Revised BEE Codes Panic – EconoBEE Newsletter – 22 February 2013

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Dear [Name]

Revised BEE Codes Panic


The DTI has been talking about revised codes for some time. Finally in October 2012 they were released. Unfortunately the radical ideas and lack of communication left businesses reeling. Even now businesses are worried about the consequences of the new revised codes. Many of these worried businesses have virtually given up on compliance throwing their hands up in the air feeling completely unable to comply.

Yes, sadly the consequences are quite severe and could mean businesses who achieved a good level 3 might be non-compliant.

Fortunately over 500 businesses submitted comments. The DTI now needs to review all comments. This process will take many months if not the rest of the year – even though some reports have stated that this will be quicker. After all the comments have been collated a new draft will need to be issued. In fact a new draft needs to be issued anyway since no revised codes were provided for QSE’s. Practically it could take another year to two years for a new set of codes to be issued. The codes could then be gazetted shortly after the second draft. However it is very likely that a year long transition be applied to help companies ease into the new codes. The DTI is hosting a morning session to discuss the revised codes next week.

This process could therefore take quite a long time with an additional year as the transitional period for the revised codes to be issued and required to be used.
Although the revised codes are not law and will still take many years to come into effect it is important to note that the DTI, Government and industry value the B-BBEE Scorecard as a method to improve the inequalities in South Africa. The reality is that B-BBEE is here to stay. Without widespread implementation BEE will get harder and harder over the years.

We at EconoBEE will continue working hard for the benefit of our clients to ensure firstly they are able to comply and secondly that true transformation is kept close at heart.

Implementing the current codes must take precedence. At this point in time waiting for the revised codes is not advised, spend the time now to compile a good scorecard. Prepare well for the current scorecard rating which will give you extra time when the revised codes are finally implemented because each certificate issued is valid for a year from the date of issue. The preparation for the current scorecard will also give practical insight into how the revised codes will be implemented, allow you to calculate future costs of implementation and most importantly give yourself many additional months of planning time.

In the end it becomes simple – implement BEE, get a good score and your business will grow. The government tender act follows BEE principles when awarding tenders, corporates insist on using compliant suppliers to the extent that they have automated systems that remove vendors if they are noncompliant and private companies are electing to use compliant suppliers because they are losing business.

EconoBEE’s consulting service allows companies to adequately plan and implement B-BBEE. Our service objectives are to help our clients earn more points while spending less time and money on each element. Our advise is practical, pro-active and effective. Through a complete managed service we will also contact suppliers, advise on verification and even sit in during the verification to handle any major queries.

 

 

 

 

 

 

 

 

 


Tenderpreneurs Phased Out


Tenderpreneurs are businesses whose sole mandate is to tender for business based on their compliance status. They then outsource the business they win to another business who has the infrastructure. The unfortunate consequences of the past tender system forced government procurers to use a business that complied with a flawed procurement system.

Treasury recently updated the PPPFA which is the act responsible for awarding tenders. Within the new updated tender legislation the concept of tenderpreneurs winning tenders has now been completely phased out.

New regulations have now fully come into effect that limits how government awards its tenders. The regulations apply not only to government departments but even state owned enterprises like ESKOM, Transnet, Telkom, ACSA.

The regulations were issued in June 2011 and meant to come into effect in December 2011. However state owned enterprise were given an exemption until December 2012.  The regulations state 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 does still play 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, which did not have those credentials. The revised regulations state that the tenderer must prove his competence, and declare who he may be sub-contracting to.  A good B-BBEE score will be an advantage. The sub-contractor must prove they have the same or better B-BBEE status.

 

 

 

 

 

 

 

 

 


Financial yearend deadline


Many companies have a February yearend. This is coming up in less than a week. If you have not spent your Enterprise Development and Socio-economic Development money yet to earn 20 to 50 points and need a good score you have to do something today!

We always like recommending that you turn ED and SED into a project, to make business sense for you. There is no time for this now.

If you need the points, then you are going to have to make your donations or grants to organisations that can produce the right administration documents in time for year-end and you have to ensure that your spend shows in your financials before 28 February.

For ED, you need to spend 2% of your NPAT if you are a QSE or 3% if you are a generic (depending on your industry). A good small, black owned business to support is Mabuya Glass, producers of excellent glass whiteboards for your office or boardroom, or even kitchen. Contact Msizi on 072 263 0130 or visit www.mabuyaglass.co.za if you want to assist, and earn points.

For SED you need to spend 1% of your NPAT. We know of many organisations who can assist you to earn your points.

Through our managed service we will be able to suitably verify each contribution so that you earn the points you deserve.

Organisations will gratefully accept your contributions, but you have to get the right documentation for your verification. Without the right documents your verification agency will not award you points.

 

 

 

 

 

 

 

 

 


Let our consultants save you time on B-BBEE.

Preferential Procurement – Save Time by using the BEE Procured database containing over 30 000 BEE Certificates.
Procurement Managed Service: Our consultants can phone your suppliers for a BEE certificate – Managed Service.

 


 

 

 

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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 – Managed Service.

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

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

Need a scorecard – produce one yourself – EconoBEE V3.

EconoBEE Newsletter
22 February 2013

In this issue

  • Revised BEE Codes Panic
  • Tenderpreneurs Phased Out
  • Financial yearend deadline

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, 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.


Already have a BEE Certificate?

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Email: info@econobee.co.za
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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.

Your time on your business, our time on your BEE status

Tip:

Through our managed service avoid the BEE distraction and let our consultants implement Broad-Based Black Economic Empowerment for 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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