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.
Construction of a 6 point swing-over milking parlour. 2018-09-14 12:00 20/2018
Supply & delivery of pipes PVC 110mm x 4m class 12 (SABS 0966) belled on the end both sides. 2018-08-23 10:00 S4W0003023
Ward 84 Youth Skills Development Programme in: Basic Accredited Plumbing Training. 2018-08-23 09:00 SM11900034
Supply & delivery of 109 – 128 ranger / Viking Johnson coupling FBE (outside diameter 100mm fibre cement class E pressure pipe) 2018-08-23 10:00 S4W0003021
Supply Weed eater stihl fs450 2018-08-22 10:00 WC11900739
Supply & delivery of complete fire suit (NFPA) approved 2018-08-23 10:00 DSP0003675
Provisioning, Administration and Management of Wayleave Services. 2018-09-17 11:00 A32-2018/2019
Manufacture, supply & install chess benches 2018-08-23 10:00 DSC0019444
Minor Structure Repairs on P272 2018-09-17 11:00 C252/1718/MS/592
Supply & delivery of 610mm, 2A polymer and cover (lockable with fibre cement manhole complete as well as underground optic fibre warring tape 2018-08-23 10:00 DIE0014244
Supply & delivery of single step brass reducer (reducing sets) 2018-08-23 10:00 DIC0025709
Supply: Lubricants 2018-08-27 16:00 GC11900093
Supply 20 kilogram x nutrient mix 459q 2018-08-22 16:00 GC11900095
Supply: Medical oxygen 2018-08-27 15:00 GF11900114
Supply & delivery of pine rough shutterply pine and chipboard 2018-08-23 10:00 DIC0025681
Request for Proposals: Revenue enhancement strategies 2018/2019 2018-08-29 11:00 ELM 15/2018
Request for proposal for liquid oxygen storage & supply of Liquid Oxygen (LOX) chemical for Magalies Water Klipdrift WTW for a period of five (5) years. 2018-09-17 12:00 RFP/MW/147/2018-19
Provision of Sootblowers, Flue Gas Cleaning & Smoke Stack Maintenance Services. 2018-09-17 14:00 MED00132Gx
Supply and Delivery of Archives Filing System and Binding Tapes 2018-08-24 11:00 11105782
Renovation of DC Office Building at Epping Fire Station (Training Centre). 2018-08-24 14:00 SL1190025A

Pages

7 Disadvantages of Competitive Bidding

The bidding process can be very tedious sometimes. Here are some of the disadvantages of the bidding process.

1.    Leading suppliers may not tender

In Australia, for example, government procurement guidelines only allow suppliers who actually tender to be considered for a procurement decision. If the leading supplier or suppliers do not tender, the purchaser can only consider bids from suppliers who do tender. If leading suppliers are not considered, the purchaser may end up buying inferior product or service... Read More

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