PROCUREMENT YOUR DIFFICULT ELEMENT TO CONTROL

Procurement should be one of your easiest points on your B-BBEE scorecard, due to it being your own purchases criteria you can control. Procurement has become one of the most criteria specific elements on your B-BBEE scorecard and they are as follow:

Does your supplier have a valid B-BBEE certificate?

• Is this supplier and EME or QSE supplier or SMME as mentioned in the industry these days.

• Does your supplier have more than 51% black ownership?

• Do they have at least 30% black female ownership? (Depending on sector codes)

• Are your suppliers 51% black owned suppliers designated group?

There are criteria that must be met or can lead to your company losing out on easy B-BBEE procurement points, but internal procedures can also lead to loss in B-BBEE points due to these factors:

Lack of Internal Communications and Knowledge:

The purchasing procedure in each department does not communicate with each other and does not have the knowledge on which criteria to search for in each supplier when making a new purchase with a new supplier or even current suppliers.

Solution: Train all departments in sourcing only suppliers that can achieve the criteria set out above and maintaining internal policies

Cost Control:

Not all B-BBEE entities are well priced or doesn’t have the necessary niche service or product that you require from a supplier.

Solutions: Calculate what the actual percentage impact it would have on your overall procurement points and what would the outcome/effect be cost and B-BBEE level wise, if you would source a supplier that can increase your procurement scorecard and decrease total expenses.

Failure to streamline the process:

Your suppliers that you purchase from does not have a valid B-BBEE certificate or they have merged with a bigger entity, who has a lower B-BBEE level or even non-Compliant certificate.

Solution: Make sure your departments implement a procurement policy to ensure your supplier keep its B-BBEE compliance updated and if a new supplier is identified that they have the correct B-BBEE affidavit or a valid B-BBEE certificate that will ensure your procurement points increase.

Article By:

Francois Le Sueur: Executive Consultant - Compliance Hub