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 and Appointment of a Reputable Landscaping and Garden Terrains (Deforestation / Tree Felling) and Indoor Plants Maintenance Contractor(S) Through an Rfb:- for a 3 Year Period at Various Sita Hq Campuses In Centurion, Erasmuskloof, Beta and Numerus With The Option To Include Future New Sites 2017-11-24 11:00 RFB 1651- 2017
Procurement of services for the establishment and implementation of multispecies aquaculture hatchery, Research And Demonstration Centre in the Eastern Cape for a period of three (3) years 2017-11-24 11:00 4.4.12.4/ MLRF 150/ 18
Supply and delivery of Crime Scene Protective Stepping Plates for a period of two (2) Years: Criminal Record and Crime Scene Management: Division: Forensic Services 2017-11-24 11:00 19/ 1/ 9/ 1/ 65TD (17)
Supply and deliver a replacement part on an Inspex 20i x-ray system: one (1) digital, flat panel x-ray detector 2017-11-24 11:00 NRF/ SAIAB/ 2018- 018
Provision of service provider to evaluate discretionary grants proposal 2017-2018 2017-11-23 11:00 011- 2017/ 2018
Provision of service provider to adjudicate discretionary grants proposal 2017-2018. 2017-11-23 11:00 010- 2017/ 2018
Procurement of a Sub-Zero Variable Black Body Source, Including Delivery, Installation And Commissioning 2017-11-24 11:00 NMISA (17- 18) T0042
Appointment of a service provider to provide comprehensive facilities management services at DPP Kimberley and Thuthuzela Care Centre for a period of three (3) years 2017-12-04 11:00 NPA 16- 17/ 18
Procurement of a High Temperature Variable Black Body Source, Including Delivery, Installation And Commissioning 2017-11-24 11:00 NMISA (17- 18) T0053
Procurement of a Medium Temperature Variable Black Body Source, Including Delivery, Installation And Commissioning. 2017-11-24 11:00 NMISA (17- 18) T0052
Procurement of a Low Temperature Variable Black Body Source, Including Delivery, Installation And Commissioning 2017-11-24 11:00 NMISA (17- 18) T0051
The Mjindi Farming (PTY) LTD seek to appoint a contractor for rendering security services for period of twelve months 2017-12-08 11:00 Tender
Procurement of a Tympanic (Ear) Variable Black Body Source, Including Delivery, Installation and Commissioning 2017-11-24 11:00 NMISA (17- 18) T0050
Appointment of a service provider to develop and implement a consumer education campaign for a period of twelve (12) months on 80/20 PPPFA: preferential procurement regulations, 2017. 2017-12-01 11:00 ICASA 13/ 2017
Appointment of a service provider for cleaning, pest control, hygiene, waste recycling and removal services at ICASA’s head office (Sandton) for a period of one (1) year 2017-12-01 11:00 ICASA 14/ 2017
Appointment of a service provider for the development and implementation of the migration plan, which includes the development of radio frequency spectrum assignment plans and an update to the IMT roadmap for a six (6) months 2017-12-01 11:00 ICASA 11/ 2017
The appointment of a service provider to provide safeguarding and Security services at the Department of Public Works: Head Office Complex, 191 Prince Alfred Street, PMB. 2017-12-01 11:00 ZNT 06/ 17/ 18
Supply and delivery of 300 Safety Kiosks over the period of two years for the Department of Community Safety 2017-11-24 11:00 GT/ GDCS/ 149/ 2017
Rendering of a comprehensive cleaning and hygiene Eco-Friendly service for Bellville Health Park “Green Building” for a three (3) year period. 2017-12-01 11:00 WCGHSC 0135/ 2017
Security Services required at Coastal KZN TVET College for the Central Office and 8 Campuses 2017-12-01 11:00 SS CKZN 02/ 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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