Companies are sending out letters asking suppliers for their BEE status. Most of these letters have been poorly written and very little thought has gone into them. I have often come across a supplier questionnaire that either asks for shareholding and nothing else (Narrow Based BEE) or they have copied an industry charter or in some extreme cases they have gone and used an old set of codes. The old set of codes were published in 2004. In almost all cases they ask for a ridiculous amount of documentation (Shareholders Certificates to a complete list of every one of the companies customers and suppliers) to help them prove a scorecard that is incorrect in the first place. Then they ask for the accredited certificate by an accredited rating agency.
There are no accredited rating agencies around which makes it impossible to get the rating. (Now the reason I decided to make this post) I did some work for a client a couple of weeks ago. I produced all the required documents and they were very happy. They then had a big tender with a corporate where they were asked to fill out a supplier assessment form. They asked if I would help them. I was emailed the form. The positive thing about the form was they were asking some of the right questions. They went through all seven elements. They used most of the generic scorecard to come to an acceptable scorecard questionnaire. The downside was our client’s company is small and needs to follow the QSE scorecard. We still filled in the form as best we could and then sent our own set of documents through when we submitted the questionnaire. They came back asking for more documentation. (They had looked at the documents we had submitted but were asking for documents relating to the wrong scorecard).
We then started collecting this documentation – one aspect was Preferential Procurement. We tried asking all suppliers for their scorecard and we got a few responses. One of the responses was from a company who spent money with a smaller rating agency who gave them all the wrong information. The “rating agency” called it a generic scorecard, but they had used the QSE scorecard in some places. This unfortunate company has wasted their money with this rating agency (they are on the list of to be accredited companies – SO BE VERY CAREFUL when choosing a rating agency).
Once we had gone through a long list of requirements we compiled it into a document and went to the company.
The procurement manager had done her research into Broad Based Black Economic Empowerment. She started off by thanking us for going through such effort to get the data that was required. She also said that so few companies even bother to return their questionnaires. We presented the new documentation and she had a quick look at it and told us that her company likes dealing with black owned companies. (She was saying her company likes to be Narrow Based). We started our planned answer “we are a BBBEE company that follows the BBBEE act and codes of good practice…” until she said that her systems could not accommodate a broad-based scorecard – but because we had produced accurate data she would take our score into account.
Our client did win the tender and as a result of going through some additional admin they will increase their profits by nearly 50%.