How to Interpret a BEE Scorecard – EconoBEE Newsletter July 2008

How does one interpret a BEE scorecard?

Over the past weeks we have come across hundreds of BEE scorecards, certificates and letters.

Some originate from the companies themselves, some from consultants and some from verification agencies.

Unfortunately there is no consistency in these documents. Each company uses their own “look and feel”, which is perfectly acceptable, but the information contained in each certificate or scorecard differs widely.

Some scorecards use the as-yet ungazetted financial services charter, for which the financial services companies have approval from the dti until the end of August 08 to use.

Others use the infamous A,AAA,B,BB rating methodology.

Many companies have supplied us with letters confirming that they are in the process of obtaining a rating.

Why ask for a scorecard?

The purpose of obtaining a scorecard from your supplier is to assist you in calculating points for Preferential Procurement. Up to 20 points are available (25 for QSE’s) for this element. You only need a scorecard from suppliers, not customers!

To do your calculation to earn and maximise points you need to know the following information about your supplier.

  1. Annual spend with that supplier

  2. The size of the company (EME/QSE/Generic)

  3. Their BEE level (1-8 or non-compliant)

    • Broken down into the Elements where they earned the points

  4. If they are a value adding supplier

  5. The percentage of black ownership in the business

  6. The percentage of black female ownership in the business

  7. If they are, or potentially could be, your enterprise development project

  8. The rating period/expiry date of the rating

  9. Do they have suitable proof for every item on the scorecard

  10. Has the scorecard been signed by an authorised individual

In addition, many companies trade under different trade names, or are part of a group. It does become quite difficult to know exactly which scorecard applies to your own supplier.

We suggest you capture your suppliers and their scores by references both to their company registration number and VAT number. All invoices from your supplier must carry a registration number and VAT number if they are VAT registered. (If they are not VAT registered, they are probably EME’s and therefore level 4 or level 3).

All the other information on the documents/certificates you may receive is irrelevant!

Managing the preferential procurement element is certainly an admin task, but it need not be too difficult if you follow our tips and simple rules. There is no direct cost, other than searching for appropriate suppliers and getting the right information from existing suppliers. It is either 20% or 25% of your whole scorecard so cannot be ignored.

More about BEE Procurement

BEE Verification Guidelines

These last few weeks have had a number of comments about the DTI’s verification guidelines document being released publicly in a gazette in the early part of July (already past). Other commentary has also stated that it will be released on or around 31 August 2008 along with the first SANAS BEE Verification Agencies. It is hoped that the verification guidelines will clear up some of the confusion and help companies implement Broad Based Black Economic Empowerment properly. The purpose of the guidelines will be to ensure all BEE Scorecards use the same calculation methodologies.

BEE Procurement and Enterprise Development

With just over a month to go, we have already had a wonderful response to our BEE Procurement and Enterprise Development Conference.

Clever businesses recognise that Preferential Procurement and Enterprise Development are “easy” ways to improve your BEE scorecard. Together they account for 35 points on the scorecard. Join us to make sure you find the easy, practical ways to do Preferential Procurement and Enterprise Development.

Date: 2nd September 2008 – JHB; 4th September 2008 – DBN; 9th September 2008 – CPT
Price: R2850 excl VAT

More details…

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