All entities participating in the Broad-Based Black Economic Empowerment (B-BBEE) verification process are aware of how important preferential procurement is to the entity’s scorecard, and the level they will obtain.
Keeping this in mind, entities should always ensure that they have a proper supply chain as well as supply chain management system in place. All employees working with suppliers and purchasing must always ensure that the suppliers they are procuring from have valid B-BBEE certificates. They must also know when a B-BBEE certificate is acceptable and valid.
Should a supplier not be in possession of a valid B-BBEE certificate a business has 2 options:
- Put pressure on the supplier to obtain a B-BBEE Certificate as soon as possible.
- Change your supplier to an entity who does have a valid B-BBEE certificate.
A business can apply pressure on their suppliers to obtain a valid or better B-BBEE certificate. If your business is 1 of their big clients they will want to ensure that they do not lose your business as a result. This is in most cases the same reason why an entity needs a valid B-BBEE certificate.
Most entities will say from the get-go that they are not willing to change suppliers seeing as they have a very good price with the current supplier. They will have to think how this will affect their procurement points and their B-BBEE rating. If the fact that a business’s biggest supplier does not have a valid B-BBEE certificate and it drastically impacts the rating of the business. They stand a chance to lose income in the form of tenders and projects as a result of a supplier’s poor B-BBEE level.
Make sure when dealing with suppliers that you are not penny wise but pound foolish. Ask your legal advisor to look at your suppliers and their B-BBEE certificates to be able to advise you accordingly.
ABOUT THE AUTHOR
Geralene van Wyk obtained her BA (Psychology) and LLB degrees from the North-West University. After her studies, she completed her articles in Pretoria and was admitted as a practicing attorney in 2006 and a conveyancer in 2007. She joined SEESA BEE in 2011 as a legal advisor and is currently a SEESA BEE National Training Senior Legal Advisor at the Pretoria Head Office.