Dear Supplier “We Need your BEE Scorecard” – EconoBEE Newsletter – 23 November 2010

EconoBEE - BEE Points = Business

In business we must adjust to current affairs and business trends. Producing a BEE scorecard is an inevitable task that will need to be done by any business that deals directly or indirectly with government, corporates or business to business. In the past it was acceptable to reply with a letter stating that you are in the process of getting a scorecard. This has changed. Customers are now demanding good scores.

Contact us and we will show you how to become BEE compliant.

Attn: Procurement Managers

Why collect your own BEE Scorecards when EconoBEE can do it for you. EconoBEE has developed a highly effective method of collecting BEE scorecards. It is going to save you hours of effort. More info online or contact us for a Procurement Managed Service.


Dear Supplier “We Need your BEE Scorecard”!

The cascading effect of BEE begins with Preferential Procurement. In order to get a good score, ABC company asks their supplier XYZ for a scorecard. XYZ asks DEF who asks GHI, etc. As this cycle continues, it creates a huge economic demand for scorecards and the risk of losing business for those who do not have a scorecard increases exponentially.

In the past a simple response stating that you were in the process was sufficient, since many businesses had not yet produced a scorecard. 2010 was the year where all this changed and 2011 will see companies push their suppliers harder, request more points and change suppliers if they feel that their score is too low.

We have prepared an example supplier questionnaire below – if you would like this as a document please email info@econobee.co.za.

Dear Valued Supplier

We have embarked on a project to implement B-BBEE as defined by the Broad Based Black Economic Empowerment Act of 2003. The codes were gazetted on 9th February 2007 and encompass seven elements: Equity, Management, Employment Equity, Skills Development, Preferential Procurement, Enterprise Development and Socio Economic Development.

Your BEE status documents will help us in earning BEE points on the Preferential Procurement element. Therefore would you please furnish us with your B-BBEE status documents/certificate. If you do not have any B-BBEE status documents/certificate, then we can recommend EconoBEE who are assisting us. They can be contacted on 011 483 1190 or info@econobee.co.za

In order for us to achieve maximum points we require at least level 7 or more than 40 points from each of our suppliers.

We value the relationship that we have developed up until now. We would like to see this relationship growing in the future by both companies benefiting from an increasing B-BBEE score.

We look forward to a positive response from you.

Please provide us your B-BBEE status documents/certificate by email on info@econobee.co.za or fax on 011 483 1195 or call on 011 483 1190 for assistance.

Thank you for your assistance

Regards
The EconoBEE Team

Background?

The Department of Trade and Industry set up “Codes of Good Practice” to objectively measure an enterprise’s BEE compliance in the form of a scorecard. The codes were gazetted on 9th February 2007 and encompass seven elements: Equity, Management, Employment Equity, Skills Development, Preferential Procurement, Enterprise Development and Socio Economic Development.

In order to calculate a BEE scorecard companies need to work on preferential procurement. Preferential procurement requires companies to obtain B-BBEE certificates from their suppliers. Valid B-BBEE certificates are those issued by Accredited Verification Agencies or Verification Agencies that are in possession of a valid pre-assessment letter from SANAS. For Exempt Micro Enterprises (EMEs), a valid verification certificate or auditors or accounting officer’s letter is valid.

The codes define various levels, from 1 to 8 of BEE compliance. Each level has corresponding preferential procurement recognition level. The higher your BEE score, the better your level.

The table below shows how points convert to BEE levels

B-BBEE StatusQualificationB-BBEE recognition level
Level One Contributor= 100 points135%
Level Two Contributor= 85 points but < 100 points125%
Level Three Contributor= 75 points but < 85 points110%
Level Four Contributor= 65 points but < 75 points100%
Level Five Contributor= 55 points but < 65 points80%
Level Six Contributor= 45 points but < 55 points60%
Level Seven Contributor= 40 points but < 45 points50%
Level Eight Contributor
= 30 points but < 40 points10%
Non-Compliant Contributor< 30 points0%

How to Submit the Correct Information?

A BEE Scorecard must meet certain minimum standards for both credibility purposes and earning points purposes. Please ensure the following information is included on the B-BBEE Status documents /certificate you submit to your customer.

  • Company name
  • Company registration number / VAT number
  • Address
  • Company type
  • Points earned on each element and Total points
  • B-BBEE level
  • Procurement recognition level
  • Black ownership % and Black women ownership %
  • Value adding enterprise or not
  • Date of Issue / Date of expiry
  • Authorised signatory

If you have a BEE Scorecard please submit it to info@econobee.co.za. Alternatively if you do not yet have a BEE scorecard our team of consultants can help you. Our service includes all tools, training, documentation and consulting services to ultimately offer you a complete managed service.


