Financial Data
Updated 28 Sep 2020

You, your customers and BBBEE

The practical outcome of the Codes of Good Practice is that more and more companies are obtaining BBBEE ratings (either self-evaluated or from a ratings agency), and are insisting that their suppliers do the same. Here's what it means for you.

02 April 2012  Share  0 comments  Print

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In terms of the Codes, a BBEEE rating agency must be accredited by the South African National Accreditation System (SANAS) in order to issue BBBEE ratings that will be recognised by the dti.

It will take quite some time - possibly years - before all existing agencies are accredited.

In the interim, however, it is common practice and quite reasonable for a company to insist that you submit a BBBEE profile or rating based on the generic scorecard, when tendering for work.

It is fair for a company to ask you to do the following:

  • Submit your scorecard, showing points achieved in each area.
  • Complete a BBBEE evaluation form supplied as part of a formal tender document.

Most large companies have been proactive about BBBEE and have for some time included compliance as an important criterion in the awarding of contracts.

Therefore it makes sense to do a detailed assessment of your BBBEE contribution as soon as possible.

It is not reasonable, however, for a company to do the following:

  • Award contracts based only on BBBEE compliance with no consideration for cost or quality.
  • Refuse to accept a score calculated using one of the dti-recognised scorecards.
  • Rate BBBEE compliance purely on ownership (which contradicts government guidelines).

Remember, though, that private companies will always be free to develop their own procurement policies, which may include criteria such as a specific level of BBBEE compliance.

Be prepared

Preparing proposals, tenders and BBBEE ratings takes time and resources that few smaller businesses can afford to waste. Maximise your chances of securing the work by following these tips:

1. Review tender documents with a fine toothcomb to ensure that you are able to meet all the necessary conditions BEFORE you decide whether to pitch or not.

2. Request copies of all your clients' procurement policies. Make sure you understand their priorities and conditions of work. If necessary, make appointments to see the procurement heads or relevant decision-makers to clarify any points that could negatively affect you.

Find out the company's stance on issues such as self-ratings and the use of the sector charters that have not yet been gazetted.

While they might not be prepared to change their current procurement policy, a sincere, non-aggressive discussion will highlight your concerns and reinforce your commitment to the working relationship.

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