Procuring organs of state may stipulate and include local content requirements when issuing tenders. The local content requirements will specify the compliance percentage for the respective goods and services being procured. Prospective bidders are required to make declarations (SBD/MBD 6.2 forms and completion of applicable local content annexures). Subsequent to the awarding of the tenders, the Department of Trade, Industry and Competition (the dtic) is notified, and the respective information is thus forwarded to the South African Bureau of Standards (the SABS) for local content verification. The verification process detailed below is as follows:

Local content is calculated using the following formula:

The definition of ‘local content’ as per SANS 1286 is the portion of the tender price that is not included in the imported content, as long as local manufacturing takes place. The formula for calculating local content follows as:

LC = (1 – x/y) * 100

Where:

x is the value of imported content in Rand (ZAR)

y is the bid price in Rand excluding VAT

The certificates are valid for a period of twelve (12) months and are only applicable to the tender verified for the compliant product/s. Certificates are issued with an annexure detailing the compliant product/s verified.