DON'T MAKE THESE PROCUREMENT MISTAKES IN B-BBEE

When calculating your company's BEE procurement, companies should consider their total annual expenses.  Procurement is from all companies that you procure from not only BEE Compliant companies.


When suppliers that are either more than 50% black-owned or 30% black female owned, recognition of BEE procurement spend would be based only on their black ownership.  A common error is calculating the procurement spend with these suppliers based on their BEE levels against the 50% black-owned or 30% black female owned targets.


Not all imports may be excluded in your procurement. Imports may only be excluded in the procurement calculation if:


They are imported Capital goods or components for value-added production in South Africa provided that:

  • There is no existing local production of such capital goods/components.

  • Importing such capital goods/components promotes further value-added production within South Africa.

Imported goods/services that:

  • Carry a brand different to the locally produced goods/services.

  • Have different technical specifications to the locally produced goods/services.

Companies may not exclude labor broker expenditure from their procurement spend.  As per the BEE Codes of Good Practice, outsourced labor expenditure is included in the procurement calculation.


Capital expenditure may not be omitted as part of procurement expenditure.  

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