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.
The supply, delivery, demonstration & training of ten (10) defibrillators for use in various Departments at Groote Schuur Hospital. 2018-10-12 11:00 GSH8/2018
Differential Count Slide Stainer for Livingstone Haematology Laboratory 2018-09-26 11:00 RFQ 1469470
Supply: Cap and beanies 2018-09-25 10:00 GA11900261
Request for Printing of 10 000 Nmc Booklet 2018-09-25 11:00 1372672/18-19
Support, Maintenance and Upgrading of the VM Environment at the Production, Dr as well as the regional sites 2018-09-25 11:00 1401235
Supply and delivery of Tracksuits for the Or Tambo Games Participants 2018-09-25 16:00 365/09/2018
Request for proposal: Consultancy services for the design of project for unlocking rural and remote areas’ access to basic infrastructure and services (Energy, ICT, Integrated Road Network) 2018-10-19 15:00 AUC/IED/C/376
Supply: 20 each x cutting comfy harness. 2018-09-25 10:00 GA11900262
Supply and delivery of golf T-shirts for the OR Tambo Games participants 2018-09-25 16:00 366/09/2018
Supply Hardware items. 2018-09-21 12:00 GG11900479
Supply Hardware items 2018-09-25 12:00 GG11900478
Supply Ergonomic highback chair. 2018-09-25 12:00 GL11900230
Supply Cutlery and crockery 2018-09-27 12:00 GL11900250
Proposal for the Facilitation of a Boxing Tournament for the month of October 2018-09-25 16:00 367/09/2018
Supply Promotional items 2018-09-25 12:00 GL11900233
Supply 8 gig silicone wrist usb 2018-09-27 12:00 GL11900249
Supply 3 x 25 keys - steel key cabinets. 2018-09-25 12:00 GL11900234
Industrial wet&dry vacuum cleaner-Kuyasa 2018-09-21 12:00 GL11900248
Renewal of Veeam Backup and Replication 2 year subscription 2018-10-12 12:00 T28/2018
Test of Compressors as per Health and Safety Act,1993 in Langeberg Municipal Area 2018-09-21 10:15 Q 35/2018

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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
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