BEE Partner, South Africa Economy Watch

The trickle-down effect of preferential procurement is the only reason that private companies not dealing directly with public entities or organs of state have a reason to contribute to broad-based BEE. To qualify as a supplier to upstream customers, a business requires a high BEE status and, more specifically, a favourable BEE procurement recognition level.

Preferential procurement turns BEE into a competitive policy. Suppliers will be assessed on their BEE procurement recognition level in conjunction with standard drivers such as cost, quality and service. The more a business contributes to BEE, the greater it will be rewarded through customers wishing to buy from them to leverage off the business’s high BEE score. Read the rest of this entry »

Targets

Achievement of the allocated points is based on the measured entity reaching the compliance targets. The compliance targets in this element are fairly ambitious because very few suppliers will have a decent BEE status level, particularly in the early stages of this policy. The Codes accounted for this by splitting the compliance targets from years 0 to 5 with a target of 40% and years 6 to 10 with a target of 50%. The QSE targets are substantially lower than those provided in the generic scorecard. Read the rest of this entry »

All capital expenditure, including fixed property, is included in the total measured procurement spend.

Fixed property was predominantly white owned at the effective date of the Codes. Unless fixed property is part of normal trade, buying a property is going to result in an abnormal total measured procurement spend for that year. The purchase will distort the real procurement intentions of a business, which it may perceive as being unfair. However, because procurement is only measured on an annual basis, it will not have a prolonged impact on the measured entity’s preferential procurement scorecard. Read the rest of this entry »