2011 has been the most successful year to date for BEE implementation for Government Departments. One of the last major milestones was reached in June 2011 when the Treasury gazetted their revisions to the Preferential Procurement Policy Framework Act (PPPFA). This act is the tender act and is designed to consistently and independently evaluate tenders using a points system. We would hope that tender fraud and corruption will be rooted out with proper implementation of these revisions.
When the Treasury announced the revisions we said problems will still exist, now we are going to discuss these problems in more detail and how we can solve them.
- Training problems of tender officials
- Tender officials have in the past been using their own interpretations to implement BEE. The new revisions now require only a BEE status issued in terms of the B-BBEE Codes of Good Practice to be used. Points can only be awarded based on the tender recognition table.
Tender officials will require a good knowledge of B-BBEE in order to correctly implement these requirements. This will mean tender officials have a good understanding on the BEE Codes, detecting fronting and correctly evaluating a companys' BEE status.
Treasury has already taken more than 5 years to gazette the revisions - to implement them in only 3 months time will require a major change in mindset.
- Tender officials, adjudicators, administrators, procurement managers will need a substantial amount of training. The change of policy must be well publicised in all departments and the tender official must know and understand how this impacts existing tenders/future tenders. This training must be implemented before 7th December 2011 which is the target start date for the revisions to become live. We know the Treasury has planned some sessions but tend to feel they are not well positioned at the moment to present all of this training. They need to appoint multiple experts in all provinces who are able to quickly mobilise and train the required people.
Treasury should spend time creating a standard tender template for BEE purposes. In this way one expert can make changes that will affect all departments. The managers in each department can then insist on the correct tender template being used.
- You have a responsibility to ensure the PPPFA is applied just as much as government does. We should all ultimately learn from each other.
- Where a government department who should be following the new regulations does not, companies affected will need to confront the relevant government department to ensure the correct procedures are followed. Treasury may also need to get involved in disputes during the tender process.
- Fronting - Policing of fronting comes in many forms. The most likely is competitors because any tender awarded unfairly costs money. Tenders account for a massive percentage of the total spend which will result in billions of rands. Avoiding conflicts with the tender process will become essential. Treasury will need to become an adjudicator where conflicts exists and define quick and precise remedies to ensure the tender process runs smoothly.
- Urgency – with less than 100 BEE verification agencies the additional companies wanting to be BEE accredited will place huge stress on their capacity.
- In the past the driving force behind compliance was the private sector. Now tenders will require a BEE status or more particularly a good BEE status. Forward thinking companies are already trying to earn more points. This will place huge demand on the BEE verification industry to issue BEE certificates within the next 3 to 4 months.
It is noteworthy to mention verification is the final audit of the scorecard. It takes time to earn more points and ultimately prepare for your verification. Follow our 10 step methodology to help you earn more points more effectively.
- Regulation issues – Invalid certificates need to be blacklisted properly. It is very difficult checking a database of invalid certificates every time a tender is issued. Once a certificate is found to be incorrect it needs to be removed from the tender process. An investigation will need to be conducted to discover the reason why the scorecard is incorrect. Tender officers will need training to ensure they vet each certificate.
A partnership between DTI/ Treasury and the tendering department must be effective to ensure swift action is taken. It may become more effective to have one controlling department with authority rather than multiple departments with smaller amounts of authority.
In order to make BEE compliance successful we need to motivate companies to comply, make it easy to comply and offer genuine rewards after complying with the BEE codes. Naturally the more difficult and frustrating compliance becomes the less companies will comply. The revison in the PPPFA legislation will go a long way to ensuing this goal is achieved.
Even though EconoBEE is a consultancy helping smooth out the BEE process for clients we also want to see more compliance with the aim of promoting further skills, more compliance and certainly less admin for companies.
PPPFA and your Tender Treasury has revised procurement regulations to bring them into alignment with B-BBEE. How does this affect your tender - more info...
|Government and BEE Tenders
Treasury has revised procurement regulations to bring them into alignment with B-BBEE. This will finally use a Broad Based BEE scorecard to award points on a government tender.
How does this affect your tender - more info...
EconoBEE is proud to announce that bookings are now open for PPPFA and Tenders in September 2011.
National Treasury regulations regarding evaluation of tenders will be changed as from the 7th December 2011. Evaluation of tenders must be done using B-BBEE. 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. Tender officials and procurement officers will need to change their tenders to ensure compliance with the new legislation.
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While there is demand for a B-BBEE Scorecard someone will be taking advantage, shouldn’t that someone be you...
05 September 2011
In this issue
- PPPFA - Moving forwards
- Government and BEE Tenders
EconoBEE is an expert BEE consultancy. EconoBEE helps businesses Become BEE Compliant, prepare for verification, earn maximum BEE Points and ensure that they achieve the BEE Level they need to get more business.
Our services include BEE Management Systems, Training, EME Pack, Complete Managed Services; consulting and advisory and Procurement Solutions.
As leaders in the industry we are driven to help maintain and develop knowledge in the BEE industry.
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