BBBEE Codes of Good Practice and
Procurement Regulations
24 November 2011
Contents

Background

Alignment of Preferential Procurement Policy Framework Act and BBBEE Codes of
Good Practice

Frequently Asked Questions

Conclusions
Background
CONSTITUTION
“Equality includes the full and equal enjoyment of all rights and freedoms. To promote
the achievement of equality, legislative and other measures designed to protect or
advance persons or categories of persons disadvantaged by unfair discrimination maybe
taken”
Chapter 2 of the Bill of Rights, Section 9
Background
CONSTITUTION
Section 217 of Act 108 of 1996, as amended by subsection 3 of Act. 61 of 2001 provides that: 1. When an organ of state in the national, provincial or local sphere of government, or any
other institution identified in national legislation, contracts for goods or services, it must do
so in accordance with a system which is fair, equitable, transparent, competitive and costeffective.
2. Subsection (1) does not prevent the organs of state or institutions referred to in that
subsection from implementing a procurement policy providing for:
 Categories of preference in the allocation of contracts; and
 The protection or advancement of persons, or categories of persons, disadvantaged by
unfair discrimination.
3. National legislation must prescribe a framework within which the policy referred to in
subsection (2) may be implemented.
Background
PPPFA
Preferential Procurement Policy Framework Act No 5. of 2000/2:
An Organ of State must determine its preferential procurement policy and implement it within the following
framework:

80/20 and 90/10 preference point system must be followed, i.e.:

