Issue Date: 
Tuesday, November 1, 2016

When to sub-contract?

There seems to be a lot of confusion amongst entrepreneurs when it comes to tenders and sub-contracting, due in large part, to The Preferential Procurement Regulations, 2017 which came into effect on 1 April 2017. Many entrepreneurs ask us whether they should sub-contract or not, when responding to a tender.

Regulation 9 of The Preferential Procurement Regulations 2017, stipulates the following:

1: If it is feasible to sub-contract for a contract above R30 million, an Organ of State must apply sub-contracting to advance designated groups.

2: The Organ of State must advertise this specific tender condition that the successful bidder must sub-contract at a minimum of 30% (of the value of the contract) to (one or more) to an EME or QSE which is at least 51% owned by:

a.    black people;

b.    black people who are youth;

c.    black people who are women;

d.    black people with disabilities;

e.    black people living in rural or under develop areas or townships;

f.    black people who are military veterans;

g.    A cooperative which is at least 51% owned by black people;

3: In paragraph 3 of Regulation 9 it also states that the Organ of State must make available the list of all suppliers registered on a database approved by the National Treasury to provide the required goods or services in respect of the applicable designated groups mentioned above from which the bidder must select a supplier.

Regulation 9 is very clear because its states "the tenderer MUST sub-contract…..". Thus, according to the Regulations all contracts with a value of R30 million and above will have to comply with this Regulation. Read the tender document carefully because somewhere in the tender document it will stipulate whether or not the bidder will have to sub-contract. Follow those rules. If the tender document doesn't contain any sub-contracting instructions then it is not necessary to sub-contract.

The fact is that the tender document will dictate what you should or should not do. Read the tender document carefully, follow the instructions precisely and to the point.

To learn more about this and all the other new developments regarding tenders, please attend one of our How-to-Tender workshops. Tender Workshop dates are published on our website at www.how2tender.com. For more information on the tender courses please email Werner at werner@how2tender.com.
 
This article was written by Werner van Rooyen, Director of HowToTender (Pty) Ltd. which specializes in tender consulting and tender training.

Title Closing Date Tender No.
Supply of Red Hat Enterprise Linux Maintenance and Support for thirty six (36) months. 2018-09-06 11:00 RFB 1781/ 2018
Supply Plumbing tools (specification will be available on request) 2018-08-24 11:00 ZNQ 095 2018/ 19
The appointment of a panel to supply ICT hardware 2018-09-06 12:00 RFP013/ 2018
Supply Plumbing materials (specification will be available on request) 2018-08-24 11:00 ZNQ 096 2018/ 19
Lease of the cottage with a portion of municipal land (±1. 7138 ha) situated on a remainder of portion 13 of the Farm Long Valley No.15, Dassieshoek, Robertson 2018-09-14 12:00 48/ 2018
Request for the provision of services to department of planning, monitoring and evaluation (DPME) to support, maintain and enhance the web-enabled local government management improvement model (LGMIM) assessment tool and technical/content advisory services for a period of 12 months with the option to extend the contract for an additional 24 months. 2018-09-07 11:00 RFB 1785/ 2018
Alienation of various available erven 2018-09-14 12:00 49 /2018
Tenders are hereby invited for the Supply, Delivery, Installation and maintenance of Photocopier machines for a 5 Year Operational Lease and Maintenance Agreement. 2018-09-07 11:00 Tender 3/ 2018 (PUR 401/ 9)
Supply , Deliver and Offload Protective Clothing for Land Care. 2018-09-06 11:00 ZNB 4266/ 18A
Supply of Equipment and Software (Shipment and Delivery), Equipment Installation, Configuration, VM Migration and Project Management and 5-year Support and Maintenance. 2018-09-07 11:00 SCMU3- 18/ 19- 0121- HO
Supply, delivery , Offload and installation of Two Center Pivot for Hlubi project at Alfred Duma (Ladysmith) Uthukela District. 2018-09-06 11:00 ZNB 4270/ 18A
Phototherapy (Puva)/ Narrow Band UVB 2018-08-28 11:00 ZNQ NO.5882/ 04/ 18
Slimroll Hand Towel Sheet Size 200mm X 155m to Fit Kimberley Clark Slimroll Hand Dispensers. 2018-08-28 11:00 ZNQ NO.5565/ 03/ 18
Supply, delivery, Offload and installation of Irrigation at Block 1 Mbonwa Irrigation scheme at Umuziwabantu Local Office Ugu District. 2018-09-06 11:00 ZNB 4269/ 18A
Portable Rebound Tonometer 2018-08-28 11:00 ZNQ NO.2303/ 07/ 18
Appointment of a service provider for the Landcare alien weeds and bankrupt bush control projects. 2018-09-07 11:00 GT/ GDARD/ 114/ 2018
Heat & Moisture Exchanger for Attachment to a 15mm Connector, with Oxygen Supply Port 2018-08-28 11:00 ZNQ NO.2148/ 07/ 18
Supply Paper photocopy white bond 80GSM A4 X 3000 reams 2018-08-24 11:00 ZNQ 436/ 18
A Simple System for Accurate Intra Abdominal Pressure Monitoring In Criticallly Ill Patients. 2018-08-28 11:00 ZNQ NO.1863/ 07/ 18
Supply and delivery of frozen chicken products and frozen fish products to the Red Cross War Memorial Children’s Hospital for two years (24 month) contract period with an option to extend the contract for a further 1 year (twelve months) based on performance. 2018-09-14 11:00 RCCH04/ 2018

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In Australia, for example, government procurement guidelines only allow suppliers who actually tender to be considered for a procurement decision. If the leading supplier or suppliers do not tender, the purchaser can only consider bids from suppliers who do tender. If leading suppliers are not considered, the purchaser may end up buying inferior product or service... Read More

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