New rating criteria for black vendors in South Africa

14 June 2011

14 June 2011 | Lindsay Clark

The South African government has changed the rules governing how buyers assess black suppliers in order to meet contracting requirements.

Purchasers will now have to consider more than whether or not the supplier has black ownership. Instead vendors will be measured across a range of criteria, including their own employment and procurement policies. The ranking on the ensuing scorecard will be taken into account when vendors bid on government deals. The switch brings public purchasing into line with the government’s overall policy of broad-based black economic empowerment (BBBEE).

The application of the rules has also been extended to buyers working at state-owned enterprises, including energy supplier Eskom, telecoms provider Telkom and transport operator Transnet.

Critics of the current rating system had argued that basing public procurement decisions solely on black ownership caused “fronting”, a scam where a supplier may employ a black figurehead to appeal to purchasing decision makers.

The new Preferential Procurement Regulations come into force from 7 December 2011 to allow enterprises to be rated on a BBBEE scorecard.

“This will also allow time to train all supply chain practitioners on the implementation of the revised regulations,” the National Treasury said in a statement.

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