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.
Provision of a whisteblower services for a period of 36 months. 2018-05-18 11:00 1A-36415
Provision of annual report design, layout and printing services for a period of 36 months. 2018-05-18 11:00 1A-36038
Supply and deliver of Carrot (Cape market) Seeds in 500 gram packs 2018-05-04 11:00 GQ04181748
Supply and deliver of Onion (Texas grana and red creole) Seeds in 500 gram packs 2018-05-04 11:00 GQ04181748
Securing company for the campaign shoot for The DFF 2018. 2018-05-02 11:00 7G‐38176
Supply and deliver of Squash (Rollet and Green hubbard) Seeds in 500 gram packs 2018-05-04 11:00 GQ04181748
Supply and deliver of Spinach (Fordhook giant) Seeds in 500 gram packs 2018-05-04 11:00 GQ04181748
Supply and deliver of Greenpepper (Carlifonia wonder) Seeds in 500 gram packs 2018-05-04 11:00 GQ04181748
Supply and deliver of Beetroot (Rimson globe) Seeds in 500 gram packs 2018-05-04 11:00 GQ04181748
Supply and deliver of Cabbage Seeds (Glory of Erkhuizen) in 500 gram packs 2018-05-04 11:00 GQ04181748
Supply and Install 2 x Vehicle PA System 2 x horn 2 loudspeakers with succion cups, amplifier, usb audio, microphone and workbench assessment 2018-05-02 11:00 CSQ04181266
Supply, Deliver and Install a conveyor belt at the Check in counter at the Airport. 2018-05-08 12:00 Specialised quotation no.Q12/279 of 17/18
Panel of Professional Land Surveyors For a Period of 36 Months. 2018-05-11 12:00 A027-2017/18
Supply and delivery of Brake Beam Components. 2018-05-22 10:00 TE18-BFX-050-02553
Die dienste van spesialis vir die benodig vir ‘n ontleding, behoeftebepaling en installering van ‘n brandalarmstelsel en noodontruimingsplan. 2018-05-26 11:00 ATM/002-2018/2019
Cove and emergency escape routes lighting project. 2018-05-29 12:00 ORT132/2017
The provision of reclamation dam electrical panel works for an estimated period of 6 months at Camden Power Station. 2018-05-31 10:00 MPGXC005144
The provision of reclamation dam electrical panel works for an estimated period of 6 months at Camden Power Station. 2018-05-31 10:00 MPGXC005144
Installation and replacement of water meters up to & including 150MMØ. 2018-05-31 11:00 SCM/17-110/S
Supply, Delivery, Installation and commissioning of new energy efficient air conditioning units at Neptune, Pembroke, Buffalo, Grassridge and Poseidon substations. 2018-06-01 10:00 PSCED0093R

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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