine Provinces have got the same target. This means that Local Content is a priority to National as well as Provincial Governments, when it comes to their Procurement spent. This is good news for local manufacturers and services providers. Local manufacturers and service providers has at least a 75% change of winning a tender.

But what is the definition of Local Content?

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 Annexure D and E, summarized in Annexure C. Local Content is total spend less any imported component. Remember that you as suppliers 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 tender that you 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:

  1. finance charges;
  2. property; and
  3. deployment fees of the operations contractor.

Currently the new B-BBEE Codes of Good Practice that will come into effect on 30 April 2015 strong emphasis is given to Enterprise and Supplier Development, one of the five elements of B-BBEE. This element will count 40 out of the 109 points on the B-BBEE scorecard and this element is all about developing the Local Entrepreneur. This will and must stimulate the manufacturing and producing of Local Content.

The National Government has also 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. If your business enterprise falls into one of these 12 designated sectors then you will have to comply with these minimum thresholds. These designated sectors together with its minimum thresholds can be found at: http://www.dti.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. So next time when you tender consider Local Content as an option.

Local Content and much more tender issues are discussed in our Tender Manual. If you want to know more about the tender process and how to complete a tender correctly and hopefully successfully, please visit our website at www.how2tender.com to find out more.
Until the next time - happy tendering.

Don`t delay, get educated today!

1. Definition of designated Sectors as per SBD document 6.2.

Title Closing Date Tender No.
Appointment of Service Providers for Emergency Accomodation as and when needed until 30 June 2019. 2018-07-25 11:00 6/19
GIZ SAGEN wishes to appoint a consultant to develop an automated Statistical Measurement and Verification Tool (MVT), to 'electronify' the South African National Accreditation System (SANAS) Technical Guide (TG) 50-02 document and with specific reference to the South African National Standard for Measurement and Verification, i.e. SANS 50010:2018, (Edition 2). 2018-07-20 12:00 #83294869
Supply Front hub seal 2018-07-19 14:00 WE11900212
Supply Alternator belt 2018-07-19 14:00 WE11900211
Supply 3 each x beta bait stations boxes 2018-07-19 14:00 GC11900021
Supply Durable sentinel mat with city logo 2018-07-23 12:00 GL11900027
Tenders are invited for the Hiring of 1.8 Ton Diesel Forklift Truck for a period of one month. 2018-07-24 11:00 CSQ07181343
Tenders are invited for the Hiring of 1.8 Ton Diesel Forklift Truck for a period of one month. 2018-07-24 11:00 CSQ07181343
Bookbinding of agendas. 2018-07-19 12:00 SD119O0035
Supply A5 leather folders 2018-07-23 12:00 GL11900032
Provision of Internet Services 2018-08-17 15:00 ADB/RFP/RDGS/2018/0090
Appointment of an Experienced Service Provider to Conduct Locality Analysis for the Tshwane Clothing and Textile Hub Project 2018-07-31 11:00 TEDA/PPM 01/07/18
Shuttle service (hire of 14 seater) 2018-07-24 09:00 WJ11900030
Supply and delivery of voice recorder. 2018-07-20 11:00 GK11900023
Request for proposals from service providers to deliver international executives development programme (NQF level 8) aimed at senior managers and executives in the transport sector (all transport sub-sectors) 2018-08-03 11:00 TETA18/CS/0003/IEDP
Appointment of a service provider to lease commercial office accommodation to SASSETA for a period until 31st March 2020 with an option to re-new 2018-08-13 11:00 RFP/SASSETA/1718006/01
Supply Clear carpet protectors Subcouncil 18, Lotus River. 2018-07-20 12:00 GL11900031
Supply unit packaging carbon asphalt 2018-07-20 14:00 GE11900144
Supply Clean filling sand 2018-07-25 14:00 GE11900143
Macro-Economic Impact Assessment of the Contribution of the EPWP on the South African Economy. 2018-08-06 12:00 IDTDPW29NATN

Pages

Tender adjudication process

The SBD/WCBD6.1 document must form part of all bids invited.  It contains general information and serves as a claim form for preference points for Broad -Based Black Economic Empowerment (B -BBEE) Status Level of Contribution, and explains how tenders or bids are decided.

The document says:

  • The bidder obtaining the highest number of points will be awarded the contract.
  • Preference points shall be calculated after prices have been brought to a comparative basis.
  • Points scored will be rounded off to two decimal places... Read More
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