Johannesburg - The long-awaited BBBEE Procurement Regulations will come into effect on 7 December 2011 and suppliers are advised to familiarise themselves with these changes, which could impact on their chances of winning tenders in future.

While the points’ framework remains the same, the focus will be on the BBBEE Contributor Status of the supplier rather than the HDI-status, which is the preference-system used currently in the awarding of tenders. The Rand values of the different points’ systems will also change and the state will be allowed to issue tenders with a directive that only locally produced goods/services will be procured. This could have serious consequences for suppliers, irrespective which sector they represent since the state could also set minimum local content levels for goods and services in tenders. An organ of state, for example, could dictate that only locally produced building materials, tools and accessories must be used in a construction tender. Foreign companies are already streaming into SA to set up local plants in order for their products to be considered for future tenders under this Designation.

Suppliers forming Joint Ventures for tenders are advised to either submit a BBBEE Certificate for the venture if was incorporated and if not, submit a consolidated scorecard. Suppliers will be prohibited from sub-contracting more than 25% of the value of the contract to another supplier that does not have the same BBBEE status. The only exception will be where the sub-contractor is an Exempted Micro-Enterprise (EME) as defined by the BBBEE Codes of Good Practice.

Suppliers are encouraged to be proactive and submit either an original or a certified copy of their BBBEE Certificate to the state, prior to these changes coming into effect; otherwise they won't obtain points for preference. Also, some state entities have started to disqualify suppliers with lower BBBEE Levels, not only from registering on their supplier databases but also from tendering. Suppliers are advised to obtain expert advice before they're going for their next BEE Verification since verification agents, are by law not allowed to dispense advice to their clients. In essence, your BEE Score could be optimised by having a full understanding of the Codes and your Score Card.