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Thread: Request for comment on B-BBEE Preferential Procurement Policy Framework Act

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    Administrator I Robot's Avatar
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    Request for comment on B-BBEE Preferential Procurement Policy Framework Act

    Broad-Based Black Economic Empowerment (B-BBEE) Preferential Procurement Policy Framework Act gazetted

    20 August 2009

    Members of the public and interested parties have until 14 September 2009 to submit their comments and inputs on the Draft Preferential Procurement Policy Framework Act (PPPFA) that has been gazetted by the National Treasury.

    Preferential Procurement Policy Framework Act (PPPFA) was promulgated as a result of Section 217 of the Constitution which states that all spheres of government must have a mechanism in place that would bring about categories of preference in allocation of contract when procuring goods and services to advance previously disadvantage individuals.

    PPPFA outlines that when government is assessing contracts, it must take into account preference point system which prescribes functionality, price and reconstruction and development programme goals (RDP).

    The preference point system determines that:

    * For contracts below R500 000, 80 points will be allocated for price and functionality and the remaining 20 points for RDP goals
    * For contract above R500 000, 90 points will be allocated for price and functionality and 20 points for RDP.

    In December 2006, when the B-BBEE Codes of Good Practice were approved for gazetting, Cabinet gave the Department of Trade and Industry and National Treasury a mandate to amend the PPPFA to advance the objectives of the B-BBEE Act and the related strategy, as these two pieces of legislation were in conflict of each other. The abovementioned process led to the amendment of the preferential procurement regulations as interim measures to align the B-BBEE and the Codes of Good Practice

    Although the Black Economic Empowerment (BEE) Act does not place a legal onus to private sector companies to comply with its provisions, it does place a legal onus on organs of state to contribute to BEE and including amongst others when developing and implementing a preferential procurement policy.

    Furthermore in achieving the 20 points allocated to preferential procurement element of the Codes of Good Practice, government entities must procure from companies with a good BEE status. This has the trickledown effect which will put pressure to all suppliers and service providers. The implication of the trickledown is the increase in market access for black companies.

    The (interim measures) draft regulations proposed the 80/20 preference point system for procurement of goods and service for a rand value of R1million and 90/10 preference point system above R1million, to strengthen the contribution towards the development of small, medium and micro enterprise.

    Furthermore the draft proposed the allocation of point systems on the following basis:

    * 80/20 principle, 20 points scored by a bidder will be in respect of B-BBEE status level as contemplated in the draft
    * 90/10 principle, 10 points will be in respect of B-BBEE status level.

    Comments and inputs can be forwarded to the following address:

    The Director General
    National Treasury
    Private Bag X115

    Last edited by Dave A; 21-Aug-09 at 07:31 AM.

  2. #2
    Site Caretaker Dave A's Avatar
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    By the looks of this, the only thing that has changed is the threshold between the two scoring systems.

    My gut feel is that they've got this the wrong way around. More emphasis on preferential procurement should be placed on larger contracts and less on smaller contracts. My logic in this is that smaller companies are less capable of "transforming their race profile" simply because they employ and involve far less people.

    Targetting and profiling comes far closer to the individual level as we look at smaller companies. The bigger samples inherent in bigger companies means we should see less deviation from the norm, which makes stricter expectation of norms more reasonable.

  3. #3
    Platinum Member Marq's Avatar
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    I agree.

    I also believe though that this is just another acronym for racist bureaucracy that will lead to disaster.

    We have seen the A's as in AA
    We have seen the B's as in BEE
    Soon to be introduced is the C's as in CRAP

    Thats ... Constitutional Reaction to AHole Planners.
    The cost of living hasn't affected its popularity.
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