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 Full Cream Milk, Long Life. 6x1 Litres Packs. 2018-07-26 11:00 GQ07181837
Specification for the appointment of service provider to supply and delivery Semi-Automatic 9MM Fire Arm pistols, Holsters, Cleaning Kits and 9MM Ammunition for a period of three [3] years. 2018-08-16 11:00 CS&TM 03/18/19
Supply and Deliver COFFEE, Frisco or equal 2018-07-26 11:00 GQ07181837
Development of Internal Capital Adequacy Process. 2018-08-16 11:00 RFP 15/18/19/Internal Capital Adequacy Assessment Process/KN
Provision of Commercial Property for Purchase - Polokwane - Limpopo. 2018-08-17 11:00 05/2018/19
Manufacturing and Installation of Bus Shelters and the Construction of Bus Stops and associated civil works. 2018-08-20 12:00 T/ING/024/2018
General Building Maintenance Services at various Central Grid Substations on an as and when required basis for a period of three (3) years. 2018-08-24 10:00 CORP4493
Appointment of a service provider to provide diesel for SAPS Switching Centres, Nodal Point Sites and High for period of twelve (12) months 2018-07-20 11:00 RFB 1769-2018
Request for proposals for the appointment of a service provider to render Cleaning Services to the Unemployment Insurance Fund. 2018-08-27 11:00 UIF2/2018
Supply Parts for for HP Color Laser Jet CM6030 MFP 2018-07-20 11:00 GM1190011A
Supply Stock ticket pad 2018-07-20 11:00 GM1190006B
Appointment of a service provider for the appointment of a service provider to provide diesel for SITA Switching Centres for a period of twelve (12) months. 2018-07-20 11:00 RFP 1768-2018
Geotechnical Drilling for Foskor’s north and south Pyroxenite Pits 2018-08-20 11:00 T144/18
Supply Hp m880 transfer and roller kit. 2018-07-20 11:00 GM11900037
Supply a Fuser kit for HP Laserjet m880 2018-07-30 11:00 GM11900036
Supply: Fuser kits 2018-07-20 11:00 GM11900035
Supply Plants 2018-07-19 16:00 GC11900022
Appointment of Service Providers for Emergency Accomodation as and when needed until 30 June 2019. 2018-07-25 11:00 6/19
GIZ SAGEN wishes to appoint a consultant to develop an automated Statistical Measurement and Verification Tool (MVT), to 'electronify' the South African National Accreditation System (SANAS) Technical Guide (TG) 50-02 document and with specific reference to the South African National Standard for Measurement and Verification, i.e. SANS 50010:2018, (Edition 2). 2018-07-20 12:00 #83294869
Supply Front hub seal 2018-07-19 14:00 WE11900212

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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