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.
Supply: Civil materials 2017-11-23 14:00 GE11800775
Supply, delivery and off-loading of white hydrated lime for various waste water treatment works and water purification works of the City of Tshwane: as and when reuired: three year period 2018-01-31 10:00 USD WS 04-2017/18
Supply: Glass Beads 2017-11-28 14:00 GE11800776
Appoint a panel of service providers for training and capacity building of farmers and agricultural co-operatives in Tshwane: as and when required: three year period 2018-02-01 10:00 EMS 01-2017/18
Supply: Ibr colorplus /colorbond roof sheeting A 2017-11-24 15:00 GB11800550
Supply, delivery and fitting as well as repairs, maintenance and refurbishment of agricultural infrastructure in Tshwane: as and when required: three year period 2018-02-02 10:00 EMS 02-2017/18
Supply: Care packs 2017-11-28 12:00 GG11800244
Supply & Delivery of Water Testing Equipment 2017-11-24 12:00 SCM/2018/168/ENG
Die herstel en aanbring van beligting by die Amfiteater, te Paarlberg 2017-11-27 11:00 ATM/011-2017/2018
Supply and delivery of dry beans and maize for led projects 2017-11-27 12:00 Q004754
Catering of breakfast and lunch for 750 people at Vereeniging, Banquet Hall for the people’s assembly 2017-11-28 10:00 11/3/2018/15
Supply & Delivery of a Boat Engine 2017-11-24 12:00 SCM/2018/170/COMM
12 buses that will ferry community members to people's assembly at Vereeniging Banquet Hall 2017-11-28 10:00 11/3/2018/16
Bus Hire: Umkomaas to Kelso 2017-11-28 12:00 PR 10264223
Bus Hire: Northdene to Pinetown 2017-11-28 12:00 PR 10264228
Bus Hire: Rossburgh to Pinetown 2017-11-28 12:00 PR 10264226
Bus Hire: Bellair to Malvern 2017-11-28 12:00 PR 10264219
The MBDA requires Decor and Entertainment for Friday 01 December 2017 at the MBDA's offices 2017-11-24 11:00 BDA1117500
Skills development providers to offer LGSETA learning programmes 2017-11-28 12:00 10/2017
Bus Hire: Rossburgh to Bellair 2017-11-28 12:00 PR10264229

Pages

Functionality and Tenders

In all competitive bids (tenders) you as the bidder will have to respond to Functionality. You will need to score a set minimum number of points, measured as a percentage, on Functionality of a competitive bid (tender) in order to advance to the next phase of evaluation in the tender process.

Usually Organs of State evaluate competitive bids (tenders) as follows:

  • The tender response is evaluated on Functionality where the bidder must score points out of a maximum of 100 points.
  • A threshold of between 65 to 75 out of 100 points... Read More
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