Industry & Real Estate

Tuesday, 29 May 2018 08:34

Sub-contracting confusion in government tenders

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Many companies tendering for government contracts have come out to complain about the confusion around the requirements pertaining to ‘Sub-contracting”, as prescribed under the current regulations.

Complaints range from government failing to include all the rules in the actual bid documents or not explaining as to the correct calculation of the required percentage of “Sub-contracting” on the part of the bidder, when submitting their tenders.

Bidders are also being frustrated as to the ‘confusion” in terms of, which activities will be accepted to qualify for ‘Sub-contracting”, since the regulations are not being specific on this matter.

Complaints also relate to tender documents, which are not stipulating as to who should be selecting the ‘Sub-contractors” in all ‘instances’ and what documentation is required to proof the existence of the ‘Sub-contracting” relationship between the respective parties.

According to Gerrit Davids, Lead Advisor at TaranisCo Advisory, many companies have approached the agency to assist them to calculate the correct percentage of ‘Sub-contracting levels’ when they are submitting tenders.

David says, “Tenders are also disqualified for not complying with the limitation of ‘ordinary sub-contracting’, since the regulation itself is no longer included as an instruction in the standard bidding documents issued by government.”

“Government tendering makes room for five different areas where ‘Sub-contracting” could be a requirement of which, in any given tender, at least three of these ‘instances’ could be applicable.”

The current regulations have also introduced ‘Sub-contracting”’ as a “Pre-Qualifying Criteria” as well as “Sub-Contracting as a condition of tender” in certain instances where the value of the tender would be in excess of a certain amount.

This is in addition to the three existing categories of ‘Sub-contracting’, which have been part of the regulations since 2011. “A failure to correctly apply these ‘Sub-contracting instances”, could lead to the tender being disqualified for non-compliance.”

Davids cautions bidders, to be proactive in their approach towards ensuring that they fully read all the instructions found in bid documents, since some government officials themselves are also not having a total understanding on how to apply the “Sub-contracting” regulations.

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