Friday, 12 July 2019

New Procurement Bill and B-BBEE Regulations coming into effect

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The Minister of Finance, Mr Tito Mboweni, announced during his Budget Speech in parliament, that government will promulgate the new Procurement Bill in the near future, and it will coincide with the implementation of the Amended B-BBEE Codes regulating Joint Ventures in tendering. 

The Minister said, “During this financial year, the National Treasury will table a new Procurement Bill, as a single overarching legislation for public procurement in the country.” 

“We will introduce a procurement data transparency portal, where all procurement data will be easily accessible for the monitoring of government projects.” 

According to Gerrit Davids, Lead Advisor at tendering specialist agency, TaranisCo Advisory, “Government is committed to dump all the fragmented pieces of legislation governing tendering and integrate it into the proposed Procurement Bill, which will streamline all supply chain processes in the public sector.” 

“Also, access to the proposed procurement portal, will give effect to Section 217 of the Constitution, which stipulates that government’s procurement system, must at all times be “transparent”, allowing all affected parties, to access recordings of the processes followed, when awarding tenders.” 

Davids says, “Suppliers to government will be well advised to re-align their sub-contracting practices to continue receiving tenders from government, since the new Bill will place a greater emphasis on preferential procurement to designated groups, and compliance will be much stricter than before.” 

“The Bill will also allow for tender disputes to be settled outside of the courts and it will tighten the allowances afforded under the principle of deviations, where officials are given special permission to procure goods and services, without having to follow the prescripts of the Bill, e.g. in cases of emergency.” 

The recently gazetted changes to the B-BBEE Codes, which will become effective on 1 December 2019, will give a major boost to government’s preferential procurement policy, since it will demand more procurement from Black-owned suppliers of goods and services. 

The changes also state that where, “two companies enter into an Unincorporated Joint Venture their respective scores in terms of the relevant Code of Good Practice will be weighted according to their proportionate share in the joint venture and added together for a combined score out of 100.” 

Further, “The JV B-BBEE Certificate is valid for 12 Months and only applicable to a specific Project.” 

In essence, it means that for tendering purposes, bidders will be forced to conduct a preliminary assessment as to the B-BBEE contributor level status of their potential joint venture partners, in order for the new venture, not be weighted negatively, in a specific tender. 

Davids says, “Suppliers to government should ensure, that they are not caught off-guard when the more stringent levels of compliance are introduced under the new Procurement Bill and the imminent coming into being of the new B-BBEE Codes.” 

For more details on how these new developments contact: Gerrit Davids | Lead Advisor 

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