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Understanding The South African Tender Process

How to tender is a question in South Africa that would never get old as every person that wishes to start the tender business in South Africa needs to answer the question of How to tender in order to understand the processes and documentations involved. Understanding how to tender is one of the most crusial steps in winning Private and government tenders or contracts and fulfiling your dreams of becoming the next Tenderpreneur. Most entrepreneurs do not understand the tender process and tend to blame their inability to get tenders awarded to them, to  a currupt system. Most Tenders are awarded by taking into account compliance, Functionality, pricing and B-BBEE demographics which is in accordance  to the preferential procurement act. In this section, we would guide you through a step by step approach to tendering. Remember that tendering is a business. Do not treat it as gambling.

Steps on How to Tender

STEP 1: SELECT THE SERVICES OR PRODUCTS YOU WISH TO OFFER

Over the years we have seen many entrepreneurs attempting to apply for government tenders in more than 30 different sectors and of which they have no mastery. There is nothing wrong with trying your luck every where but the problem with this approach is your finances become quickly exhausted, you waste time searching for tenders and filling forms instead of focusing on opportunities and you would have too much compliance to worry about. Our advise here from Tenderkom in answering the question of how to tender, is that you select 2 to 3 industries or sectors max and you can adjust them proportionately as opportunities arises. Educate yourself about the sectors you choose to tender on and make sure you would be able to meet the functionality requirements of that sector.

STEP 2: GET YOUR DOCUMENTS IN ORDER and register on the necessary databases

Once you have decided on which sectors you want to tender, your next step in answering the question of how to tender or how to start a tender business would be to get your documents in order because without these documents you cannot apply for a tender. Getting the documents alone is not sufficient as you would still need to register on the necessary databases to get a supplier number and be eligible for tenders.  The following are the basic documents which everyone needs as a starting point:

  • Company Registration Certificate
  • Tax clearance Certificate
  • Business Bank account
  • BEE Certifcate or Affidavit

Depending on your industry or sector, addtional documents might be required. For a full list of required documents for tenders please CLICK HERE 

Every company that wants to tender or do business with government must register on the Central Supplier Database (CSD). This database represents government’s approved list of suppliers. There is a general misconception that the Central Supplier Database is the only database Tenderpreneurs needs to register on. This is not true. Private Companies and some municipalities have their own databases that companies must register with if they want to do business with them. For a Full List of Databases in South Africa PLEASE CLICK HERE. Note that this list is not exhaustive

step 3: Find tenders that are relevant to your business as per step 1 above

Once you have your documents in order and have registered on the applicable database, the next step is to start searching for invitations to tender or Request for Quotations (RFQ) as per the sectors which you selected under step 1. You can find Tenders and RFQ in places such as newspapers, tender websites, and in the Government’s weekly Tender bulletins. Be careful of scams and people who would send you fake emails pretending they are from government and cause you to deliver goods for which you might never receive payment. Good news is Tenderkom has put together all the places where you can find tenders in South Africa. CLICK HERE to start Finding tenders.

Entrepreneurs should keep in mind that it does not just boil down to finding tenders in your industry or sector but it is also important that they weigh their capacity and ability  to complete the tenders that they identify in terms of time, Cash flow, skills, staff and equipment. Therefore, it is unwise to bid for a tender for which you would not have the resource or track record and skills to complete once it is awarded.

Tender Documents and bulletins usually have more than 200 pages in length, You can spend a ridiculous  amount of time just trying to find the right tender for your business and because Tenderkom was created to assist businesses navigate throught the complexities of tender application and documentation, we have put together a cost effective method to assist entrepreneurs save time and money. Click here for our Tender Assistance Services

 

STEP 4: COMPLETE THE TENDER APPLICATION FORM AND SUBMIT BEFORE THE DEADLINE

Complete your tender form as per the instruction on the tender document. Consider the following

  • Read through the bid document carefully as it contains all the instructions for that particular tender
  • It is important that your price is as competitive as possible. Avoid being too expensive and also avoid being too cheap to the extend that you erode your profit. Always try to strike a balance. Do a proper cost analysis and research on pricing.
  • Make sure you sign the bid document. Unsigned documents will be disqualified.
  • If you do not understand anything in the Bid document , call the relevant department and ASK. Details for communication are always found on the tender document.

Once your tender has been Completed, you would need to submit it to the relevant department together with all the compliance documents before the deadline otherwise it would not be considered. Take note of the following:

  • The format of submission:You can be required to submit a bid document in hard copy or soft copy or both. Remember to also submit the correct number of copies.
  • If dealing in goods , you might be required to send samples. If samples are requested, sufficient amounts must be supplied to enable the item to be evaluated under the appropriate technical or clinical conditions. Ensure that any requirements related to compliance with SABS specifications are met.
  • Finally , it is important that you make sure your completed bid documents are put in a sealed envelope (Usually a   two way system may apply) and addressed correctly. Ensure that the envelop has the following information clearly written: 1) The Tender number; 2) The person to whom it is address to; 3) The department to which it is to be sent; 4) The address e.g room and floor number, name of municipality, street, suburb and postal code. These details would be found on the tender document. In the event that the two envelope system applies, an envelope for Price Proposal and an envelope for Project Proposal must be in one package. The envelopes must be clearly marked “Pricing” or “Project Proposal” on top and must clearly indicate the bid number. 

Step 5: THE OUTCOME

The fact that you have applied for a tender does not mean you would automatically get the tender. Remember that there are usually more than 1000s people applying.

In the event that you do not win the tender, don’t give up, just keep repeating the process until you win . Tenderkom highly recommends that you request for a debriefing on your bid submission. Receiving a feedback on your failed submitted bid would help you prepare better for the next one. 

In the event that you are successful with your tender bid, you may be required to conclude a service level agreement or fill in and sign a written Contract Form (Standard Bidding Document 7- SBD 7). CLICK HERE FOR THE FULL LIST OF STANDARD BIDDING DOCUMENTS (SBD) FOR DOWNLOAD

Have you checked out The Tender Guidebook For South Africa ? CLICK HERE. This Guidebook contains a masterclass guide on every topic and terminology in tenders with examples of completed tender documents. Learn how to tender and how to win tenders.

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BEE Certificate For SMEs (R300)

BEE Affidavit (Free)

Share Certificate (R300)

Business Profile (R500)

Personal or Employee Tax Registration (R250)

Import License OR Export License (From R1000)

Business Plan (From R3000)

NGO/NPO Registration (R1000)

Non-Profit Company- NPC Registration (R600)

NPO Tax Registration Number (R500)

PBO Tax Exemption (R1999)

Co-operative Registration Including Constitution ( R900)

Business Account (Free)

PAYE and UIF Registration -SARS (R500)

PAYE,UIF & SDL Registration -SARS (R700)

UIF Registration -Labour (R500)

Letter Of Good Standing -UIF (R500)

CSD Registration (R300)

COIDA Registration Only (R500)

Letter Of Good Standing-COIDA (R500)

COIDA Registration PLUS Letter Of Good Standing (R799)

CIDB Registration Grade 1 to 9 (From R1200)

Company Director Change (R400)

Company Address Change (R250)

Company Name Change (R600)

Annual Return (Our Fee- R250)

Drafting of Contracts & Partnership Agreements (FROM R700)

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