THE SUB-ELEMENT OF PREFERENTIAL PROCUREMENT IS IMPORTANT, AS POINTS ARE AWARDED BASED ON PROCURING F

On most scorecards, it is noticeable that a large number, of points (25) are allocated to this sub-element.

Therefore, the person/s appointed to collect suppliers’ B-BBEE certificates and/or sworn affidavits must ensure that the information received is correct.

Below are some guidelines to assist your company when claiming points for this sub-element


B-BBEE certificates:

  • Recently issued B-BBEE certificates must reflect the SANAS logo (except EME/QSE Affidavits)

  • Independent and competent person reports, due diligence or ownership certificates are not B-BBEE certificates; B-BBEE points will not be awarded where a supplier provides an in-process letter or letter of intent; Suppliers stating that they are at a particular B-BBEE level by way of an e-mail or company website will not suffice. A copy of the certificate must be included in the verification pack to enable the measured entity to claim points for the specific supplier. The above also applies to subsidiaries in a group structure, where the subsidiary company details must appear as an annexure to the Holding Company’s B-BBEE certificate’s, failing which the subsidiary must present its own B-BBEE certificate; Once you receive a supplier’s B-BBEE certificate ensure that the certificate relates to the correct company by comparing the VAT number appearing on the certificate, with the VAT number on your supplier’s invoice. If the VAT numbers do not correspond you will not be able to use the certificate.

Sworn affidavits:


1. Transport

Companies that fall under the transport sector code are not allowed to make use of a sworn affidavit

EME (Exempted Micro Enterprise- companies having an annual turnover of less than R5 million) must either obtain a letter from their Auditors or a B-BBEE certificate issued by a verification agency.

The reason for this is that the newly amended Transport Sector Codes have not yet been finalized and gazetted. This means that the old transport codes are still in effect until such time that the amended transport codes take effect by being gazetted.


2. Construction

BEP (Built Environment Professionals) companies that have an annual turnover of less than R1 800 000. and Construction Contractors that have an annual turnover of less than R3 000 000.00 are allowed to make use of a sworn affidavit.

All other companies under this sector code must obtain a SANAS B-BBEE certificate irrespective of its percentage of black ownership.


3. Be mindful of the following, the sworn affidavit must be signed and commissioned on the same date;

As a golden rule the financial period referred to on the sworn affidavit must not be older than 18 months as at the date on which the sworn affidavit is commissioned.

The new, recently released sworn affidavit template, requires companies to reflect their VAT registration numbers thereon. This is to ensure that the sworn affidavit presented corresponds with the VAT number provided for on the tax invoice.

QSE (Qualifying Small Enterprise) companies generally having an annual turnover exceeding R10 million but less than R50 million with less than 51% Black Ownership, cannot complete a sworn affidavit, and they should apply for a SANAS certificate


Conclusion

A supplier providing an invalid B-BBEE certificate or invalid/incorrect sworn affidavit may negatively affect the points claimed for the sub-element Preferential Procurement as the verification agency may deem such an entity as a non-compliant supplier. Please also only use the affidavit template as supplied by the Dti and the correct sector code

Please feel free to contact me, should you require more clarity from the above


Article by Edrich Linde

Executive Consultant

OVER 30 YEARS EXPERIENCE

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