26th March 2009
Business Day in-depth feature – BEE & Preferential Procurement.
Preferential procurement is without doubt the driving force behind the Broad- Based Black Economic Empowerment Act (B-BBEE). Effectively this element, which has the same weighting as ownership, 20 points in the case of the Generic scorecard and 25 points on the QSE (Qualifying Small Enterprise) card, forces procurement managers and business owners to constantly evaluate their procurement spend whilst always keeping an eye on their achievable BEE scorecard points says Robert Dalton CEO of BEE Consultex Inc.
Considering the difficulties and costs involved in changing a company’s ownership and management structures it is no surprise that companies are looking to maximise their BEE scores through the preferential procurement element.
One Anomaly, says Dalton, which has surfaced since the Codes where gazetted is the reluctance of majority back owned businesses in the R5 million to R35 million turnover sector (QSE’s) to have their BEE compliancy independently verified. Their reluctance being attributed to the questions…. “why should I pay to be verified when you can see by looking at our skin that we are black?” and “We have been supplying companies, government or councils for years why do we need to pay for a piece of paper to prove we are black?”. Unfortunately the misconception that BEE is all about ownership is still prevalent in the market place.
The B-BBEE act allows for a levelling of the playing field giving all business the same opportunities, however, suggests Dalton, for the system to work it is imperative that all businesses big, small, black owned or white owned embrace the process fully. We cannot have one rule for one business and a different one for another, how could a procurement manager ever be sure that a black business is indeed owned by the black individuals professing to be the owners? Further how could he be sure it was not a fronting exercise? Dalton argues that the only way forward, as the B-BBEE Codes of Good Practice allow, is for independent BEE compliancy verification of companies, undertaken by SANAS accredited verification agencies thus giving a clear, unbiased and consistent yard stick, which those responsible for procurement, can use with impunity.
