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.
Colostomy Bags for infant x 20 Boxes 2018-10-26 11:00 ZNQ 426/ 2018
Colostomy Bags for new born x10 boxes 2018-10-26 11:00 ZNQ 373/ 2018
Safety Intravenous cannula with introducer needle and needle lock device 18G , 1.3 x 45mm , 100ml/Min ( 50/Box ) 2018-10-26 11:00 ZNQ 80- 2018/ 19
Supply, Install & Commission Three New Domestic Calorifiers as per specification. 2018-10-30 11:00 ZNQ NO.3072/ 09/ 18
Ent Ear Duckball Elevator Curved 2.2mm Blade, 14cm Length 2018-10-30 11:00 ZNQ NO.2474/ 08/ 18
Quik Fil Filling Adaper. 2018-10-30 11:00 ZNQ NO.2404/ 08/ 18
Mepitel Mesh Dressing With Safety Technology 20 X 31cm. 2018-10-30 11:00 ZNQ NO.1848/ 07/ 18
Glucometer Sticks For The Gluco Sure Autocode 2018-10-30 11:00 ZNQ NO.1805/ 07/ 18
Argyle Thoracic Catheter Drain 40fr 2018-10-30 11:00 ZNQ NO.734/ 05/ 18
Rendering, Manufacturing, Repairing, Fitting and Supplying of Aids for Orthotic and Prosthetic Services to Institutions in the Eden and Central Karoo District Under Western Cape Government the Department of Health for a three year Period 2018-11-16 11:00 WCGHCC031/ 1/ 2018
Ethibond Suture Gauge 5. 2018-10-30 11:00 PSH 373/ 1819
Fluid Administrative Giving Set - High Capacity 2018-10-30 11:00 PSH 856/ 1819
Intravenous Catheter (Cannula & Needle) 2018-10-30 11:00 PSH 672/ 1819
Feeds-Tpn Contracts For 3 Years 2018-10-30 11:00 PSH 962/ 1819
Surgiflo Haemostatic Matrix Plus Flexitip Size: 12ml Syringe 2018-10-30 11:00 PSH 829/ 1819
Intravenous Catheter (Cannula & Needle) 2018-10-30 11:00 PSH 957/ 1819
Surgical Stockings Small 2018-10-30 11:00 PSH 259/ 1819
Intravenous Catheter (Cannula & Needle). Size : 16g. 2018-10-30 11:00 PSH 671/ 1819
Butterfly Needle 18g -Neonate/Paeds. 2018-10-30 11:00 PSH 709/ 1819
Percutaneous Tracheostomy Kits Cuffed. 2018-10-30 11:00 PSH 625/ 1819

Pages

Advantages and disadvantages of Consortiums

Consortiums are often considered as entities to use when responding to tenders in South Africa. The question that arises is whether to use a Consortium or a Joint Venture when responding to a tender. To help you with this we have compiled a list of advantages and disadvantages for both Consortiums as well as Joint Ventures. In this article we list the advantages and disadvantages of Consortiums. Look out for the same article on Joint Ventures.

Consortiums Advantages:

  • Easy to establish as there are no formal procedures... Read More
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