3 Sub-contracting rules to be aware of when responding to tenders

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 that has been implemented on the 1st of April 2017. Many entrepreneurs ask us whether they should sub-contract or not, in responding to a tender and how and where do they get onto the sub-contracting lists.

There seems to be a lot of confusion amongst entrepreneurs when it comes to tenders and sub-contracting. The Draft Preferential Procurement Regulations, have been gazetted and are currently up for review. However, these Regulations are the major cause for the confusion. Many entrepreneurs ask whether they should sub-contract or not whilst responding to a tender.

Finding Sub-contractors

These categories are:

  • Black female owned EME's or QSE's;
  • Black youth owned EME's or QSE's;
  • Black owned EME's or QSE's.

After the Preferential Procurement Regulations were gazetted there is a need for businesses to find sub-contractors.

But where are businesses, which respond to tenders, going to find sub-contractors? We have thought about this and one answer is at Briefing Sessions.

Sub-contractors versus Consortiums and Joint Ventures

The Preferential Procurement Regulations, 2017 states that 30% of all Government Contracts above R30 million must be sub-contracted to specific categories of SMME's. These SMME's include, but are not limited to, black female owned and black youth owned businesses.

Tenders and Subcontracting

Tenders and subcontracting go hand in hand. In fact, subcontracting part of a tender is so commonly placed that in South Africa there are specific rules regulating subcontracting in executing tenders. This is especially true for South African Government tenders.

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Title Closing Date Tender No.
Video Conferencing Rental Solution for a period of 36 months 2018-12-03 11:00 HDA/JHB/2018/017
Appointment of Professional Service Providers to Compile Wayleave Applications on Behalf of Bloem Water for all Infrastructure Under their Control and Jurisdiction (Servitudes). 2018-12-14 12:00 BW249/WLA/18
Small-Scale Embedded Generation: State of Play Assessment and Policy Options to Support Social, Environmental and Economic Benefits for the Department of Energy 2018-11-23 11:00 #83306338
Mechanical Pumps Repair and Maintenance. 2019-01-18 11:00 DIA5635/2018RFP
Tracking the Transition to a Low Carbon and Climate Resilient Society and Economy 2018-11-23 11:00 #83306336
Develop, Manage, Operate and Maintain Balele Caravan & Game park. 2019-01-10 11:00 No refference
Supply, delivery and installation of a palisade fence for Lamberts Bay Caravan Park and the removal of old fence 2018-11-27 12:00 CED 06/2018-2019
Supply and delivery of Material for Foreman Containter Office Block at Clanwilliam Dam in the Western Cape for DWS Construction South 2018-11-15 11:00 WQ7605 WTE
Provision of live work training services within LOU. 2018-12-13 10:00 59CON1887
Supply and Delivery of Water Tanks, Pumps and Fittings at Clanwilliam Dam in the Western Cape for DWS Construction South. 2018-11-15 11:00 WQ7500 WTE
Erection of the Mc 310 K12 Potain Tower Crane Located at Clanwilliam Dam Raising Project Site with the view of Commissioning The Crane 2018-11-15 11:00 WQ7606 WTE
Supply and delivery of Assorted PPE. 2019-01-15 10:00 MPGXC005401
Supply: 1 each x brush cutter & 1 each x chainsaw 2018-11-15 12:00 GD11900588
Supply and delivery of “critical Spares” for the Continued Operation of the Liebherr Mobilmix 2.25 Concrete Batching Plant. 2018-11-15 11:00 WQ7503 WTE
Assurance of Engineering Integrity of the Critical Structural Beams and Critical Bearer Columns of the Liebherr Batch Plant Located at Clanwilliam Dam. 2018-11-15 11:00 WQ7553 WTE
Supply: Batteries rp240-bh 2018-11-21 11:00 GH11900216
Supply and Delivery of Temporary 200mm Dia Municipal By-Pass Pipeline on Right Bank for the Raising of Clanwilliam Dam in the Western Cape for DWS Construction South. 2018-11-15 11:00 WQ7554 WTE
Supply: Tools and equipment 2018-11-20 12:00 GD11900593
Supply: 1 each x hv oil dielectric tester 60kv 2018-11-20 12:00 GD11900594
Re-Commisioning of the Liebherr Batching Plant Located at Clanwilliam Dam Raising Project 2018-11-15 11:00 WQ7497 WTE

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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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