10 and 20 points - HDI
90 and 80 points - lowest price.
Background
B-BBEE ACT
Section 10 of the B-BBEE Act:
Every Organ of State and Public Entity must take into account and, as far as is reasonably
possible, apply any relevant code of good practice issued in terms of this Act in: Determining qualification criteria for the issuing of licenses, concessions or other
authorisations in terms of any law;
 Developing and implementing a preferential procurement policy;
 Determining qualification criteria for the sale of state-owned enterprises; and
 Developing criteria for entering into partnerships with the private sector.
Alignment of PPPFA Regulations and B-BBEE
ALIGNMENT
 Cabinet approved the alignment of Preferential Procurement Regulations and the B-BBEE
policy
 The Preferential Procurement Regulations of 2011 will come into effect on 7 December 2011.
 While the alignment of Preferential Procurement Regulations and the B-BBEE policy is a step
in the right direction, the ultimate objective is the total overhaul PPPF Act No. 5 of 2000
Alignment of PPPFA Regulations and B-BBEE
ALIGNMENT
B-BBEE
PPPFA Regulations
Beneficiary
Black people
Black people
Measures
BBBEE 7 elements
BBBEE 7 elements
Automatic BEE Compliance
(< 5 Million)
Exempted Micro Enterprises
Exempted Micro Enterprises
New PPPFA regulations use the B-BBEE scorecard to determine preference points
Alignment of PPPFA Regulations and B-BBEE
ALIGNMENT
 The preferential Procurement Regulations are applicable to organs of state as contemplated
in section 1(iii) of the PPPF Act and all public entities listed in Schedules 2,3A,3B, 3C and 3D
of the PFMA and Municipal entities
 The preferential Procurement Regulations will thus be extended to all organs of state for
uniformity purposes.
 The revised Regulations affirm the 80/20 preference point system for procurement of goods
and service for a rand value of R1million and 90/10 preference point system above R1million
 On 80/20 principle, 20 points scored by a bidder will be in respect of B-BBEE status level and
90/10 principle, 10 points will be in respect of B-BBEE status level.
B-BBEE Recognition Levels
SYMBOL
LEVEL
SCORE
RECOGNITION
AAA+
Level 1
>100%
135%
AAA
Level 2
≤ 85% - 100%
125%
AA
Level 3
≤ 75% - 85%
110%
A
Level 4
≤ 65% - 75%
100%
BBB
Level 5
≤ 55% - 65%
80%
BB
Level 6
≤ 45% - 55%
60%
B
Level 7
≤ 40% - 45%
50%
C
Level 8
≤ 30% - 40%
10%
D
Non-Compliant
< 30%
0%
Alignment of PPPFA Regulations and B-BBEE
CALCULATION OF POINTS FOR B-BBEE RATINGS
Alignment of PPPFA Regulations and B-BBEE
 In addition, the revised Regulations address the objectives of Industrial Policy Action Plan,
especially those aimed at promoting the procurement of domestically produced goods
and services.
 The Regulations empower the dti to designate specific industries of critical and/or
strategic importance where such tenders should prescribe that only locally manufactured
products will be considered or that only locally manufactured products with a prescribed
minimum threshold for local content will be considered.
Frequently asked questions
HOW DO I DETERMINE THE VALIDITY OF A BEE RATING CERTIFICATE?
With effect from 1 October 2011, only B-BBEE status level certificates issued by the
following are valid:
 Verification Agencies accredited by the South African National Accreditation System
(SANAS) (see Statement 005)
 Registered Auditors approved by the Independent Regulatory Board of Auditors
(IRBA) in accordance with the approval granted by the Department of Trade and
Industry (see Statement 005)
 Exempted Micro Enterprises- Statement 000, Section 4 of the B-BBEE Codes of Good
Practice still applies for determining eligibility of a Exempted Micro Enterprise.
Frequently asked questions
HOW DO I DETERMINE THE VALIDITY OF A BEE RATING CERTIFICATE?
As at the end of September 2011 there are 78 SANAS Accredited Verification Agencies
 Click on link for a list of all SANAS Accredited Verification Agencies
http://www.sanas.co.za/directory/bbee_default.php
 Click on link of BEE verification agencies that are in possession of valid pre-assessment
letter
http://www.thedti.gov.za/economic_empowerment/docs/verification/LOA_Preassess
ments.pdf
 There are No IRBA approved registered auditors yet!
Frequently asked questions
HOW DO I DETERMINE THE VALIDITY OF A BEE RATING CERTIFICATE?
Frequently asked questions
B-BBEE VERIFIED ENTITIES
Click on link for example BEE Certificate_l.pdf
Frequently asked questions
HOW DO I DETERMINE ELIGIBILITY OF AN EXEMPTED MICRO ENTERPRISES (EMES)?
 Any enterprise with an annual Total Revenue of R 5million or less qualifies as an Exempted
Micro-Enterprise.
 Exempted Micro-Enterprises are deemed to have B-BBEE Status of "Level Four
