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.
Term Contract: 24 Months : Repairs and Maintenance to Electric, Diesel & Steam Boilers and Associated Equipment: Area 1-7 2019-10-04 11:00 CPTYT 30/ 19
Term Contract: 24 Months : Repairs and Maintenance to Refrigeration Plant and Associated Equipment: Area 1-7 2019-10-04 11:00 CPTYT 29/ 19
Term Contract: 24 Months : Repairs and Maintenance to Refrigeration Plant and Associated Equipment: Area 1-7. 2019-10-04 11:00 CPTYT 23/ 19
To appoint an implementing agent to undertake Green Economy Ecosystem Support work, which entails working closely with industry, investors and government in a number of sectors - including: waste economy, water, renewable energy and energy services; to identify economically viable green economy business opportunities and to unlock barriers that prevent them from being realised ; and to help businesses to green their operations, value chains and product lines, thereby enabling businesses to improve their own resource resilience and stimulating demand for green technologies, products and services. 2019-10-15 11:00 EDT 018- 19
Procurement of a service provider with relevant expertise and experience to undertake phase 2 of the exploration and development of financial mechanisms and models toward improving economic water resilience in the Western Cape. 2019-10-15 11:00 EDT 014- 19
Request for Proposals for appointment of a service provider for provision of Managed Voice and Data Services for a period of three (3) years 2019-10-07 11:00 CMS/ 052019/ 2020
Appointment of a Service Provider to Provide Printing Services for a period of three (3) years for the CCMA as and when required. 2019-10-04 11:00 CCMA/ 2018/ 11(A)- COPS
Appointment of a service provider to provide office space on a lease agreement for the CCMA in the Port Elizabeth office for period of five (5) years. 2019-10-04 11:00 CCMA/ 2019/ 29- PE
Appointment of a service provider to provide office space on a lease agreement for the CCMA in the Kimberly office for period of five (5) years. 2019-10-04 11:00 CCMA/ 2019/ 28- NC
Request For Proposal For Provision Of Training Services – Three (3) Learnerships 2019-10-07 12:00 CDC/ 432/ 19 (A- C)
Supply of Periodicals Subscriptions ( South African Magazines and Journals) to All Public Libraries in KZN Under Arts and Culture. 2019-10-11 12:00 DAC005/ 1920
Water and sanitation programme phase 3A at Sinothile PS (Kuneningi PS), Pongola 2019-10-14 11:00 ZNTU 03972 W
Water and sanitation programme phase 3A at Ntsonyane P School, Ulundi 2019-10-15 11:00 ZNTU 02409 W
Water and sanitation programme phase 3A at Manqwashu P School, Nongoma 2019-10-14 11:00 ZNTU 03978 W
Renovations to Mtuba camp roof, floors and painting at Department of Transport, Mtuba camp 2019-10-14 11:00 ZNQ UM 3089 U
Karee Military Base: Junior Mess, Officer’s mess,Signal Unit Mess, and Upgrading of kitchen Equipment 2019-10-07 11:00 H19/ 013 AI
Saldanha: Military Base: Construction of new sickbay facility 2019-10-04 11:00 CPT1005/ 19
Appointment of contractor to perform general maintenance work at Bitou Campus 2019-10-02 12:00 SCC 82/ 2019
Supply of periodicals subscriptions (international magazines and journals) to all public libraries in KZN under arts and culture. 2019-10-11 12:00 DAC006/ 1920
Appointment of contractor to perform general maintenance work at Beaufort West Campus 2019-10-02 12:00 SCC 80/ 2019

Pages

2 items that determine tender pricing

Article by Werner van Rooyen

www.howtotender.co.za

31 January 2019

Many bidders that respond to tenders struggle when it comes to calculating a price for a specific tender. One of the reasons for this is that a large number of Small Business Owners are usually new to the tender process and therefore they lack the necessary experience to price their bids correctly.

Without getting into the fundamentals of accounting there are two basic items that determine your... Read More

Free Keyword search

Search all tender notices for FREE!

No subscription or registration required!

You can also search by the reference of the the tender.

Advanced search

Search by Issuer, Region or Sector, individually, or using any combination of the three.