30 Subcontracting Agreement

When compulsory subcontracting is applied as part of a tendering process, successful bidders are required to pass on at least 30% of the market value to one or more suppliers registered in a database approved by the National Ministry of Finance for the provision of the necessary goods or services. Preferential procurement should be used by the government to promote transformation,“ including the empowerment of designated groups and MMS by subcontracting and pre-qualification. A person who obtains a mandate from a state body can only enter into a contract of subcontract with the agreement of the state body. Where possible, the government must impose a 30% subcontracting for tenders for 30 million ZAR. The 2017 PPPFA regulations stipulate that compulsory outsourcing, when applied, must be used to promote the same categories of EMEs, QSEs and cooperatives as those provided for with respect to qualification criteria. The preferential contract rules provide that, where possible, governments apply subcontracting conditions to contracts worth more than R30 million. These conditions are that 30% of the value of the contract is awarded to designated groups, the majority of which include black and emerging companies, which may be managed by military veterans or women`s cooperatives for women`s groups or cooperatives of businesses for the disabled. It called on the provincial coffers to ensure that provincial and local authorities comply with the rules and report to law enforcement authorities any interruptions to public projects on the basis of 30% subcontracting. He added that the new policy allowed subcontracting as a condition for R.30 million bids, with bidders required to assign at least 30% of the market value to designated groups where possible.

Nhleko added that all projects that will be awarded after April 1 would be subject to the 30% allocation policy. Public tenders must indicate whether they have pre-qualifying criteria to advance certain groups. Persons who obtain a contract can only enter into a subcontract with the agreement of the state body. The remedial provision in the 2017 pppfa regulations differs from the corresponding provision of the 2011 regulations in that the list of events that could lead to the exclusion of bidders or the blacklisting of suppliers was no longer limited to poor performance under a government contract. In PPPFA`s 2017 regulations, it may be disqualified or blacklisted when a bidder has disclosed incorrect information about its black economic clearance status, local production or any other material governed by the 2017 pppfa regulations that influenced or influenced the valuation of an offer, or did not report subcontracts.

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