Issue Date: 
Monday, October 20, 2014

The new QSE B-BBEE Scorecard

By Werner van Rooyen

www.how2tender.com

20 October 2014

On Friday 10 October 2014 the Minister of Trade and Industry, Minister Rob Davies, published the long anticipated draft Phase 2 B-BBEE Codes of Good Practice for public comment. In Phase 2 the Qualifying Small Enterprise (QSE) statement, Code 600, sets out the guidelines for measuring the B-BBEE Status Level for QSE’s.

When the Amended Codes of Good Practice first came out there was no QSE Scorecard. This created a lot of confusion because it looked like QSE’s will have to comply with the Generic Scorecard which is a monster of a scorecard to comply with. Now, exactly a year later, the DTI as published a QSE Scorecard.

For those of you that are familiar with the current QSE Codes, these new Codes might come as a bit of a shock. The main difference between the Old Codes and the New Codes is that with the Old Codes QSE’s were allowed to choose four of the seven elements of B-BBEE and comply only with those four B-BBEE elements. The New Codes doesn’t give QSE’s that luxury - QSE’s have to comply with ALL five of the new elements on the Scorecard.

The old QSE scorecard versus the new QSE Scorecard:

Element Old weighting New weighting
Ownership 25 25
Management Control 25 15
Employment Equity 25  
Skills Development 25 25
Preferential Procurement 25  
Enterprise & Supplier development 25 30
Socio-economic development 25 5
Total 100 100

There are several differences between the old and the new Codes but the two most important ones are:

  • Employment Equity becomes part of Management Control in the New Codes; and
  • Preferential Procurement becomes part of Enterprise and Supplier Development in the New Codes.

I have said it before and I am going to say it again: the New Codes haven’t been reduced to five elements; instead it has increased to eight elements! The reason is simply because Employment Equity has become part of Management Control and is still a sub-element that has to be complied with and Preferential Procurement became a sub-element of Enterprise and Supplier Development. Supplier Development is a totally new element that has to be complied with, thus increasing the previous seven elements to eight elements.

The reason why all of this is important is because when you respond to a tender it is important to have a good B-BBEE Score. It is going to be extremely hard for QSE’s that enjoys a Level Four or great B-BBEE status Level to keep that Status Level, especially if the QSE does not have any Black Ownership. Even then, Black Ownership is not going to guarantee a good B-BBEE Status Level.

The ripple effect of all this is you as QSE is going to find it more and more difficult to win tenders if you do not have a good B-BBEE Status Level and to achieve a good B-BBEE Status Level is going to become harder and harder, especially if you do not have some kind of Black Ownership in your QSE.

Please visit our website at www.how2tender.com for more on these as well as other interesting topics. You will also find our Tender Manual there - the Tender Manual guides you through the whole process of responding to a Tender or a Request for Proposal.

Until next time.

When Must I Sub-Contract?

There seems to be a lot of confusion amongst entrepreneurs when it comes to tenders and sub-contracting. The Draft Preferential Procurement Regulations, have been gazetted and are currently up for review. However, these Regulations are the major cause for the confusion. Many entrepreneurs ask whether they should sub-contract or not whilst responding to a tender.

The Draft Preferential Procurement Regulations stipulates the following: 

  1. For contracts above R30 million, the tenderer MUST sub-contract a minimum of 30% of the value of the... Read More
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