The Preferential Procurement Policy Framework Act has been amended and is due to come into effect on 7 December 2011.
What this means is that anyone tendering for work with any government agency or department will no longer be adjudicated, as previously, as per their ownership demographic but rather according to their BEE level.
The rules will be applied as follows:
1. For tenders up to R1 million in value, points will be awarded for BEE compliance up to a maximum of 20 points:
2. For tenders exceeding R1 million in value, points will be awarded for BEE compliance up to a maximum of 10 points:
The other 80 and 90 points respectively will be allocated as is currently the case; financial soundness, pricing, functionality and the ability to deliver the goods or service.
What does this mean for ALL business?
Anyone doing business with government is going to be required to be verified and have a valid BEE certificate. Part of their compliance will be the compliance of their suppliers and so, the domino effect continues. The most likely result of this is that there is going to be greater pressure on ALL companies (whether they work directly with government or not) to be certified and have a valid BEE certificate to hand.
Is this achievable for YOUR business?
Yes! Despite the myths that surround BEE, achieving compliance is not as difficult as it would appear particularly for those companies turning over less than R35 million annually.
To find out more, please speak to our BEE Specialist: 031 564 1155.