The Importance of B-BBEE in South African Bidding
Under the Preferential Procurement Policy Framework Act (PPPFA), tenders in South Africa are evaluated on either an 80/20 or a 90/10 point system. While 80 or 90 points are allocated for price, the remaining 20 or 10 points are awarded strictly based on your Broad-Based Black Economic Empowerment (B-BBEE) status level.
Understanding the 80/20 and 90/10 Systems
The point distribution depends on the total tender value:
- 80/20 Preference Point System: Applies to tenders with a Rand value equal to or above R30,000 and up to R50 million. A Level 1 contributor gets the full 20 points, Level 2 gets 18, and Level 3 gets 14.
- 90/10 Preference Point System: Applies to tenders with a Rand value above R50 million. A Level 1 contributor receives 10 points, Level 2 receives 9, and Level 3 receives 8.
How to Maximize Your B-BBEE Scorecard Points
Firms can optimize their preference points by focusing on key scorecard pillars:
- Management Control & Ownership: Ensure representation of designated groups at the board and executive management levels.
- Skills Development: Invest in accredited training programs, learnerships, and bursaries for black employees, which directly yields high scorecard returns.
- Enterprise & Supplier Development (ESD): Procure goods and services from B-BBEE compliant suppliers (especially QSEs and EMEs that are black-owned) and support emerging enterprises.
Conclusion
In highly competitive tenders, the difference between winning and losing often comes down to a single point. Aligning your business with robust B-BBEE strategies ensures you remain competitive on the preference points scorecard.