Small, black-owned as well as women-owned companies are set to benefit from the Treasury’s proposed new preferential procurement guidelines that stipulate the reservation of 30% of all large government-issued subcontracts subcontracts should be reserved for them.
According to the Treasury: “to provide for a mechanism that will assist in targeting certain categories of persons, including looking at how government can procure at least 30% from SMMEs (small, medium-sized and micro-enterprises), co-operatives, township and rural enterprises, and other targeted groups”.
Under current regulations, an 80-20 preference point system applies, with 80 points allocated for the lowest price and a maximum of 20 points for the level of broad-based black economic empowerment (BB-BEE).
This applies to tenders with a rand value equal to or above R30,000 to a maximum of R1m. Only a tender with the highest number of points scored may be selected.
The draft regulations propose that this threshold for applying the 80-20 system be increased to R100m to further stimulate small enterprises.
For larger tenders, a 90-10 preference point system has applied, with 90 points for price and a maximum of 10 points for BB-BEE status. The 90-10 applies to tenders above R1m, and the draft regulations propose this be extended to above R100m.
In addition, the new regulations propose that for contracts above R30m, it will be compulsory to subcontract a minimum of 30% of the value to emerging suppliers including small and black-, women-or youth-owned enterprises.
The proposed guidelines are governed by the Preferential Act of 2011.
One Response
This is a good initiative my concern is these platforms are created but the is never a proper follow up grooming and making sure that the relevant information and resourcing are at our disposal because I know for a fact that some of us are hard working if given an opportunity we would blossom to be well known n established businesses that will make our country proud .