| Who is affected by the bee codes
of good practice - the bee law |
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Who is
affected by the launch of the Codes of Good BEE
Practice; and how? |
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- Every business or enterprise, except an micro-enterprise
(a business with the annual turnover of less
than R5 million), called an exempt or exempted
micro-enterprise in the Codes.
- Micro-enterprises do not have to report
on their BEE credentials; and everyone buying
from them will account for them as Level
4 Contributors to BEE. See Recognition
of BEE Status
- All other businesses have to produce an annual
report on their BEE credentials, preferably one
verified by an independent verification agency.
- If the annual turnover of your business is
greater than R5 million but less than R35 million,
you are what is called a qualifying small
enterprise (QSE) and will be required to
report on your BEE credentials on the basis of
a special scorecard (a QSE scorecard). See
scorecard.
- The structure, interpretation and targets in
the QSE scorecard are more flexible
than in the generic scorecard. See scorecard.
- Failure
to produce a BEE scorecard is not illegal, but
will affect your ability to keep some of your
clients as they will need your BEE scorecard
to make their BEE scorecard look good. See
Code 000: Recognition of BEE Status
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Code 000: Recognition of BEE Status
When compiling your company’s BEE
scorecard, you will realise that there is something (an
element or pillar) called preferential procurement with
a 20% weighting, i.e. out of a total of 100 points, 20
will depend on how well you have procured from good contributors
to BEE. Therefore, by buying services from good contributors
to BEE, your own BEE score, especially preferential
procurement, will improve. The only way to score all
20 points is to attain the target set for preferential
procurement, i.e. spend the prescribed percentage
of your total procurement expenditure from good contributors
to BEE – companies or suppliers with a good BEE score.
This target percentage (preferential
procurement) is 70% according to the generic scorecard – could
be higher depending on the industry scorecard you use
to report. What this means is that for every Rand you
spend procuring goods and services, 70 cents must be
from good contributors to BEE.
There is a formula used in determining
your preferential procurement score:
- for every Rand you spend procuring goods and
services, there is a factor (a number or more precisely
a fraction with which you multiply the Rand value
of your procurement expenditure) for each one of
your suppliers.
The factor depends on the BEE status of
your supplier or its Level of Contribution – which
depends on its total BEE score.
The factors
are summarised as follows: ::click here::
As you can see from this table, the better
the BEE score of your supplier, the higher the factor with
which you multiply the Rand value of your procurement expenditure
from them, the higher your preferential procurement expenditure
(procurement from BEE suppliers), and the better your preferential
procurement score and your total BEE score. A better BEE
score will make you an attractive supplier to your own
clients, as you will make their BEE scorecard look better.
See, it will be like a food-web of BEE – where
everybody is trying to impress everybody with their good
BEE credentials; with everybody’s BEE credentials
depending on the BEE credentials of everybody else.
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