Thursday, 14 February 2019

Suppliers battling with Local Content in Tendering

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The revised Preferential Procurement Policy Framework Act Regulations of 2017 clearly stipulates that the Department of Trade & Industry (DTI) has the regulatory mandate to designate, ‘industries, sectors and sub-sectors for local production at a specified level of local content”.  

The Regulations further instruct that, “only locally produced goods, services, works or locally manufactured goods, with a stipulated minimum threshold for local production and content” must be considered, where a designated sector has been declared by the DTI.  

Organs of state may include the stipulation, even where no such sector has been designated per se. 

Ever since the introduction of the Local Content and Production regulations, both organs of state and bidders have struggled with its correct interpretation and application through the required Forms that must be completed to meet the required compliance levels as stipulated.  

According to government, most bidders are not correctly completing the required documentation, with many tenders being disqualified and declared as non-responsive. 

Bidders also, do not conduct sufficient research as to whether the products or services they intend to supply, or the material to be used in a construction related project are designated for local content and production or not. 

For example, construction companies are of the opinion, that they are not supplying goods to government, hence they do not need to complete the Forms required to declare the levels of local content and production. 

However, to the contrary, most of the products that have been declared for local content and production, are found in the materials to be used for construction, and a failure on the part of the bidder to complete the required forms, will certainly lead to their tender being declared as non-responsive. 

According to Gerrit Davids, Lead Advisor at TaranisCo Advisory CC, “most bidders are not only, very well informed about the requirements of Local Content and Production, they also view the Forms as bureaucratic in nature, with the result they show resistance to completing it fully.” 

Davids says, “Bidders are well advised to upskill themselves on the correct approach to completing these forms, since he’s heard of a bidder, being disqualified for omitting a single zero from his final tender amount, when completing the required Forms.”  

TaranisCo Advisory is planning a series of workshops for suppliers on how to correctly complete the required Forms and bidders also have to choice to host it as an in-house presentation.  

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For more information contact: Gerrit Davids | Lead Advisor | TaranisCo Advisory CC | E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it. | Cell. 082 496 1657