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.
Contractor Roleleathunya: Phase 1 Construction of 1,7KM paved access roads with related storm water. 2018-03-09 14:00 SCM/MOH/05/2018
Appointment of a Heritage Consultant to compile a detailed report to give effect to the record of decision (ROD) and incorporate the recommendations of the latest status quo report on Vlakkeland (Ikhwezi) erf 19519 (daljosafat), Paarl 2018-03-01 10:00 DIP0001798
Professional Engineers: Upgrading of the Rouxville Landfill Site. 2018-03-09 14:00 SCM/MOH/08/2018
Refurbish car shade ports 2018-03-01 09:00 SP11800110
Appointment of a design company to design signage for a heritage building owned by Drakensetin building: Arendsnes Buisiness Hive, Wellington. 2018-03-01 10:00 DIP0001797
Irrigation System Upgrade 2018-03-06 09:00 SP11800111
Replace floodlights at 3 masts at Paarl Waste Water Treatment Plant 2018-03-01 10:00 DIE0013266
Wet-Wall System Upgrade 2018-03-06 09:00 SP11800112
Supply and delivery of sound system 2018-02-27 11:00 GK1180421A
Supply: 3-in-1 combination fans 2018-02-27 12:00 GL11800592
Hired of Venter Trailer - 750kg 2018-02-26 09:00 WJ11800342
To appoint a consultant for recruitment and selection services 2018-03-01 10:00 DCG0010653
Supply wooden portable tool box 2018-02-26 12:00 GD11800762
Supply Pvc kanaflex and lay flat pipes 2018-02-27 12:00 GD11800763
Supply & delivery of stackable, black epoxy frame, with polypropylene seat back chairs for Simondium Community Hall 2018-03-01 10:00 DSC0018183
Supply Replacement tools for civil workshops 2018-02-26 12:00 GD11800764
Supply Banner wall Subcouncil 4 2018-02-28 12:00 GL11800590
Supply, delivery & installation of industrial electric stove with oven. 2018-03-01 10:00 DSC0017428 & DSC0017540
Supply cordless power tools 2018-02-26 12:00 GD11800765
Supply, installation and commissioning of parts and accessories for road marking equipment. 2018-03-13 11:00 52/2017/2018

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
Free Keyword search

Search all tender notices for FREE!

No subscription or registration required!

You can also search by the reference of the the tender.

Advanced search

Search by Issuer, Region or Sector, individually, or using any combination of the three.