Imminent changes are looming and will become effective on 1 April 2017. These will affect organisations doing or wishing to do business with organs of state. This as a result of the new Preferential Procurement Regulations issued on 20 January 2017, in terms of the Preferential Procurement Policy Framework Act No 5 of 2000 as amended.
The Regulations have been revised in order to align it to the amendments to the Broad-Based Black Economic Empowerment (B-BBEE) legislation. First and foremost, it encourages procurement from small enterprises.
Furthermore, it encourages all organs of state and parastatals to specify conditions in their procurement processes to the extent that locally produced or manufactured goods will be favoured in certain designated sectors.
The Regulations also clearly stipulate that an affidavit as prescribed by the B-BBEE Codes of Good Practice is acceptable proof of an organisation’s B-BBEE status. Sworn affidavits and SANAS Accredited B-BBEE Verification Agency certificates are the only acceptable form of proof of B-BBEE Status.
The Regulations now provide organs of state the freedom to choose to apply pre-qualifying criteria to advance certain designated group when it comes to awarding tenders. As such, the criteria may include that the tenderer, must:
• have a stipulated B-BBEE status level
• be an EME or QSE
• sub-contract a minimum of 30% of the value of the contract to:
– EME or QSE which is at least 51% black owned
– EME or QSE which is at least 51% owned by black youth (from the ages 14 to 35)
– EME or QSE which is at least 51% owned by black people who are women
– EME or QSE which is at least 51% owned by black people with disabilities
– EME or QSE which is 51% owned by black people living in rural or underdeveloped areas or townships
– a cooperative which is at least 51% owned by black people
In addition, all categories of businesses listed above should ensure that they are registered on the National Treasury Supplier Database. In addition, organisations should consider the impact of these new regulations and plan accordingly now already. Should you require the input of a legal B-BBEE specialist, contact us at SchoemanLaw Inc. to guide you through the changing environment.
Recent Comments