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: 3 x gbc fusion 3000l laminator a3 2018-02-26 11:00 GM11800634
Supply and delivery of duffel bag to the saps for a period of two (2) years 2018-03-16 11:00 19/ 1/ 9/ 1/ 63TD (17)
Routine (preventative) and breakdown maintenance of eleven (11) Fuji Frontier Digital Minilab printers for a period of three (3) years 2018-03-27 11:00 Bid no. 19/ 1/ 9/ 1/ 98 TR (17/ 18)
Annual Servicing of Pharmaceutical Fridge At KwaDabeka Community Health Centre. 2018-03-02 11:00 ZNQ 649/ 17
Supply Only Red Central Storage Areal Container As Per Specification At Halley Stott Clinic 2018-03-02 11:00 ZNQ 647/ 17
Supply Only Red Central Storage Areal Container As Per Specification At KwaDabeka Community Health Centre Clinic 2018-03-02 11:00 ZNQ 648/ 17
Supply Only Red Central Storage Areal Container as per specification at Clermont Clinic 2018-03-02 11:00 ZNQ 646/ 17
Procurement of Inductively Coupled Plasma - Optical Emission Spectrometer (ICP-OES) instrument. 2018-03-09 11:00 NMISA (17- 18) T0061
Supply Suture Vicryl V486g 90cm 40mm Reverse Cutting as per specification 2018-03-12 11:00 ZNQ 1139/ 17- 18
Travel Management Bid For 2018-2020 2018-03-16 14:00 CBRTA/ HO/ 0040
Re-Advert - Appointment of a service provider for the rollout and management of biometric learner attendance monitoring system 2018-03-02 11:00 013- 2017/ 2018
Procurement of supercritical fluid extraction - chromatography system with UV detector and fraction collector 2018-03-09 11:00 NMISA (17- 18) T0058
Supply suture 1g 75cm/3/8c 60mm cutting needle as per specification 2018-03-12 11:00 ZNQ 1138/ 17- 18
Supply: Caesarean section drape with pouch and incise and with mayor cover, disposable. 2018-03-12 11:00 ZNQ 1022/ 17- 18
Supply: Wound dressing double hydrocolloid hydrogel containing pectin and sodium CMC 15g - 3000 boxes, please provide sample. 2018-03-06 11:00 67/ 17- 18
Re-Advert - Provision of insurance services by an insurance underwriter 2018-03-02 11:00 016- 2017/ 2018
Appointment of a Group Risk Insurance/Assurance Provider for all CIPC Employees 2018-03-26 11:00 CIPC BID NUMBER: 30/ 2017/ 2018
Supply Wound dressing (triple hydrocolloid dressing with polyurethane foam 20 x 20 cm) - 3000 boxes 2018-03-06 11:00 438/ 17- 18
Rendering a hospitality service, including a small retail component, aligned with the Mcgregor Museum brand, in the Mcgregor Museum shop located at the premises known as the Mcgregor Museum. 2018-03-09 11:00 NCDSAC- 003- 2017
Supply Wound dressing (100% soduim carboxymethylcellulose NaCMC fibrous hydrocolloid dressing 15 x 15 cm) - 3000 boxes. please provide sample 2018-03-06 11:00 437/ 17- 18

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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