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.
First aid level 1 training. 2018-08-24 09:00 SM11900032
The MBDA seeks quotes from suitable service providers for Cleaning Material 2018-08-28 11:00 BDA0818587
Provision of 50kg DPC trolleys for the platforms at cape town station quantity of 50. 2018-09-04 16:00 RFQ163/2018
Supply & deliver Envelopes Manilla B5 250 X 176mm 2018-08-28 11:00 SQ08181255
Supply & deliver Lever Arch Files Pvc A4 70 X 1450mm 2018-08-28 11:00 SQ08181255
Supply and Delivery of Furniture 2018-08-28 11:00 GQ08181883
Supply and delivery of radio wireless. 2018-08-23 11:00 GK11900069
Supply non-sterile exam gloves 2018-08-29 10:00 GA11900171
Mandlakazi Rwss: Construction of 19.8km Water Reticulation Network – Package 3C 2018-09-20 12:00 ZDM043/2018
Construction of Mandlakazi Phase 5.5 Bulk Water Supply: 44km of Bulk Gravity Mains, Associated Reservoirs, Pumpstation and Rising Main 2018-09-20 12:00 ZDM055/2018
Supply Clothing 2018-08-28 10:00 GA11900168
Bid for the appointment of a training provider to conduct an accredited technical trades & operator’s training to municipal officials for each identified programme as and when required from the date of appointment until 30 June 2021. 2018-09-07 12:00 8/2/5/84 (2018-2021)
Ceza Stand Alone Water Supply Phase 2: Reservoirs and Weir 2018-09-06 12:00 ZDM 094/ 2018
Ceza Stand Alone Water Supply Phase 2: Reticulation 13 2018-09-06 12:00 ZDM 093/ 2018
Supply and installation of fault indicators on The 33KV AC Network. 2018-09-10 12:00 23/2018/CTN/INFRA
Ceza Stand Alone Water Supply Phase 2: Reticulation 12 2018-09-05 12:00 ZDM 092/ 2018
Ceza Stand Alone Water Supply Phase 2: Reticulation 11 2018-09-05 12:00 ZDM 091/ 2018
Supply and installation of fault indicators on The 33KV AC Network. 2018-09-10 12:00 23/2018/CTN/INFRA
Ceza Stand Alone Water Supply Phase 2: Reticulation 10 2018-09-05 12:00 ZDM 090/ 2018
Ceza Stand Alone Water Supply Phase 2: Reticulation 09 2018-09-04 12:00 ZDM 089/ 2018

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10 steps in the bid process

Each year, Organs of State invite the Private Sector to submit competitive bids for the supply of goods and services. Organs of State bid requests attract SMME's and large businesses across a wide range of sectors - from office supplies to major construction projects.

Here is an overview of 10 steps you should take to prepare a competitive bid.

1.    Register your interest

Follow the instructions in the bid document to register your interest with the purchasing agency. This important step will help keep you up to... Read More

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