Issue Date: 
Monday, August 1, 2016

Sub-contractors versus Consortiums and Joint Ventures

The Preferential Procurement Regulations, 2017 states that 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.

In order to help with the confusion that arises from whether or not 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 generally 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 in order to win a specific contract for a set period of time. 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.

In order 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 please attend one of our How-to-Tender workshops. 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.
Tenders are invited for The Actuarial valuation of the Post Employment Health Care Benefits Liability, Revenue and Redundancy Pension Benefits, Long Service Awards and Bonusses. Standard Gratuity pensions and the enhanced gratuity Pension of the NELSON MANDELA BAY MUNICIPALITY AS AT 30 JUNE 2019. 2019-07-22 11:00 CSQ07191669
Service and Calibration for a Millitron "A" Grade Test Lane as per specification available at SCM: Acquisition Office, Harrower Road, North End, PE 2019-07-19 11:00 CSQ07191670
Supply and Deliver CF Pink NCR Paper 2019-07-19 11:00 GQ07192182
Supply and Deliver CFB Green NCR Paper. 2019-07-19 11:00 GQ07192182
Supply and Deliver CFB Yellow NCR Paper. 2019-07-19 11:00 GQ07192182
Supply and Deliver CFB White NCR Paper. 2019-07-19 11:00 GQ07192182
Supply and Deliver CF White NCR Paper 2019-07-19 11:00 GQ07192182
Supply and Deliver CB White NCR Paper. 2019-07-19 11:00 GQ07192182
Supply and Deliver 80GSM Green Bond paper. 2019-07-19 11:00 GQ07192182
Request for expressions of interest for consultancy services for global monitoring for environment and security and Africa (GMES & Africa) 2019-07-31 15:00 No reference number
Supply & Delivery Of 6m Lengths 177 Mm Dia Class 12 Metroflo Mpvc Pressure Pipes. (5.8mm X 28.6kg) 2019-07-22 11:00 SQ07191440
Supply & Delivery of 100 Mm Dia. Stainless Steel Couplings to Fit 100 Mm C.O.D. Fibre Cement Pipes Sans 10525/1 (Cascade or Equal Approved for Repair) O.D. 121-130 Mm. 2019-07-22 11:00 SQ07191440
Supply & Delivery Of 22 MM C/C COBRA TYPE 131 OR S.A.B.S. (COBRA OR Q) SANS 10525/1 APPROVED STOPCOCKS. 2019-07-22 11:00 SQ07191440
Supply & Delivery of 6 M Lengths X 96 mm Dia Class 16 Mpvc Pipes. 2019-07-22 10:30 SQ07191440
Tenders are invited to Collect, Transport and Courier three (3) parcels to Cape Town as per specification available at the SCM Acquisition Office,Harrower Road,PE 2019-07-22 11:00 CSQ07191671
Procurement of APRM 15th anniversary documentary and coffee table book services 2019-08-14 11:00 APRM/ADCT/003/2019
Tenders are invited to Collect, Transport and Courier two (2) parcels to Cape Town as per specification available at the SCM Acquisition Office,Harrower Road,PE 2019-07-22 11:00 CSQ07191671
Request for Expressions of Interest: Individual consultancy services for a study on the drivers of corporate and economic governance performance in Africa 2019-07-26 11:00 EOI /IC/ 11/2019
Supply and Delivery of Dry Granular Chlorine in 25kg Drums, HTH or Approved Equal. 2019-07-23 11:00 SQ07191441
Supply, installation, testing and commissioning of knowledge HUB (E-Platform) at APRM 2019-08-14 11:00 APRM/EP/002B/2019

Pages

Extension of validity period

By Werner van Rooyen

www.howtotender.co.za

31 January 2019

Those of you who are familiar with responding to tenders will know that it is common practice for procuring entities to extend the bid price validity period. We received the undermentioned queries regarding the extension of the validity period of the bid price.

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