Procurement rules elevate BBBEE status for state business
Claire Tucker explains three important elements of the amended regulations relating to the preferential treatment of black-owned businesses by the government
The South African Preferential Procurement Regulations are the legal basis for the application of broad-based black economic empowerment (BBBEE) and black ownership preferment by the government when they do business. The regulations were amended last week and the changes will take effect in April 2017. The three important elements of the amended regulations relating to the preferential treatment of black-owned businesses by the government are: The retention of the 90/10 and 80/20 principle; The introduction for the first time of BBBEE status level as an acceptable prequalification criterion; and The exclusion of 51% black ownership of large businesses as an acceptable prequalification criterion. The regulations and the Preferential Procurement Policy Framework Act were enacted to create a framework for how the government may "prefer" historically disadvantaged companies when buying goods and services. They were, however, primarily imposed by the Treasury to limit the application of ...