Step-by-step guide to tendering for governmentFriday, 29/06/2012 - 13:55
Who issues tenders and where to find them:
- Tenders are issued by national and provincial government departments and municipalities, parastatals like Eskom, Spoornet and SABC
- Major national and provincial tenders are advertised on the Government Tender Bulletin, which can be obtained from the Government Printer, Private Bag X85, Pretoria, 0001 or downloaded online at http://www.info.gov.za/documents/tenders/index.htm or http://sa-tenders.co.za/. There are also private sector databases such as Tenderscan, Tradeworld or Sabinet.
- Major newspapers also carry requests for tenders.
- Provincial governments and parastatals can be approached directly. It’s essential that your company be registered on the supplier or vendor database of the relevant state entity as this is a requirement for tender consideration. Government may go to these suppliers directly for smaller tenders.
- Each council or province has their own forms that are required for tendering, so it’s important to contact them directly.
- Respond to advertised tenders by collecting the tender document from your local government office. Only completed original forms are accepted.
- Late submissions are not accepted.
- There are registered Tender Advice Centres (TAC) nationally, but small companies can contact the Small Enterprise Development Agency on 0860 103 703 for information.
Get registered with relevant departments on their database:
Goods and services:
- For tenders under R30 000 the relevant government department will usually approach three registered providers for a quote
- Tenders of more than R30 000 must generally be advertised to all subscribers
- Tenders over R20 0000 must be advertised and formally adjudicated
Building and engineering:
- Tenders over R2-million have to be adjudicated and formally advertised
- Tenders below R2-million are seen as minor and under R100 000 as micro
How do I know my business is ready to tender?
- If it’s a registered business
- If it has a good banking record and relationship with suppliers and clients
- If it is able to deliver on all specifications
- If there is no possible conflict of interest with the government body or anyone adjudicating on the tender application, in the form of directorships or shareholding or family relationships
- If the business has the required cash flow
- If there are qualified staff
- If employees are registered with the Department of Labour
- A sole trader or partnership can tender – however, the business must be licensed or registered with the relevant local authority, must have a bank account and must have up-to-date tax clearance
Keys to success:
- Complete tender documentation in full
- Ensure the business is properly registered and licensed, and that taxes have been paid
- Preference points will be given to previously disadvantaged individuals (PDI) or women. Generally, for tenders over R50 000, 80% will be adjudicated on price and 20% on PDI or gender status. For tenders over R500 000, the 90% to 10% price system applies
- Price plays an important role and the most expensive tenders are likely to be excluded first. Keep in mind that some costs can change, such as labour, material and equipment and this needs to be factored in
Tender documents must contain:
- A VAT registration number
- Any proof of product guarantee – like SABS or ISO marks of quality
- Permits for goods not made in South Africa and prices for goods must be supplied
- A number of forms need to be completed for national and provincial government tenders. These include:
- Invitation to bid, in which the company agrees to be bound by terms and conditions of tender (eg Form ST 36)
- Official cover page of the tender document; (eg Form ST 8)
- tax clearance certificate (eg Form ST 5)
- One form requires: closing date, tender number, price, delivery period (eg Form ST 7)
- Preference point certificate to highlight if there are previously disadvantaged candidates (eg Form ST 11)
- A declaration of interest – businesses are required to declare relationships with members of the tender board or government. A list of these forms can be found on: (eg Form ST 12)
Useful sites include My Business and the Western Cape’s guide to tenders. The latter is one of the clearer sites and provides some guidelines. Note that departments, national or provincial, may also have additional forms or specific forms to fill in, so the above list is merely an indication.
Have you been accepted or rejected?
The Tender Board will notify companies as to whether they have been accepted. It’s important to note that sometimes this can take some time and may not leave unsuccessful companies time to appeal, so experts approached by Corruption Watch advise keeping in contact with the government department and checking on the status of the tender process.
The departments or parastatals are not required to list on their websites who has been appointed, which many feel is a weakness, particularly for small businesses.
Companies can also object to the department or government entity if they feel the period for application is not sufficient, or they may request a copy of the decision by the tender board.
Database of restricted suppliers:
A relatively new development is a database, set up by treasury, of restricted suppliers. It names companies put forward by government entities or departments that are not to be used by government. A contractor or restricted person placed on the site is entitled to contest it in a court of law.
The site sets out which government entity restricted the supplier, the name of the supplier and the reason for the restriction.
The period for which the company has been restricted is also listed. Restriction may not exceed 10 years.
Tender guidelines have been combined from advice given by the Small Enterprise Development Agency, experts and government websites, in particular the Western Cape Government’s site.