PPPFA vs BEE Codes.pngCabinet announced in March that it will approve the alignment of the Preferential Procurement Policy Framework Act (PPPFA) and the Broad-Based Black Economic empowerment Act (BEE Act).

Public entities follow the regulations of PPPFA to procure goods and services.

Alignment of these two Acts will ensure that government departments and municipalities include BEE when awarding points for procurement of goods and services.

With the alignment of the two Acts it will become compulsory for all trading entities to be verified and be in possession of valid BEE certificate. This will increase the level of compliance to the BEE codes by the private sector and ensure that when the second phase of higher BEE targets begins in 2012, government can report and evaluate compliance to the first five years of the implementation of BEE.

Before this decision, public entities only considered BEE when issuing licenses and entering into partnerships, but not when procuring goods and services from the private sector. Government has been criticised for not taking the lead and leaving the private sector and state-owned entities to promote BEE.

The alignment of these two Acts will do away with the old narrow-based 90/10 and 80/20 calculation of procurement scoring system by public entities. This scoring system allocated 10/20 points depending on the size of the tender to black ownership of the company, whereas the incorporation of BEE into the scoring system will ensure that procurement points take into account all seven elements of BEE such as ownership by black people, black directors, employment of black staff, training of black employees, procurement of goods from black suppliers, the support to small black companies and the upliftment of black communities.