Levelling the playing fields

With effect from 7^th December 2012, State Owned Enterprises, such as Eskom, Telkom, ACSA and Transnet are required to follow the revised PPPFA (Preferential Procurement Policy Framework Act) regulations that take into account the B-BBEE status of suppliers for tender purposes.

The new regulations of the PPPFA use the 80/20 or 90/10 rules where 90% of the tender (or 80% in the case of smaller tenders below R1m) is evaluated on the price quoted, and 10% of the tender (or 20% in the case of smaller tenders below R1m) is based on a valid B-BBEE certificate.

From now on all government organisations will have to apply the new regulations in their evaluation of your tenders. The new regulations do not allow for the exclusion of anyone who does not have a valid B-BBEE certificate or specified level. However, the new regulations do take into account the rating achieved. So even if a company does not have a valid BEE certificate, it could still win the tender if the price quoted is below a competitor’s quote that has a valid BEE certificate.

There is also the misperception that the target for black ownership is 50% as has previously been a requirement for some tenders. However, the target according to the Generic Codes of Good Practice for black ownership is 25% + 1 vote.

This important piece of legislation has levelled the playing fields for all entities participating in tenders and should go a long way to improving the quality and transparency of the process.