BBBEE certificates have become a standard requirement for tenders, and are critical to position your company to win more tender bids. Many tenderers automatically disqualify tender submissions if these certificates are not included or if the BEE compliance level on the certificates does not meet the stated requirements.
Revised Preferential Procurement Regulations have finally made a B-BBEE compliance scorecard mandatory when tendering for government tenders. The revision now brings the PPPFA into full alignment with the B-BBEE Act. This change has had a major positive effect on the way companies prepare for and implement B-BBEE because they have absolute confidence that their BEE status will be used to better their chances of winning a tender.
Tenders are awarded based on a points system. The bidder who achieves the most points wins. Various other criteria are used to award points including price, quality, reputation and even availability. In many cases hundreds or even thousands of bidders submit a tender offering the same or similar products at the same or similar prices.
The BEE score offers bidders a major advantage in that a competitor with a similar product at a similar price may not earn as many points because of their BEE status. The Preferential Procurement Regulations 2017 states that from 1 April 2017, the following is applicable for state tenders:
- Tenders of R30 000 – R50 million in value are adjudicated according to the 80/20 preference point system.
- Tenders above R50 million in value are adjudicated according to the 90/10 preference point system.
This means that, depending on the value of the tender, you are guaranteed either the 20 or 10 (or part thereof) points depending on your BEE certificate level. The conversion table is as follows: