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 consultants on various engineering projects - contract period ending 30 June 2021. 2018-09-21 12:00 EC/PN/NC/061/08/18
Services to clean locomotive toilets within a period of 24 months. 2018-09-25 10:00 KBY/54315
The Construction of High Voltage (HV) 66kV - 132kV Line (foundations, structure assembly and stringing) for various zones within the Limpopo Operating Unit, on an "as and when" required basis over a period of 36 Months. 2018-09-26 10:00 59con1879
Contractor - Construction of Nancefield Concrete Paved Roads and Storm Water. 2018-09-26 11:00 1/2018
Contractor: Construction of Nancefield Stormwater Channel Phase 2. 2018-09-26 11:00 2/2018
Provision of Air Conditioning Maintenance and Repairs for Municipal Office Building Including the Supply, Installations of New and Replacement Units for the Period of Three Years. 2018-09-26 11:00 6/2018
Supply and delivery of digital UHF repeaters, digital UHF mobile radios, digital UHF portable radios and electrical fault locating system for Saldanha Bay Municipality for the period 01 December 2018 to 30 November 2020. 2018-09-28 12:00 SBM 06/18/19
Manufacture, supply and delivery of estimated quantities of various types of low voltage (LV) power & control cables and medium voltage (MV) power cables. 2018-10-02 10:00 Corp4338
Office accommodation 2018-09-24 12:00 NIHSS/OFFICE-01/2018
Panel of Legal Practitioners to Serve for Magalies Water for a period of three (3) years 2018-09-21 11:00 RFB/MW/145/2017-18
Provision of Physical Access Control and Permit Issuing System Upgrade for Airports Company South Africa Soc Limited (ACSA) Sites 2018-09-26 14:00 COR213/2018
The supply and delivery various sizes of Ferrules. 2018-09-21 10:00 PTB1360
Provision for power transformer testing services at various sites for a period of 36 months as and when required basis. 2018-09-21 10:00 ERI/2018/TSS/01
Provision for power transformer testing services at various sites for a period of 36 months as and when required basis. 2018-09-21 10:00 ERI/2018/TSS/01
Maintenance to service roads, fencing and surfaces on an as & when required basis within a period of 24 months. 2018-10-02 10:00 KBY/54318
Provision and Installation of Multifunctional Printers to the Various Administrative Offices in the West Coast District Municipality 2018-09-21 12:00 WDM 26/2018
Rental of Chemical Toilets on an Adhoc Basis for the Provision of Basic Sanitary Services within the Langeberg Municipality for a period ending 30 June 2021 2018-09-21 12:00 45/2018
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
The implementation of Maths and Science programme. 2018-09-21 10:00 CORP4540

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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:

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