More often than not, we are told by clients that they don’t see why they should be Broad-Based Black Economic Empowerment (B-BBEE) compliant. They argue that it is an expensive process to become BEE compliant and they feel it is a worthless exercise and not worthwhile.
If you have a good BEE scorecard to possibly qualify for tenders there are certainly prospects in exploring tender opportunities. To eliminate the unfairness of the awarding of tenders, companies should know that they have recourse in law should they become aware of unfair tender processes.
Section 217(1) of the Constitution of the Republic of South Africa, 1996 (the Constitution) states that when an organ of state in the national, provincial or municipal sphere of government or other government institutions tender for goods or services, it must do so in accordance with a system which is fair, equitable, transparent, competitive and cost-effective.
The Preferential Procurement Policy Framework Act 5 of 2000 (“PPPFA”) and its accompanying regulations further gives purpose to Section 217(1) of the Constitution. Other legislation regulating various government entities (such as the Public Finance Management Act and the Municipal Finance Management Act for example) regulates such entities and obligates them to have supply chain and procurement policies which regulate their procurement processes. Such policies must meet the requirements of the Constitution and the PPPFA as well as any added regulating legislation, including the provisions of the BEE Act.
An organ of state is therefore required to ensure that it complies with the values protected in section 217 of the Constitution when awarding tenders. Compliance with these values and principles places a duty on state organs which holds that they must follow a competitive bidding process. It must be fair, objective and impartial and the required procedures as laid out by the relevant policies and governing legislation must be applied consistently.
If a company meets the requirements to tender for government work, and they are well informed of the relevant procurement policies of the various government bodies, it would be more beneficial to a company to approach a court to determine whether government has fairly awarded a tender and challenge a process that they feel did not meet the Constitutional principles for public procurement than not to have a valid BEE certificate with a good rating as government spends billions annually through tendered work.
ABOUT THE AUTHOR
Tibely Ebersohn obtained her LLB from The University of South Africa in 2014 and joined SEESA in June 2016. She has since been employed as a Labour and BEE Legal Advisor at SEESA Newcastle.