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.
Supply and deliver: swabs x-ray detectable 100x100mm - 8-ply sterile 2018-06-01 11:00 ZNQ 64/ 18/ 19- H
Dressings 2018-06-06 11:00 ZNQ: 33/ 2018/ 19
Nappies 2018-06-06 11:00 ZNQ: 84/ 2018/ 19
Supply and delivery of sound equipment. 2018-05-30 11:00 GK11800720
Supply and deliver Instrument washer. 2018-06-04 11:00 H84/ 18/ 19
Supply of and delivery 100% hydrocolloid dressing carboxymethyl cellulose fibrous 2018-06-08 11:00 ZNQ 103 / 18 / 19
Design, supply, installation, commissioning, training and maintenance of the two stage desalination plant, consisting of pre-treatment and a reverse osmosis (RO) process at iThemba Labs, Cape Town. 2018-06-19 11:00 NRF/ iThemba LABS/ 2017 - 18: 08
Suitable Contractors to Provide Labour & Plant for the Intallation of Culverts in Ward 02. Material will be provided by the Municipality 2018-06-05 12:00 RFQ/411
Supply and install UPS unit KVA double conversion. 2018-06-08 11:00 H96/ 18/ 19
Annual servicing of Heat pumps. 2018-06-11 11:00 H100/ 18/ 19
Service Provider to Supply and Install 4x 71cm Tv’s With 2x Satelite (Supply and Install Decoder Dstv) 2018-06-04 12:00 RFQ/409
Supply with electrical material 2018-06-04 11:00 ben06/ 2018- 2019
Annual service of 2 Theatre tables. 2018-06-11 11:00 H95/ 18/ 19
Supply and Delivery of 2x 20m x 8” Suction Hoses and Accessories 2018-05-31 11:00 SCM103/17/18
For the supply of one (1) electro-spinal mobile operating table with accessories and cart for B3, theatres W & X at Tygerberg Hospital 2018-06-22 11:00 TBH 203/ 2018
Once off pressure testing of 5 Compressors. 2018-06-11 11:00 H99/ 18/ 19
Supply of electromagnetic (EM) simulation software 2018-06-18 11:00 NRF SARAO SDDS 002 2018
Appointment of service provider/s to supply furniture, chairs and soft goods to the SHRA 2018-06-15 11:00 SHRA/ RFB/ ADMIN/ 01/ 201819
Once-Off Supply, Delivery and Installation of Office Furniture for the Department of Rural Development and Land Reform: Mpumalanga Deeds Registry. 2018-06-18 11:00 DRDLR (CRD- 07) 2018/ 19
Kuruman Statistics South Africa: Alternative office accommodation: 461.36m² and 15 parking bays for a period of 5 years 2018-06-15 11:00 LS01/ 2018

Pages

Tender adjudication process

The SBD/WCBD6.1 document must form part of all bids invited.  It contains general information and serves as a claim form for preference points for Broad -Based Black Economic Empowerment (B -BBEE) Status Level of Contribution, and explains how tenders or bids are decided.

The document says:

  • The bidder obtaining the highest number of points will be awarded the contract.
  • Preference points shall be calculated after prices have been brought to a comparative basis.
  • Points scored will be rounded off to two decimal places... Read More
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