Contributor" having a B-BBEE procurement recognition of 100%.
 In an instance were the Exempted Micro Enterprise is more than 50% owned by black
people, the enterprise qualifies for a promotion to a B-BBEE Status of "Level Three
Contributor" having a B-BBEE procurement recognition of 110%
Frequently asked questions
HOW DO I DETERMINE ELIGIBILITY OF AN EXEMPTED MICRO ENTERPRISES (EMES)?
 Sufficient evidence of qualification as an EME is
o an auditor’s certificate (2011 EME Letter) or
o certificate issued by an accounting officer, or
o verification agency
 Cost reduction and stifling growth at EME level
 Biggest beneficiaries of B-BBEE through Enterprise Development and Preferential
Procurement
Frequently asked questions
JOINT VENTURE B-BBEE STATUS
 A trust, consortium or joint venture must submit a B-BBEE status level certificate in order to
qualify for points
 A trust, consortium or joint venture will qualify for points as an unincorporated entity
provided they submit their consolidated scorecard as prepared for each separate tender
Frequently asked questions
HOW TO DETERMINE THE B-BBEE STATUS OF TERTIARY INSTITUTIONS
 If a service is provided by only a tertiary institutions, such services must be
procured from the tertiary institutions identified by means of bidding process.
Tertiary institutions must submit their B-BBEE status in terms of the B-BBEE
Codes of Good Practice’ Specialized Scorecard.
Frequently asked questions
LOCAL CONTENT
 Paragraph 9(1) of the draft Regulations empowers the dti to designate specific industries
where tenders should prescribe that only locally manufactured products with a prescribe
minimum threshold for local production and content will be considered. This will come into
effect after the dti has designated in line with national development and industrial policies.
National Treasury will issue relevant instructions and guide
 Where there is no designated sector, a specific tendering condition may be prescribed
minimum threshold for local content will be considered in accordance with directives
issued by the National Treasury in consultation with the dti.
Conclusion
The broader economic developmental agenda must address inter alia:
 Ensuring that BBBEE contributes to the broader developmental objectives of
government.
 Create a conducive environment for access to economic opportunities
 Promotion of entrepreneurial initiatives among the majority of South Africans
 Alignment and consistency in policies, legislation and programmes of Government
List of Western Cape verification agencies and the sectors they are accredited to verify
BBBEE VERIFICATION AGENCY DETAIL RECORD
SECTORS ACCREDITED
NAME
BODY
NUMBER
PHYSICAL ADDRESS
TEL NO.
CONTACT PERSON
E-MAIL
AQRATE (PTY) LTD
BVA 021
2ND FLOOR, WJ LOUW BLDG
021 949 4612
CHRIS VAN WYK
chris@aQrate.co.za
BBBEE Codes of Good Practice
7 OLD PAARL RD, BELLVILLE
BBBEE RATING AGENCY
BVA 074
18A GANTS PLAZA
083 700 0049
MS M COETZEE
info@bbbee.com
BBBEE Codes of Good Practice
BEE EMPOWERED & LABOUR
CONSULTANCY
BVA 057
LANGENEGGER STR, STRAND
A 21, BLOCK 1 NORTHGATE ISLAND
SECTION ROAD PAARDEN EILAND
021 511 0802
MS L FRANK
lizette@bempowered.net
BBBEE Codes of Good Practice
BEE ONLINE (PTY) LTD
BVA 038
087 750 6505
GAVIN FLETCHER
gavin.fletcher@beeonline.co.za
BBBEE Codes of Good Practice
BEE VERIFICATION AGENCY
BVA 014
WILLEM MOSTERT
willem@bee-verification.com
BBBEE Codes of Good Practice
CODEX RATINGS (PTY) LTD
BVA 065
086 072 2222
021 975 3689
021 701 0470
JL POTGIETER
kobus@codexratings.co.za
BBBEE Codes of Good Practice
021 419 5130
DUNCAN DE GROOT
duncan@empowerdex.com
BBBEE Codes of Good Practice
7 DIRK SMIT CRES
MEYERSDAL
8 PARK STR
DURBANVILLE
C 3A WESTLAKE SQ
1 WESTLAKE DRIVE, TOKAI
EMPOWERDEX CTN (PTY) LTD
BVA 141
14TH FLOOR METROPOLITAN LIFE CENTRE
7 COEN STEYTLER AVE, FORESHORE, CT
MINDWALK CONSULTING (PTY) LTD
BVA 090
UNIT 5, ROTHERFIELD RD
PLUMSTEAD
021 797 2444
NP HARTMAN
anthony@mindwalk.co.za
BBBEE Codes of Good Practice
SERA WC (PTY) LTD
BVA 121
UNIT 101 A, EDWARD STR
TYGER VALLEY
021 910 1110
MS SJ NEETHLING
shirley@serabv.com
BBBEE Codes of Good Practice
UKUTHENGA VERIFICATION SOLUTIONS
BVA 116
44 HOPKINS STR
PAROW
021 911 2906
JODY JANSEN
jody@ukuthenga.co.za
BBBEE Codes of Good Practice
IQUAD VERIFICATION SERVICES (PTY)LTD BVA 131
BELLVILLE
021 300 0013 ext 2
SAM ADAMS
sam@iquad.co.za
BBBEE Codes of Good Practice
MOSELA RATING AGENCY
BVA 080
20 WATERKANT STREET
CAPE TOWN
021 418 4807
DANIELLE MINTOOR
daniellem@moselaratings.co.za
BBBEE Codes of Good Practice
KBONGA BEE VERIFICATION
BVA 022
7 Coen Steytler Ave
021 421 4940
Ms AN SIBISI
nazo@kbee.co.za
BBBEE Codes of Good Practice
AGENCY
CAPE TOWN
Enquiries
☎ 0861 888 126
☒ redtape@pgwc.gov.za
www.westerncape.gov.za