Is your business missing out on B-BBEE points due to non-compliant suppliers?
By procuring from empowering suppliers with favourable B-BBEE status levels, entities will receive recognition on the Enterprise and Supplier Development Scorecard. They can gain up to 27 additional points on their scorecards.
The following are a few reasons why companies should properly vet their suppliers to ensure they are B-BBEE compliant:
- Preferential Procurement is classified as a priority element. Companies failing to achieve at least 40% of the available points on this indicator will see their overall B-BBEE score be discounted by one level;
- Procurement is a low-cost; high-yield initiative. Procurement points are not obtained through donations but rather by procuring from suppliers with favourable B-BBEE procurement recognition levels;
- Obtaining full points on procurement will see you already more than a quarter of the way to a level 1 certificate, this being done with no additional contributions being forked out by the entity;
- 51% or 100% Black-owned EME or QSE entities in the construction industry level may be enhanced by one level if they receive full Preferential Procurement and Supplier Development points.
To score maximum points for Preferential Procurement when being measured on the Codes of Good Practice scorecard, entities need to ensure that:
- 80% of their Total Annual Expenditure must be procured from empowering suppliers (based on their B-BBEE procurement recognition levels);
- 15% of their Total Annual Expenditure must be procured from empowering suppliers that are Qualifying Small Enterprises (based on their B-BBEE procurement recognition levels);
- 15% of their Total Annual Expenditure must be procured from empowering suppliers that are Exempted Micro Enterprises (based on their B-BBEE procurement recognition levels);
- 50% of their Total Annual Expenditure must be procured from empowering suppliers that are at least 51% Black owned (based on their B-BBEE procurement recognition levels);
- 12% of their Total Annual Expenditure must be procured from empowering suppliers at least 30% black women-owned (based on their B-BBEE procurement recognition levels).
Preferential Procurement allows entities the opportunity to enhance their B-BBEE score without incurring additional costs.
For expert guidance to obtaining the highest B-BBEE level at the lowest cost, contact your nearest SEESA BEE Labour Legal Advisor. Alternatively, leave your details on our website, and a SEESA representative will contact you.
About The Author:
Ivan Husselman started his career at SEESA in June 2017. He is currently employed as a Labour, B-BBEE and Compliance & Transparency Legal Advisor at the SEESA Klerksdorp branch. Ivan obtained his BCom Law degree from the North-West University Potchefstroom.
Resources:
- Generic Scorecard in terms of the Amended Codes of Good Practice issued in terms of Section 9(1) of the Broad Based Black Economic Empowerment Act 46, of 2013;
- Qualifying Small Enterprise Scorecard in terms of the Amended Construction Sector Code issued in terms of Section 9(1) of the Broad Based Black Economic Empowerment Amendment Act 46, of 2013.