Tenderpreneurs Phased Out
By Keith Levenstein, CEO of EconoBEE – a B-BBEE advisory firm
Tenderpreneurs are businesses whose sole mandate is to tender for business based on their BEE compliance status. The tenderpreneur then outsource that business to another business, usually a more competent business who has the required infrastructure to fulfill the tender requirements.
The unfortunate consequences of the past tender system forced government procurers to use businesses that complied with a flawed procurement system.
Treasury updated the act responsible for awarding tenders known as the PPPFA. Within the new updated tender legislation, the concept of tenderpreneurs winning tenders has now been completely phased out.
New regulations have fully come into effect that limit how government awards its tenders. The regulations apply not only to government departments but even state-owned enterprises such as ESKOM, Transnet, Telkom and ACSA.
The regulations stipulate that tenders must be adjudicated following a fair and objective measure which is clearly specified.
Tenderpreneurs, or companies using a front company, will not be allowed to win tenders. Successful tenderers will have to prove their own capability, capacity and the functionality of their products or services.
Empowerment still plays a major part, but it is now following the true broad-based empowerment model, which does not only rely on narrow-based ownership. All businesses with a good B-BBEE score will stand a better chance of winning business from government and state-owned enterprises. ??
A problem with the old tenderpreneur concept was that a shelf company would bid, and because it had the right credentials, it would win the tender. The tender would then be sub-contracted, at a price, to another business with the capability to deliver on the tender requirements but did not have the necessary BEE credentials.
The revised regulations state that the tenderer must prove their competence and declare who they may be sub-contracting to. A good B-BBEE score will be an advantage. Most importantly, the sub-contractor must now show that they have the same or better B-BBEE status as the principal tenderer.
BEE is a complex business task which consumes a considerable amount of time and resources. It needs a strategy planned with commercial logic, which is then properly implemented and monitored in a way that makes complete business sense.
Choosing the appropriate competitive B-BBEE strategy is a sophisticated endeavor requiring knowledge and familiarity with the minute intricacies of the B-BBEE Act and Codes of Good practice. The lack of expertise in many companies countrywide hampers the successful implementation of the B-BBEE Codes in their operations.
EconoBEE’s managed services offer a high quality streamlined step-by-step approach to becoming BEE compliant.
Issued by: Sha-Izwe/CharlesSmithAssoc
ON BEHALF OF: Econo BEE
FURTHER INFORMATION: Charles Smith
Tel: (011) 781-6190
AT: Econo BEE: Keith Levenstein Tel: (011) 483-1190
Fax: (011) 483-1195
Email : firstname.lastname@example.org