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.
Terms of reference for acquisition of three legal firms to appear on Municipality's panel of attorneys. 2018-09-24 11:00 MLM/MM/01/2018/19
Radio Presenter: RSG Landbou. 2018-09-24 11:00 848 - 2018/19
Testing of various signaling equipment, nationally with an aim of framing an approved list of suppliers. 2018-09-25 10:00 RFP: HOAC-HO-27348
For the Avaya and Verint Maintenance and Support. 2018-09-25 10:00 CORP4543
Appointment of a service provider for the provision of various Employment Wellness Programme (EWP) for a period of three (3) years. 2018-09-25 11:00 NYDA2018/1/EWP
Once off major service for air-conditions and fridges for Gauteng region 2018-10-07 11:00 RFQ GAU06-2018/19
The RAF hereby invites experienced, suitably qualified service providers to provide leasing of office space for Polokwane Customer Service Centre (SCS) for a period of five (5) years. 2018-09-25 11:00 RAF/2018/00038
Appointment of a service provider to supply and delivery of road marking paint and road traffic signs, as well as road marking service and installation of road traffic signs as identified arrears on as and when required basis for a period of 36 months. 2018-09-25 11:00 RWCLM-5/005/2018/2019
Renovation of Workshop at Tshepong Hospital in Klerksdorp. 2018-09-25 11:00 PWR55 /18
Supply, support and maintenance of public key infrastructure, software, services, development and licensing. 2018-09-25 10:00 50S/2018/19
Supply and Delivery of Ferric Sulphate to the Faure and Voelvlei Water Treatment Plants and various Wastewater Treatment Plants. 2018-09-25 10:00 46G/2018/19
Implementation of Non-Motorised Transport Facilities in Fisantekraal and Durbanville. 2018-09-25 10:00 49Q/2018/19
Design and construction of the Lusikisiki Temporary CNC in the Eastern cape operating unit. 2018-09-25 10:00 EZN 5743
Provision of Scheduling And Planning Fundamentals Training For TFR Operational Control Centre (OCC) For A Period Of Three (03) Years. 2018-09-25 10:00 RFP HOAC-HO-27338.
The Supply and Delivery of Three Phase Electrical Power Line Telecommunication (PLT) Prepayment Meters. 2018-09-25 10:00 48G/2017/18
The provision of NDT (Non Destructive Testing) services for Kusile Power Station for a period of twelve (12) months. 2018-09-25 10:00 MPGXC005264
Overhead crane, hoist and crawler beam maintenance service and spares supply on an “as and when required” basis. 2018-09-25 10:00 MPGXC004978 R
Construction of Moyeni New Police Station. 2018-09-25 11:00 19/1/9/1/20 TB(18)
RE- Advertisement: Three Year Contract for the Supply of Fuel and Fuel Management System to Okhahlamba Local Municipality. 2018-10-05 12:00 8/1/1/4/1 - TEC11/2018
Aerial Fire Fighting for the period of three years. 2018-10-08 12:00 E/07/18-19

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.