Understanding the Local Content Declaration (SATS 1286) for Manufacturers

In an effort to rebuild South Africa's industrial base, the government has implemented strict 'Local Content' rules for public procurement. Under the Preferential Procurement Policy Framework Act (PPPFA), manufacturers must provide proof that their goods are actually made in South Africa. The standard used for this proof is <strong>SATS 1286:2011</strong>. If you are bidding for a manufacturing tender, mastering this declaration is the difference between a successful award and an administrative disqualification.

What is SATS 1286?

SATS 1286:2011 is a technical specification provided by the South African Bureau of Standards (SABS). it provides a standard formula to calculate local content. Local content is defined as that portion of the tender price which is not included in the 'imported content,' provided that local manufacture takes place.

The Mandatory Thresholds

The Department of Trade, Industry and Competition (dtic) has 'designated' certain sectors for local production. If your product falls into these sectors, you <strong>must</strong> meet a minimum percentage threshold. Examples include:

• <strong>Textiles and Clothing:</strong> Usually 100% local content.
• <strong>Furniture:</strong> Between 85% and 100% depending on the item.
• <strong>Steel and Canned Vegetables:</strong> specific high thresholds apply.
• <strong>Electrical Cables:</strong> Typically 90% local content required.

How to Complete Your Declaration

When you submit your bid, you must include the <strong>Declaration Certificate for Local Production and Content (SBD 6.2)</strong> and the following spreadsheets:

Annexure C: Local Content Declaration - Summary Schedule

This is the most critical document. It lists every item you are supplying and calculates the final local content percentage. This must be submitted <strong>with your bid</strong>.

Annexures D and E

These are the supporting schedules. Annexure D tracks the imported content, and Annexure E tracks the local labor and overhead costs. While sometimes kept on-site for audit purposes, many departments now require these in the initial bid pack.

Common Local Content Mistakes

Conclusion

SATS 1286 is more than just paperwork; it is a mechanism for protecting South African jobs. For manufacturers, understanding the technicalities of Annexure C and the dtic thresholds is essential for compliance. By accurately calculating your local content and providing the required evidence, you not only win points for preference but also position your business as a partner in national industrialization.