Issue Date: 
Monday, August 24, 2015

Code of Good Practice is causing confusion

The government is committed to break the barriers that have been hindering small companies from winning tenders. One of the biggest challenges for small companies was the red tape that often would hinder their tender success.

The amended broad-based BEE Code of Good Practice came into effect on 1 May 2015. It aims to have more small businesses classified as micro-enterprises. It also aims to remove the onus for small, black-owned businesses to go through the BEE audit process. One of the major changes to the Code of Good Practice is that, companies' BEE recognition levels have been boosted to improve opportunities for them in tender bidding.

Previously, level-one Broad-Based Black Economic Empowerment (B-BBEE) status was not being recognised on the procurement system if a company was using an affidavit as proof of company's turnover and ownership. The broad-based BEE codes also classified a company as an Exempt Micro-Enterprise (EME) only when their turnover was less than R5 million.

The newly amended codes have now increased the turnover threshold for micro-enterprises to R10 million. The amended codes also remove the need for a company to obtain an auditor's letter or a certificate from a verification agency. Instead, a black-owned micro-enterprise can provide a sworn affidavit attesting to its turnover and ownership to qualify for EME status.

What do the amendments mean?

These amendments mean more companies, which have a net turnover between the stipulated ranges, can now bid for tenders without having to produce a B-BBEE certificate. This is what most small companies have been struggling with as they were not scoring enough points due to the absence of such B-BBEE certification.

However, the newly amended Code of Good Practice seems not to align with the Preferential Procurement Policy Framework Act. This Act is strictly followed by many tender-issuing organizations. This has caused a lot of confusion and frustration.

According to reports, the new EME requirements are leading certain departments to be more cautious about taking on new suppliers. They believe that the more lenient requirement of just an affidavit makes fraud or fronting prone and easy. Importantly, small companies must be warned that even when they have a sworn affidavit, some companies may require more paperwork as additional proof.

Companies claiming to be 100% black-owned now may be vigorously scrutinized as many tender-issuing organizations fear the risk of fronting. These risks could have very negative effects, especially if we take into account the steep penalties for fronting in the B-BBEE Amendment Act. This can make the organization itself to be found guilty of 'fronting' if the necessary measures are not put in place to weed out the potential fronting practices by its suppliers.

The government is doing its best to enable small and medium businesses to get a slice of the cake. However, don't rely too much on their efforts as it can happen that they forgot to tie the loose ends. Be proactive and make sure you've got your ducks in a row.

Title Closing Date Tender No.
Supply, Delivery, Installation, Commissioning and Maintenance of Heart Lung Machine at Charllotte Maxeke Academic Hospital and Steve Biko Academic Hospital 2017-08-11 11:00 GT/ GDH/ 101/ 2017
Sterile Gauze Swabs 100 X 100mm 8ply (500 Pouches in a box) 2017-08-04 11:00 ZNQ 092 2017/ 18
Dressing Transparent Polyurethane Adhesive Dressing Frame Style 10 cm x 12 cm (box of 50) x 1500 boxes. 2017-08-02 11:00 42/ 05/ 17
Dressing hypafix, low allergy dressing retention sheet (10 cm x 10m) x 1200 rolls 2017-08-02 11:00 35/ 05/ 17
Analyser blood gas (cassette type) x 1 -(specification attached ) 2017-08-02 11:00 78/ 05/ 17
Suture Ethilon/Nylon black monofilament reverse cutting double (RC2),0,2 Metric ,30cm USP 10/0 u7000 /A2516 (box of 12) x 80 boxes 2017-08-02 11:00 97/ 07/ 17
Warming unit, patient forced air x 10 2017-08-02 11:00 82/ 05/ 17
Warming unit fluid x 4 - (specification attached) 2017-08-02 11:00 83/ 05/ 17
Supply and delivery of Prosthetic Consumables 2017-08-11 11:00 GT/ GDH/ 103/ 2017
Supply and delivery of Urology Consumables for Charlotte Maxeke Johannesburg Academic Hospital 2017-08-11 11:00 GT/ GDH/ 102/ 2017
Supply: 06 boxes suture vicryl 3/0 v497 box/12 2017-07-31 11:00 ZNQ 115/ 17/ 18
Supply: 36 units tube e/t plain 2.0mm 2017-07-31 11:00 ZNQ 424/ 17/ 18
Supply: 07 boxes opthalmic sponcals including stick box/180 2017-07-31 11:00 ZNQ 415/ 17/ 18
Supply: 102 boxes suture monocryl gauge 3/0 w3202 box/12 2017-07-31 11:00 ZNQ 399/ 17/ 18
Supply: 100 units tube e/t plain 6.5mm. 2017-07-31 11:00 ZNQ 428/ 17/ 18
Supply: 100 units tube e/t plain 7.5mm 2017-07-31 11:00 ZNQ 430/ 17/ 18
Supply: 33 units tube e/t plain 3.0mm 2017-07-31 11:00 ZNQ 425/ 17/ 18
Supply: 974 units splints i.v neonatal 2017-07-31 11:00 ZNQ 416/ 17/ 18
Supply: 100 boxes suture nylon 2/0 8290cc=w795=820-79 box/12 2017-07-31 11:00 ZNQ 401/ 17/ 18
Supply: 1500 Units needle spinal pencil point (brown) 26gx90mm 2017-07-31 11:00 ZNQ 457/ 17/ 18

Pages

Functionality and Tenders

In all competitive bids (tenders) you as the bidder will have to respond to Functionality. You will need to score a set minimum number of points, measured as a percentage, on Functionality of a competitive bid (tender) in order to advance to the next phase of evaluation in the tender process.

Usually Organs of State evaluate competitive bids (tenders) as follows:

  • The tender response is evaluated on Functionality where the bidder must score points out of a maximum of 100 points.
  • A threshold of between 65 to 75 out of 100 points... Read More
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