Black Economic Empowerment is alive and well in South Africa – legal experts weigh in on the recent changes to BEE laws.
On 4 November 2022 , minister of finance Enoch Godongwana promulgated the new Preferential Procurement Regulations, 2022, which will take effect on 16 January 2023.
The Minister of Finance was given 12 months to draft new regulations in terms of the Preferential Procurement Policy Framework Act after the Constitutional Court declared the 2017 Preferential Procurement Regulations to be unlawful. The South African market is familiar with the 80/20 or 90/10 scoring system, the 90/10 points allocation must be used for tenders worth over R50 million. These tenders should be judged according to 90% of the available points to the adjudication of price, such that the cheapest tenderer scores 90/90.
These ‘specific goals’ are defined as ‘contracting with persons of categories of persons historically disadvantaged by unfair discrimination on the basis of race, gender and disability including the implementation of programs of the Reconstruction and Development Programme’. This wording is copied from the PPPFA.
In other words, the “specific goals” should not be exclusion criteria or prequalification criteria. The introduction of an obligation that 30% of government tenders be subcontracted to disadvantaged groups was the original complaint in theIn fact, the B-BBEE Act and the B-BBEE Contribution Level or score of a tenderer under the applicable B-BBEE Codes will continue to be fundamental criteria in the implementation of ‘specific goals’ by organs of state.
These matters were not directly connected to preferential procurement and were generally considered to be beyond the ambit of PPPFA empowering framework; nevertheless, they have, to date, been regulated under these regulations.
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