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 and deliver Duplex Dermatome. 2018-06-25 11:00 H109/ 18/ 19
Supply and install high security fence at Mphohadi campus - Kroonstad 2018-07-13 11:00 T/ IM/ 01/ 18 fence
Cut, Make and Trim (Outer Material will be supplied by SA Air Force) of SA Air Force Ladies Windbreakers. Quantity 500. Main Contractor or Sub- Contractor must have a valid SABS Capability Report (not older that 12 Months). 2018-07-19 11:00 SPU/ B/ DSS/ 038/ 18
2 Units - Insulated Beverage Containers - 5.7 Liter Capacity Granite Grey (Polycarbonate) 2018-07-04 11:00 195/ 18
1 Unit - Food Waste Disposer/Macerator 3hp 2.2 Kw - Supply and Install (Specification Attached on the Documents) 2018-07-04 11:00 193/ 18
Cut, Make and Trim (Outer Material will be supplied by SA Air Force) of SA Air Force Skirt Evening Wear, Black. Quantity 150. Main Contractor or Sub-Contractor must have a valid SABS Capability Report (not older that 12 Months). 2018-07-17 11:00 SPU/ B/ DSS/ 036/ 18
Rendering of Health Care Risk Waste handling service to Western Cape Government: Health for three (3) year period 2018-07-13 11:00 WCGHSC 0090/ 2017
Cut, Make and Trim (Outer Material will be supplied by SA Air Force) of SA Air Force Coverall Jackets (Quantity 1000) and Trousers Coverall (Quantity 1500). Main Contractor or Sub-Contractor must have a valid SABS Capability Report (not older that 12 Months). 2018-07-18 01:00 SPU/ B/ DSS/ 032/ 18
Tumble Dryer - 55kg 2018-07-03 11:00 ZNQ 287/ 18- 19 GAZ
Hyster Canopy 2018-07-03 11:00 ZNQ 288/ 18- 19 GAZ
Digital Steam Press 2018-07-03 11:00 ZNQ 289/ 18- 19 GAZ
Cut, Make and Trim (Outer Material and Metal Buttons will be supplied by SA Air Force) of SA Air Force Caps, Service Dress, Men. Quantity 67. Main Contractor or Sub-Contractor must have a valid SABS Capability Report (not older that 12 Months). 2018-07-16 11:00 SPU/ B/ DSS/ 030/ 18
Removal and Disposal of Used Fluorescent Tubes 2018-07-03 11:00 ZNQ 277/ 18- 19 GAZ
Supply and Delivery of SA Air Force Embroidered Onlays (Quantity 140), Hand Embroidered Cap Badges (Quanity 147) and Gorget Patches (Quantity 321). Main Contractor or Sub-Contractor must have a valid SABS Capability Report (not older that 12 Months). 2018-07-18 11:00 SPU/ B/ DSS/ 029/ 18
Provision of Porter, Messenger and Cleaning Services for a period of 12 months - 4 staff 2018-07-03 11:00 ZNQ 278/ 18- 19 GAZ
Washer Extractor - 57kg 2018-07-03 11:00 ZNQ 286/ 18- 19 GAZ
Appointment of a service provider to supply the Council for Geoscience (CGS) with a vehicle and equipment tracking management system for a period of 5 years 2018-07-20 11:00 CGS- 2018- 017K
Appointment of a Company to Review Business Continuity Programme 2018-07-23 11:00 CGS- 2018- 018K
South African Social Security Agency hereby invites of suppliers to bid for the supply and delivery of stationery for SASSA - Limpopo Region for a period of 36 months 2018-07-13 11:00 SASSA: 04/ 18/ CS/ LP
Nelson Mandela Museum seeks the services of a qualified and experienced company to supply 4 in 1 color multi-function printers for a period of two years (twenty four months). 2018-07-13 12:00 NMM 2018- 07

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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