Issue Date: 
Tuesday, November 1, 2016

When Must I Sub-Contract?

There seems to be a lot of confusion amongst entrepreneurs when it comes to tenders and sub-contracting. The Draft Preferential Procurement Regulations, have been gazetted and are currently up for review. However, these Regulations are the major cause for the confusion. Many entrepreneurs ask whether they should sub-contract or not whilst responding to a tender.

The Draft Preferential Procurement Regulations stipulates the following: 

  1. For contracts above R30 million, the tenderer MUST sub-contract a minimum of 30% of the value of the contract to –
    • One or more of the categories:
      • EME’s (Exempt Micro Enterprises) or QSE’s (Qualifying Small Enterprises) owned by black people who are female;
      • EME’s or QSE’s owned by black people from the ages 14 to 35;
      • EME’s or QSE’s owned by black people;
      • EME’s or QSE’s owned by black people with disabilities)
    • One or more Exempt Micro Enterprises (EME’s) or Qualifying Small Enterprises (QSE’s); or
    • One or more small businesses, as defined in the National Small Business Act.
  2. If a successful tenderer sub-contracts to another person without disclosing it in its tender documents, the organ of state must penalise the tenderer 10% of the value of the contract, unless the tenderer submits a satisfactory reason for failing to make the disclosure.

The Regulations are very clear because its states “the tenderer MUST sub-contract…..”. Thus, once the Regulations are finally gazetted then all contracts with a value of R30 million and above will have to comply with this Regulation. Remember that currently (as of 31 Oct. 16) the Regulations are not finalized yet.

Until such time that the Regulations are finalized the answer is easy whether or not to sub-contract – look at the scope of the tender or the special conditions. Somewhere in the tender document it will stipulated whether or not the tenderer will have to sub-contract.  Follow those rules. If the tender document doesn’t contain any sub-contracting instructions (at this stage) then it is not necessary to do so.

The fact is that the tender document will dictate what you should or should not do. Read the tender document carefully and follow the instructions to the point.

To learn more about this and all the other new developments regarding tenders, attend one of the How-to-Tender workshops.

Learn to earn

www.how2tender.com

 
 
Title Closing Date Tender No.
Terms of Reference for Gauteng Township Stock Exchange Ownership & Governance. 2018-06-15 11:00 GT/ GDED/ 077/ 2018
Terms of Reference for the provision of cleaning services at the Gauteng Department of Economic Development and Gauteng Department of Agriculture & Rural Development including the Alex ICT Centre. 2018-06-15 11:00 GT/ GDED/ 081/ 2018
Supply and install new direction sign board for the following Clinic Under Appelsbosch Hospital. Gcumisa Clinic 2018-06-01 11:00 ZNQ 82/ 2018
Supply and install new direction sign board for the following Clinics Under Appelsbosch Hospital Emtulwa Clinic 2018-06-01 11:00 ZNQ 79/ 2018
Appointment of accredited training service providers to manage the implementation of the food safety programme in the nine (9) provinces for a period of twelve (12) months. 2018-06-15 11:00 NDT0005/ 18
Supply and install new direction sign board for the following Clinics Under Appelsbosch Hospital Emambendwini Clinic 2018-06-01 11:00 ZNQ 81/ 2018
Appointment of a service provider to render hygiene services for the Department of Rural Development and Land Reform Head office at Centre Walk Building for a period of thirty – six 36 months. 2018-06-14 11:00 5/ 2/ 2/ 1- RDLR 0008(2018/ 2019)
Supply and install new direction sign board for the following Clinics Under Appelsbosch Hospital 2018-06-01 11:00 ZNQ 80/ 2018
Appointment of a service provider to upgrade, provide support and maintenance services for telephone management as well as switchboard systems at the Department of Rural Development and Land Reform at the following Deeds Registries Offices: Vryburg, Kimberley, Pietermaritzburg and Pretoria Deeds Registry for a period of 24 months. 2018-06-18 11:00 DRDLR (CRD- 08) 2018/ 19
Supply and Delivery of Frozen Vegetables, to the three (3) Central Hospitals (Groote Schuur-, Tygerberg- and Red Cross War Memorial Children’s Hospitals) on a twelve (12) month contract period with an option to extend the contract for a further twelve months based on performance 2018-06-22 11:00 RCCH02/ 2018
The Appointment of a Service Provider for the purchasing, delivery and commisioning of the Protein/Nitrogen Analyser in the analytical services north laboratory in Pretoria for the Department of Agriculture, Forestry and Fisheries. 2018-06-08 11:00 4.4.12.2/ 7/ 18
Department of Defence: Lenz Military Base: DMRS: Replacement and upgrade of Civil Engineering Services: Procurement of Professional Services: Built Environment: Civil Engineering. 2018-06-19 11:00 JHB.18/ 01
Supply and Delivery of Fresh Fruits and Vegetables, to the three (3) Central Hospitals (Groote Schuur-, Tygerberg- and Red Cross War Memorial Children’s Hospitals) on a twelve (12) month contract period with an option to extend the contract for a further twelve months based on performance 2018-06-22 11:00 RCCH03/ 2018
Terms of Reference: For the appointment of human settlements Programme delivery facilitators for a period of thirty six (36) months. 2018-06-19 11:00 BID VA 49/ 605
Appointment of a Service Provider to Conduct the KZN Private Sector Procurement Analysis. 2018-06-27 11:00 ZNT 05 EDTEA 18/ 19
Hygiene service for Benedictine Hospital (2 year contract) 2018-06-08 11:00 ben02/ 2018- 2019
Appointment of a Service Provider to Conduct B-BBEE Verification for 14 Provincial Departments and 11 EDTEA Public Entities. 2018-06-27 11:00 ZNT 01 EDTEA 18/ 19
Adhesive support bandage 100mm x 4.5m stretched ( to bring sample ) 2018-05-25 11:00 ben04/ 2018- 2019
Appointment of a Service Provider for the Procurement of Protective Clothing. 2018-06-27 11:00 ZNT 18 EDTEA 17/ 18
Request for proposals: Production of corporate videos and audio for the African Union 2018-06-22 15:00 AUC/DIC/G/240

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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