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.
For the supply and delivery of frozen fish products for the Food Services Department at Tygerberg Hospital for a twelve (12) month period with the option to extend on a month to month basis not exceeding four (4) months 2020-08-07 11:00 TBH 305/ 2020
For the supply and delivery of fresh vegetable products for the Food Services Department at Tygerberg Hospital for a twelve (12) month period, effective 1 September 2020 until 31 August 2021 with the option to extend on a month to month basis not exceeding four (4) months 2020-08-07 11:00 TBH 307/ 2020
For the supply and delivery of fresh meat products for the Food Services Department at Tygerberg Hospital for a twelve (12) month period, effective 1 September 2020 until 31 August 2021 with the option to extend on a month to month basis not exceeding four (4) months 2020-08-07 11:00 TBH 302/ 2020
Supply, Install and Configure Mainframe Print Management Software, including Maintenance and Support to SITA for a period of three (3) years 2020-07-31 11:00 RFB 2170- 2020
Supply and Delivery of Laptops 2020-07-31 11:00 RFT- 2- 2020/ 21
Appointment of a service provider or independent ICT consultants for the provision of outsourced ICT management services for a period of 3 years 2020-08-07 11:00 EWSETA/RFP/14/2020
The appointment of a reputable stationery supplier to supply and deliver stationery for a period of three (03) years (36 months) to all SITA office country wide 2020-07-31 11:00 RFB 2149/ 2020
Provision of Security Services at Department of Public Works, Southern Regional Office,10-18 Prince Alfred Street extension, Pietermaritzburg, for the period of 24 months 2020-08-12 11:00 ZNT 2956W
Supply, delivery, end-user training, demonstration, installation & commissioning of a mobile x-ray c-arm flat panel used for complex orthopaedic trauma surgery: Dr Pixley Ka Seme Memorial Hospital: ONCE-OFF 2020-08-03 11:00 ZNB 9803/ 2020- H
Appointment of a service provider for the supply, delivery and offloading of pharmaceuticals. 2020-07-15 10:00 Q01-2020 21
Request for bid for the appointment of a service provider for implementation, support and maintenance of the ICT network switching infrastructure 2020-07-29 11:00 SADPMR13/2020
Appointment of a service provider for the supply, delivery and offloading of intravenous fluids. 2020-07-15 10:00 Q02-2020 21
Appointment of a service provider for the supply and deliver of masks 2020-07-20 09:00 RLM/DRT/0097/2019/20
Market research analysis for PRASA house 2020-07-14 14:00 RFQ01/0607/2020
Panel of legal firms for the period of 36 months to be appointed as and when required 2020-08-11 12:00 G/G/M/6108/001/2021
Provision of Comprehensive Events Management Services For Transnet SOC Ltd (REG. NO. 1990/000900) Operating as Transnet Port Terminals (hereinafter referred to as “TPT”) For Head Office and all TPT Terminals For a Period of Two Years 2020-08-25 10:00 iCLM HQ 421/TPT
Supply and delivery of clinic medication (purchasing agreement for 36 months-on an as and when basis 2020-07-17 10:00 OPS 19/20-039-04
Procurement of audit, risk and compliance system (3year contract) (re-advert) 2020-08-14 12:00 ULM-MM-IA001/20
Request for the appointment of a service provider for the pest control services to be conducted quarterly for twelve months for SADPMR head office 2020-07-15 11:00 RFQ01/07/2020
Upgrade of Ngqumarheni low level bridge 2020-07-31 12:00 ULM-INFR001/21

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