Tenders, B-BBEE and the new Preferential Procurement Regulations 2017
We have previously asked: How important is a good B-BBEE status level of contributor in the tender process?
The answer is still the same: VERY IMPORTANT!
In all tender documents, you will find the NEW Standard Bidding Document 6.2 which is used to claim your Preference Points for B-BBEE. The higher your B-BBEE status level of contributor, the more points you will score on the Preference Points System. Ultimately the bidder or bidders scoring the highest points will be awarded the tender.
One of the major changes in the Preferential Procurement Regulations 2017, is the increase in the threshold value on the 80/20 and 90/10 Preference Point Systems. The following Preference Point Systems are applicable from 1 April 2017 to all Organ of State bids:
- the 80/20 Preference Point System for bids with a Rand value of more than R30,000-00 but not exceeding R50,000,000-00 (all applicable taxes included); and
- the 90/10 Preference Point System for bids with a Rand value above R50,000,000-00 (all applicable taxes included).
This means that on the 80/20 system your B-BBEE status level of contributor will earn you a point out of 20 and on the 90/10 system your B-BBEE status level of contributor will earn you a point out of 10.
To earn these points a potential bidder must have a B-BBEE certificate that has been issued by a verification agency accredited by the South African Accreditation System (SANAS) or the bidder must issue an affidavit stating its B-BBEE status level of contributor. Exempt Micro Enterprises (EME’s) must complete an affidavit regarding their B-BBEE status level of contributor – no verification is required. This is also applicable to Qualifying Small Enterprises (QSE’s) with 51% or more black ownership.
The various B-BBEE status level of contributor that an EME can achieve through an affidavit are:
- EME’s that are not Black-owned automatically qualifies as a Level 4 contributor to B-BBEE,
- EME’s that have 51% or more (but not 100%) black ownership qualifies as a Level 2 contributor to B-BBEE and
- EME’s that have 100% black ownership qualifies as a Level 1 contributor to B-BBEE.
A 100% Black-owned EME will therefor earn maximum points (either 20 or 10, depending on the value of the tender) on the Preference Point System.
A valid B-BBEE certificate of B-BBEE afidavit is very important in the Tender Process. The higher your B-BBEE status level of contributor, the more points on the Preference Point System you are going to score. Ensure your business scores the highest possible score on its B-BBEE certificate or B-BBEE affidavit.
To learn more about this and all the other new developments regarding tenders, please attend one of our How-to-Tender workshops. Tender Workshop dates are published on our website at www.how2tender.com.
Learn to earn.