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Cape Town - The Treasury on Thursday released new
preferential procurement regulations meant to promote black economic
empowerment and ensure the state sources a maximum of supplies and services
from local companies.
The reform extends preferential procurement rules to major
public entities like Eskom, Transnet, the Development Bank of South Africa, the
CCMA and all their subsidiaries.
The new regulations will also apply to all national and
provincial government business enterprises, ranging from Khula Enterprises to
regional water boards and development zones.
These entities were previously excluded from the guidelines,
which Treasury said would take effect on December 7, to give companies
"time to become BEE rated" and officials time to learn to apply the
new schedule.
The regulations introduce a scoring scale according to the
bidder's BEE status level. Once they come into effect all bidders for state
tenders will be required to submit BEE rating certificates.
Finance Minister Pravin Gordhan said earlier the measures
were in line with the Industrial Policy Action plan, by taking account of local
content when awarding tenders and encouraging the development of small
enterprises.
The threshold for the less onerous scoring system for
tenders has been raised from R500 000 to a million rand.
In designated sectors, state sectors can stipulate when
inviting tenders that only bids with a certain threshold of local content will
be considered.
Treasury has also taken aim at the practice of
"fronting" fraud.
Section 11 of the regulations state that the tenderer may
not be awarded points for his BEE status level if he states that he intends to
sub-contract more than 25% of the value of the contract to another enterprise
that does not have the same status level.
Successful bidders will also not be allowed to sub-contract
in such a manner that the local content of the contract drops below a minimum
threshold.
The regulations compel any state body that discovers that
the BEE status level has been "claimed or obtained on a fraudulent
basis" to act against the tenderer.