Written by: Johann Barnard
Tenders are big business that could help your small business take a step up the revenue ladder. With government issuing tenders valued at more than R500 billion in the 2013/14 financial year this is a market well worth considering.
The reality is that competition is tough and the qualifying criteria are quite strict.
There are a number of online services that compile the many thousands of tenders issued by government into a format that is easier to view and respond to. One such is OnlineTenders, which has provided some handy tips for business owners who wish to get in on the tender act.
Where to start?
Once you receive the bid documents, analyse them to ensure you can match the technical, skill and experience requirements.
Many tenders require bidders to pay an administrative fee when submitting their documents, which is only part of the cost: you need to consider the time and resources needed to prepare your bid. This could be quite time-consuming depending on the number of forms to complete, how much information you need to gather from suppliers and compiling supporting documentation.
Use this time before starting the bid preparation to assess whether the project, value and prospective client warrant the time and resources needed simply to prepare the documentation.
Find out what the client really wants
Depending on the situation, you could request a face-to-face meeting to make sure you understand exactly what is needed. In certain cases, a compulsory tender briefing meeting is called to provide this clarity.
Completing your tender submission
This can be a hard slog as certain tenders require comprehensive information – certainly with regard to pricing, resources, references and multiple forms to complete.
OnlineTenders suggests that your tender pack will or should include the following important components:
1) The Bid
This is the basic form binding you to the terms and conditions of the tender.
2) Tax Clearance Certificate
This certificate is obtained from your nearest South African Revenue Services (SARS) office – which will be issued only on condition that your tax affairs are in order and paid up. You need to attach the original tax clearance certificate to your tender documents.
3) Price and motivation
This form outlines the price of your bid, including the description of the product you will supply or the experience of the person who will perform the service.
4) Declaration of Interest
This form is used to overcome favourtism and corruption by requiring you to disclose whether or not you have a relationship (friend, family, business leads) with anyone who works for government – that is government in totality, not only the department that issued the tender.
5) Preference certificate
This document relates to your Broad-based Black Economic Empowerment (BBBEE) level and the number of points you can claim as stipulated in the preferential procurement regulations. Bids are generally awarded on the basis of points for your price (generally 90 out of 100) and your BBBEE status (the remaining 10 points).
A Level 1 BBBEE rating will give you 10 points, decreasing to 1 point for Level 8, and zero points if you do not have a BBBEE rating.
6) Contact form
This form contains all your relevant contact and business details, including your company registration, VAT and tax numbers and is considered the document that binds you and the buyer should you be successful in winning the tender.
This information will hopefully prepare you for your first steps to winning large government contracts.
The good news is that President Jacob Zuma announced in his State of the Nation Address in February that government will set aside 30% of certain procurement for SMMEs, co-operatives, township and rural enterprises.