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.
Tenders are invited to provide Lumion Essentials Training 2017-12-04 11:00 CSQ11171189
Supply: Gloves 2017-11-29 10:00 GA1180192A
Tenders are invited to provide Revit Advanced Training 2017-12-04 11:00 CSQ11171189
Tenders are invited to provide Revit Intermediate Training 2017-12-04 11:00 CSQ11171189
Supply 20 each x harness; weedeater 2017-11-28 10:00 GA1180193A
Tenders are invited to provide Revit Essentials Training 2017-12-04 11:00 CSQ11171189
Supply: Plants 2017-11-28 16:00 GC11800356
Bidders are invited to provide training for Intermediate Leadership Programme 2017-12-04 11:00 CSQ11171187
Bidders are invited to Repair Scrubber Machine for Fresh produce market Scope of Work 2017-12-04 11:00 CSQ11171187
Supply Klorman Cartridges for Water Purifying 2017-11-28 16:00 GC11800357
Manufacture, Supply and Commissioning of an Inkjet Printing System to Upgrade an Existing Wide Web Printing Press at the Government Printing Works. 2018-01-15 11:00 GPW- M 361
Appointment of a service provider to render hygiene services for the Department of Rural Development and Land Reform: Office of the Chief Registrar of Deeds, Deeds Registry Pretoria, Chief Surveyor General and Surveyor General for a period of 36 months 2017-12-15 11:00 DRDLR (CRD- 08) 2017/ 18
Supply and print ambulance return books x 600 units 2017-12-01 11:00 ZNQ 459/ 17/ 18
Supply and Deliver Bark Chips to City Parks Depot , Sacks Circle Drive Bellville South. 2017-11-28 16:00 GC11800358
Stationery items 2017-12-01 11:00 ZNQ 130 / 2017/ 2018
Appointment of a service provider to render Security Services in Klerksdorp Regional Office for a period of 24 months 2018-01-05 11:00 DMR/ 018/ 2017/ 18
Appointment of three service providers to supply and deliver fresh fruit as and when required over a period of twenty four months (24) . 2017-12-15 11:00 NRFNZG- 027- 2017/ 18
Supply carbolic soap 2017-11-28 16:00 GC11800360
Appointment of a service provider to render Security Services in Rustenburg Regional Office for a period of 24 months 2018-01-05 11:00 DMR/ 019/ 2017/ 18
Appointment of two service providers to supply and deliver fresh and processed vegetables as and when required over a period of one (1) year 2017-12-15 11:00 NRFNZG- 028- 2017/ 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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