10 November 2011 | Paul Snell
Public purchasers in South Africa will have to take account of new rating criteria that measures suppliers’ broad-based black economic empowerment (BBBEE) from 7 December.
The government has changed purchasing rules so that vendors will now be ranked on a much wider set of criteria – such as employment, skills development and their own employment – rather than just black ownership. The regulations now also cover those buyers working at the country’s state-owned enterprises, who will have to follow the rules.
A vendor’s BBBEE score should be taken into account when the tender is assessed. For those tenders worth more than R30,000 (US$3,812) and up to R1 million (US$126,473), 20 per cent of the marks should be awarded to the BBBEE performance. For those contracts worth more than
R1 million, the weighting should be worth 10 per cent of the overall score.
The number of points to be allocated is determined by the BBBEE status level of the vendor, with the full guidance set out in the legislation. Vendors must provide their BBBEE certification status level certificate to prove their compliance. Bidders with annual revenue of less than R5 million (US$635,000) are exempt from the BBBEE Act, but must be able to prove this with an auditor’s certificate when bidding for deals.
The regulations outline that tenders must be assessed objectively, and that the evaluation criteria, the weighting, value and
the minimum qualifying score must be included in the invitation to tender documents.
The regulations also provide new rules aimed at boosting local production and the South African economy. For certain “designated sectors” (or individual products), tenders must include a condition that only locally produced goods or services will be considered. The government has announced the procurement of buses will be one of the first of these.
This condition for local goods and services can be included in other tenders, provided it does not conflict with other procurement regulations.
The new regulations can be found at tinyurl.com/smprefprocreg
