Issue Date: 
Thursday, October 31, 2019

Sub-contractors versus Consortiums and Joint Ventures

By Werner van Rooyen, Director of HowToTender (Pty) Ltd which specializes in tender consulting and tender training.

The Preferential Procurement Regulations, 2017 states that, if it is feasible, 30% of all Government Contracts above R30 million must be sub-contracted to specific categories of SMME’s.  These SMME’s include, but are not limited to, black female owned and black youth owned businesses.

To help with the confusion that arises from whether one must form a Joint Venture, Consortium or sub-contractor/contractor relationship when responding to a tender it is always good to understand the definition of these types of business relationships:

  • A sub-contractor/contractor relationship arises when a main contractor hires or employs additional businesses or persons outside of the main contractors own business to do work or to deliver services as part of a larger project.  The important thing to remember is that the main contractor is in charge and must ensure that the project is executed and completed as stipulated in the contract.
  • A consortium is an association of two or more individuals, companies, or organisations with the objective of participating in a common activity, such as responding to a tender, or pooling their resources to achieve a common goal.  Within the consortium, each participant retains their separate legal status and the consortium’s control over each participant is limited to activities involving the joint endeavour, particularly the division of profits.  A consortium is formed by contract.
  • A Joint Venture can be described as a business enterprise where two or more participants come together to share their expertise to win a specific contract for a set period.  A Joint Venture is a separate entity and is not part of the individual participant’s own enterprise.  Therefor a Joint Venture must have its own set of rules by which it is managed, and this is called a Joint Venture Agreement.

To become a sub-contractor, you will have to have a running business.  Main contractors will only use dependable sub-contractors with a proven track record.

To learn more about this and many other tender conditions attend our “Become a Tender Expert” 2-Day workshops presented in Johannesburg, Pretoria, Durban, Port Elizabeth, and Cape Town.  Book and pay online at https://howtotender.co.za/tender-expert-form/

Contact us at wernervr@howtotender.co.za should you require more information.

You can also purchase a Tender Manual (Handbook) on our website https://howtotender.co.za/ which is a step by step guide how to respond to a South African Tender.  It includes examples of completed SBD forms.

Title Closing Date Tender No.
Sale of 74 industrial and two unregistered portions of erf 1 Caledon situated in Chavonnes Way Caledon 2022-06-24 12:00 TPM 01/2022/23
Request for Proposal: Children on the Move End of Project Evaluation 2022-06-03 17:00 No reference number
Construction of a security room at the Nama Khoi Workshop in Springbok 2022-05-30 10:00 Q/NC062/10/2021-2022
Control of aquatic and terrestrial invasive plants, removal and disposal of biomass and litter from site 2022-06-21 10:00 343S/2021/22
Maintenance of lifts and escalators for a period of 1 year at King Shaka International Airport 2022-06-21 12:00 KSIA6813/2022
Operation of Tuck shop at Midrand High School 2022-06-03 12:00 Tuckshop Tender MHS_05/2022
Individual Consultant Selection – to Support Procurement and Disbursement Implementation for Bank Finance Projects 2022-06-03 15:00 ET-AUC-293330-CS-INDV
Terms of reference for the recruitment of five (5) consultants for the production of the 2023 Africa’s Development Dynamics Report 2022-06-03 15:00 No reference number
Consultancy services to: Develop proposal for the division of labour between the African Union, Regional Economic Communities, Regional Mechanisms and Member States, pursuant to assembly decisions Assembly/AU/Dec.635 (XXVIII), Ext/Assembly/AU/Dec.1 (XI) and Assembly /AU/Dec.798 (XXXIV) 2022-06-30 15:00 AUC/BCP/C/002
Re-Advert: Appointment of a labour relations specialist/consultant to assist with chairing disciplinary proceedings 2022-05-26 13:00 EWSETA/RFQ/015/2022
Request for proposal for the placement on the municipal panel of attorneys for a period of 36 months 2022-06-09 12:00 16/2022
TD-04/05/2022: Erection and construction of a new container hive next to Thusong and Bongulethu Police Station, Oudtshoorn 2022-06-20 12:00 FORMAL TENDER TD-04/05/2022:
Tender for the appointment of a service provider for online electronic search and information verification for a period of three (3) years from date of appointment 2022-06-20 12:00 FIN003/2022
On-site calibration of power meters at the SABS. 2022-05-24 11:00 RFQ 20570
Re-advert: Appointment of a service provider for the provision and management of security services for the period of three years 2022-06-15 12:00 T02/2022
Re-advert: Appointment of a panel of consulting engineering firms for various projects in Dr Pixley Ka Isaka Seme Local Municipality as and when required for a period of three years 2022-06-03 12:00 T01/2022
Rendering of medical related services as well as professional and community counselling services for a period of three (3) years from date of appointment 2022-06-20 12:00 BA024/2022
Provision for Pest Control and Sanitation Services 2022-06-13 12:00 CO 22/18 O
Supply and delivery of LBO-NCPM1064-AR: LBO pre-mounted in the oven and a Crystal oven with precision temperature controller to iThemba LABS-NRF, Faure, Western Cape 2022-06-02 11:00 iLABS/RFQ 2022/23:51
Provision for Medical Surveillance Services for Staff and Students 2022-06-13 12:00 CO 22/17 O

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Who is the bidder or his or her representative?

By Werner van Rooyen, Director of HowToTender (Pty) Ltd which specializes in tender consulting and tender training.

In Organ of State tenders, the Standard Bidding Document 4 – Declaration of Inters – ask in paragraph 2.1 the following: “Full name of bidder or his or her representative... Read More

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