Issue Date: 
Tuesday, November 1, 2016

When to sub-contract?

There seems to be a lot of confusion amongst entrepreneurs when it comes to tenders and sub-contracting, due in large part, to The Preferential Procurement Regulations, 2017 which came into effect on 1 April 2017. Many entrepreneurs ask us whether they should sub-contract or not, when responding to a tender.

Regulation 9 of The Preferential Procurement Regulations 2017, stipulates the following:

1: If it is feasible to sub-contract for a contract above R30 million, an Organ of State must apply sub-contracting to advance designated groups.

2: The Organ of State must advertise this specific tender condition that the successful bidder must sub-contract at a minimum of 30% (of the value of the contract) to (one or more) to an EME or QSE which is at least 51% owned by:

a.    black people;

b.    black people who are youth;

c.    black people who are women;

d.    black people with disabilities;

e.    black people living in rural or under develop areas or townships;

f.    black people who are military veterans;

g.    A cooperative which is at least 51% owned by black people;

3: In paragraph 3 of Regulation 9 it also states that the Organ of State must make available the list of all suppliers registered on a database approved by the National Treasury to provide the required goods or services in respect of the applicable designated groups mentioned above from which the bidder must select a supplier.

Regulation 9 is very clear because its states "the tenderer MUST sub-contract…..". Thus, according to the Regulations all contracts with a value of R30 million and above will have to comply with this Regulation. Read the tender document carefully because somewhere in the tender document it will stipulate whether or not the bidder will have to sub-contract. Follow those rules. If the tender document doesn't contain any sub-contracting instructions then it is not necessary to sub-contract.

The fact is that the tender document will dictate what you should or should not do. Read the tender document carefully, follow the instructions precisely and to the point.

To learn more about this and all the other new developments regarding tenders, please attend one of our How-to-Tender workshops. Tender Workshop dates are published on our website at www.how2tender.com. 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.
Appointment of a service provider to render internal audit services to Robben Island Museum for a period of three (3) years 2018-10-12 11:00 RIM EXE 01-2018 /2019
Design and develop a renewable energy hybrid mini-grid that is sustainable 2018-09-21 12:00 #91119897
Appointment of a Principal Agent to provide Civil and Structural services for the proposed Telecommunication site at Colesberg in the Northern Cape. 2018-10-23 12:00 SENT/030/2018-19
EMC Infrastructure Upgrade. 2018-10-09 13:00 RFP-18/19/28/EMC Infrastructure Update
For ¾ Pillow Top Bed Including Base for NHLS Delmas Laboratory, Mpumalanga. 2018-09-26 08:30 1420581
IBM Infrastructure Upgrade/AVW. 2018-10-09 11:00 RFP-18/19/29/IBM Infrastructure Upgrade/AVW
Biosafety Cabinet 2018-09-21 11:00 RFQ 1446901
1 x Upright Light Microscope 2018-09-25 11:00 1667839
Request for the Installation of access Control to the NICD Cottage Gates 2018-10-01 11:00 0911059/18-19
HP Infrastructure Upgrade. 2018-10-09 11:00 RFP-18/19/30/HP Infrastructure Upgrade/AVW
Microscope 2018-09-21 11:00 RFQ 1469472
Provision of Design, Supply, Install, Test And Commission Of Roof At Limpopo Lumber Politsi. 2018-10-09 12:00 TPIR/TZA/680 (Q) CIDB
For 4x Wooden Oak Filing Cabinets For Evander Laboratory 2018-09-26 10:00 RFQ 1420571
Provision of professional services for the implementation and management of the rural road asset management system in the Frances Baard District for a period of three (3) years. 2018-10-09 12:00 BID 14/18
Request for Proposal for Tourism Strategy and Implementation Plan. 2018-10-09 12:00 2/2/4/2018-19
For 4x Wooden Oak Filing Cabinets For Piet Retief Laboratory 2018-09-26 10:00 RFQ 1420574
For 4x Wooden Oak Filing Cabinets for Mmamethlake Laboratory 2018-09-26 10:00 RFQ 1420570
Request for Proposal and Repair/Sealing of Maokeng Reservoir. 2018-10-09 12:00 3/2/7/2018-19
For time and date Recorder for Tonga Labaratory 2018-09-26 10:00 RFQ 0704979
Establishment of a panel of service providers for provision of financial technical support services to provincial Departments and public entities in the North West Province on an as-and -when required basis for a period of two (2) years. 2018-10-10 11:00 NWDF04/2018

Pages

Advantages and disadvantages of Consortiums

Consortiums are often considered as entities to use when responding to tenders in South Africa. The question that arises is whether to use a Consortium or a Joint Venture when responding to a tender. To help you with this we have compiled a list of advantages and disadvantages for both Consortiums as well as Joint Ventures. In this article we list the advantages and disadvantages of Consortiums. Look out for the same article on Joint Ventures.

Consortiums Advantages:

  • Easy to establish as there are no formal procedures... Read More
Free Keyword search

Search all tender notices for FREE!

No subscription or registration required!

You can also search by the reference of the the tender.

Advanced search

Search by Issuer, Region or Sector, individually, or using any combination of the three.