Quadrem.JPGThe new Preferential Procurement Policy Framework Act (PPPFA) regulations are set to go into effect on 7 December 2011. This is great news that will positively impact the lives of many in South Africa as well as the country’s overall economic outlook, Catherine Hills, Partner: Global Accounts at Ariba, tells SmartProcurement.

The regulations state that all suppliers and service providers that contract with the government must have a broad-based black economic empowerment (B-BBEE) score. Those scores will determine the level of preferential treatment with respect to procurement decisions going forward. Under the regulations, the B-BBEE scores are based not only on ownership, management control, and equity, but also skills development, preferential procurement, enterprise development, and socio-economic development.

This new law provides structure and supplier support for informal tenders below R1-million. Those putting out to tender a product or service are required to obtain a minimum of three quotations prior to making a decision, significantly increasing the amount of fairness and transparency.

Ariba solutions help to formalise this informal tender process by widely disseminating the available opportunities and managing supplier profiles, to include the new BEE requirements and supplier declarations invited to participate. Having access to one centralised database of verified, maintained suppliers and service providers and a central repository of accessible supporting documentation allows the public sector to successfully engage in commerce activities that support the new PPPFA regulations. And with the new regulations set forth, everyone who seeks an opportunity to conduct business with the government may have that opportunity.

South Africa’s B-BBEE policy strives to target its weakest economic point – the inequality of black people – and turn it into a positive strategy focused on growth and enterprise development. The new regulations are a significant step in the right direction for South Africa, as emerging businesses will now be empowered and have the opportunity to conduct business on a wider scale and to achieve success. This new law allows the country’s economic base to be expanded and provides benefits such as additional employment and enhanced economic growth. And that’s a beautiful thing.

For more information contact Graeme Yates on gyates@quadrem.com

Quadrem was acquired in 2011 by Ariba, Inc and is now fully integrated and operating as Ariba.