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.
Procurement of Marketing and Promotional Material Contract for a period of three years for Lephalale TVET College 2017-12-14 11:00 LEPTVETCOL2017/ 004
Acquisition of land for construction of RTMC office premises 2017-12-13 11:00 RTMC BID 14/ 2017/ 18
Supply gauze swabs 8 ply sterile 100x100, 500 pouches per case. (250 boxes) 2017-11-28 11:00 389/ 17- 18
Supply and install fridge tags x 45 units. 2017-11-24 11:00 ZNQ 216/ 17
Service provider to replace all class 0 to class 2 copper pipe and give a detail report about water quality and recommended service provider must be CIDB grade 1GB & 1SO grades 2017-11-28 11:00 200/ 2017/ 2018 NSI
Supply and installation of wall mounted handrails and accessories as per specification 2017-12-04 11:00 ZNQ 894/ 17- 18
Supply and deliver Office Furniture for Ems uMgundundlovu 2017-11-24 11:00 278/ 17/ 18
Panel of legal service and other related services to the RTMC for a period of three years 2017-12-12 11:00 RTMC BID 15/ 2017/ 18
The Road Accident Fund (RAF) invites an experienced and suitable service provider to Edit, Design Layout, and Print the RAF Annual Reports for a period of three (3) years. 2017-12-15 11:00 RAF/ 2017/ 00065
Repairs to extractor fan hood x 2 units 2017-12-01 11:00 ZNQ 218 / 17 - 18
Re-advertised: vaccine refrigerators - single door (06) 2017-11-24 11:00 62/ 05/ 2016
Implementation Evaluation of the South African Police Service Detective Service: Crime Investigation Service 2017-12-11 12:00 DPME11/ 2017- 18
Procurement of OHSC Server infrastructure and services for a period of five (5) years 2017-12-11 11:00 OHSC/ 02/ NOV/ 2017
Supply: 01 Set, Lounge suit with, genuine leather, black in colour 2017-11-27 11:00 ZNQ 479/ 17/ 18
Provision of a Training Provider to Provide an Engaging Leadership Development Fiveday Short-Course Programme for Health Managers in Western Cape Government Health for a three (3) year period 2017-12-15 11:00 WCGHSC 0126/ 2017
Appointment of a service provider to render communications and media production agency services for The National Consumer Commission for a period of thirty six (36) months 2017-12-15 11:00 NCC/ 02/ 2017/ 18
Appointment of a service provider to conduct research project regarding the issuing of self contained rescuers (SCSR) to mining employees. 2017-12-15 11:00 MHSC016/ 2017- 18
Service eto gas sterilizers 2017-12-03 11:00 ZNQDN263/ 17GAZ
LGSETA hereby invites interested parties to submit their proposals for the implementation of a business Workflow Management Solution. 2017-12-08 12:00 LGSETA/ ICT/ 17/ 18/ 01
Provision of a National Brand Perception Survey for Legal Aid South Africa for a period of 2 months. 2018-01-11 11:00 41/ 2017

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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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