    How to get a BEE Scorecard and Respond to Customers

    Whenever we start with any consulting process we need to determine;

    1. Where the company currently stands
    2. What they want to achieve
    3. What can be done to reach the objectives
    4. Assist them reach the objectives efficiently and effectively
    5. The final rating

    How to find out where you currently stand. Ideally this must be a very quick guestimate exercise where the goal is to understand where the BEE codes will affect your business and what activities you have done thus far which will earn you points. One very important note is that any points you earn during this phase do not cost you anything. Good examples of outcomes from these sessions include charitable contributions, skills training or purchasing from suppliers who you know have a good BEE scorecard.

    The next phase is determined by a combination of people and organisations. You need to achieve the level set out by your customer, equal or better your competitors level and reach a level that will give you a clear advantage and earn you more business. It is no use aiming for a compliant score when your closest competitor has a much better score. Even if you have a long standing good relationship, procurement managers consider your good score to be good service. More often then we like to acknowledge they will switch suppliers to one with a better score if it benefits them.

    The strategy session is any executive managers favourite session. During these sessions it is important to consider the cost per point, the availability of the points and the level of input required to ensure success. Enterprise Development if done incorrectly will cost you exactly what you spend. If done correctly, it will benefit your business and your beneficiary. Skills Development tends not to be a direct cost because it happens everyday and is often in-house. However there is a major time consideration in keeping track of the spend.

    Find the points and earn them. Implementation is certainly the most difficult task. A small mistake can quite literally disqualify you from earning any points which can be very frustrating. However a well implemented program can save massive amounts of time. These projects can even be publicised on websites, submitted to the press and even gain more business.

    The last phase and in some respects the phase with the most red tape is the verification. Although a valid scorecard can only be issued by an Accredited Verification Agency it only makes sense to use one when you have reached your objectives. It is a pointless exercise to go through the verification process and earn few points. It will add unnecessary expenses and gain nothing.

    However once you have achieved your objectives the verification agency will “audit” your data. Note: They are not allowed to offer any advice or guidance on how to earn additional points.

    Exempt Micro Enterprises (EMEs), a valid verification certificate or auditors or accounting officer’s letter is valid more info…


    BEE Procurement & Enterprise Development Conference – Durban

    Johannesburg is over, Cape Town is over which leaves Durban for the final presentation of BEE Procurement & Enterprise Development. Join us in Durban on 25th November 2010.

    Bookings are still open.

     


    How to be “verification Ready” and earn more points?
    Not sure how to get a BEE Scorecard, click here to see a demonstration of how best to produce your own BEE scorecard.


    While there is demand for a B-BBEE Scorecard someone will be taking advantage, shouldn’t that someone be you…


    Want us to manage your BEE Process – simple 10 steps to BEE Compliance.

    Use our pre-prepared “Verification Ready” documents and templates in your business – contact us for more.


    Turnover below R5 million – find out how to get your BEE Exemption.

    Is BEE procurement a pain? Sort it out quick and easy – click here.

    EconoBEE Newsletter
    23 November 2010

    In this issue

    • Dear Supplier “We Need your BEE Scorecard”!
    • How to get a BEE Scorecard and Respond to Customers
    • BEE Procurement & Enterprise Development Conference – Durban

    In other news

    About EconoBEE

    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, Completely 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.


    Already have a BEE Certificate?

    Please send it to us and we will include it in our BEE Procured database.


    Contact Us

    Tel: 011 483 1190
    Fax: 011 483 1195
    Email: info@econobee.co.za
    Web: www.econobee.co.za


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    Remember
    BEE Points = Happy Customers = Sustainable Business


    That’s it for the time being.
    Regards
    Gavin and the EconoBEE Team

    Executive summary of B-BBEE

    Turnover below R5 million per annum – automatic BEE status

    Turnover above R5 million per annum – you need a BEE Scorecard. Our workshops, scorecard tools, procurement manager or a complete managed services will be best for you.

    Complete Managed BEE Service

    Tip:

    B-BBEE is a long term process, not a single event that happens once a year – EconoBEE’s Managed service will help you.

    10 Strategic Steps to B-BBEE!

    We have prepared an easy to follow guide “B-BBEE in 5 Minutes” and “Crash Course to BEE Verification” which explains BEE in a simple step by step approach.

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