Issue Date: 
Tuesday, September 6, 2016

New Requirements for Construction Industry B-BBEE

The Revised Construction Sector B-BBEE Codes has been released. There are various interesting changes that will greatly impact companies’ B-BBEE strategies going forward.

There are very interesting changes and amendments with regards to Exempt Micro Enterprises. According to Section 4 of the Final Codes, any enterprise with a total annual Revenue of R10 million or less if it is a Contractor, or R6 million or less if it is a Build Environment Professionals (BEP’s), qualifies as an Exempted Micro Enterprise (EME). This is still more or less in line with the Generic B-BBEE Codes of Good Practice.

The substantial changes come in Section 4.2, under paragraph 4 of the new Codes, where an EME is deemed to have the following B-BBEE status Level, under paragraph 8.3 of the new Codes:

  • If less than 30% Black Owned then “Level Five Contributor” having a B-BBEE recognition level of 80%;
  • If 30% but less than 51% Black Owned then “Level Four Contributor” having a B-BBEE recognition level of 100%;
  • If 51% but less than 100% Black Owned then “Level Two Contributor” having a B-BBEE recognition level of 125%;
  • If 100% Black Owned then “Level One Contributor” having a B-BBEE recognition level of 135%;

The best part of the Amended Construction Sector Codes is the Enhanced B-BBEE Status Level for an EME, whereby despite paragraphs 4.2, an EME is allowed (should they so wish) to maximise their points and move to a higher B-BBEE recognition level, by one of the following three means:

  • Obtain measurement in terms of the QSE Scorecard as a whole, and apply the B-BBEE Status Level and B-BBEE Recognition Level so determined; or
  • Obtain measurement in terms of the Skills Development expenditure category of the QSE Scorecard (paragraph 1.1 of Statement CSC603); only if full points (excluding the bonus points) are achieved for this category will the B-BBEE Status Level and corresponding B-BBEE Recognition Level of the EME be enhanced by one level.
  • Obtain measurement in terms of the Supplier Development Expenditure category of the QSE Scorecard (paragraph 2.1 of Statement CSC604); only if full points are achieved for this category, can the B-BBEE Status Level and corresponding B-BBEE Recognition Level of the EME be enhanced by one level.

All of the above is great news for EMEs. They can now increase their B-BBEE status levels which was not the case in the previous Codes.

To learn more about this and many other tender conditions please attend one of our How-to-Tender workshops. For more information on the tender courses please email Werner at werner@how2tender.com.

This article was written by Werner van Rooyen, Director of HowToTender (Pty) Ltd. which specializes in tender consulting and tender training.

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Advantages and disadvantages of Consortiums

Consortiums are often considered as entities to use when responding to tenders in South Africa. The question that arises is whether to use a Consortium or a Joint Venture when responding to a tender. To help you with this we have compiled a list of advantages and disadvantages for both Consortiums as well as Joint Ventures. In this article we list the advantages and disadvantages of Consortiums. Look out for the same article on Joint Ventures.

Consortiums Advantages:

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