DA proposes replacing B-BBEE with new procurement bill focused on value and inclusion

Under the Democratic Alliance's (DA) proposed economic policy, companies that do business with the State would no longer be required to have any percentage of black ownership or sub-contract to Black-owned companies.

Black Equity and Enterprise and Supplier Development are two crucial elements that companies need to adhere to on the Broad-Based Black Economic Empowerment (B-BBEE) scorecard in order to qualify for government contracts.

On Monday, the DA held a media briefing where it proposed the Public Procurement Amendment Bill, which seeks to replace B-BBEE.

The existing B-BBEE scorecard has five elements: Ownership, Management Control, Skills Development, Enterprise and Supplier Development, and Socio-Economic Development.

The DA’s proposed policy replaces the scorecard with only two elements: Value for Money Procurement, weighted 80% on the scorecard, and Economic Inclusion, weighted 20%.

The DA's Head of Policy, Mathew Cuthbert, said there is also a disqualification criterion that excludes bidders with a proven record of fraud and corruption.

“You must understand the genesis of B-BBEE was in essence big businesses looking for political entrepreneurs within the African National Congress (ANC) in order to maintain the status quo, and this is largely why we find so many South Africans locked out of opportunities,” Cuthbert stated.

“Simply shuffling the deck chairs on a Titanic by trying to give over shares or ownership of a company it is in essence being used as a method for fronting (a common fraudulent method of subverting B-BBEE policy, usually by appointing Black individuals to positions with titles but not the actual powers or influence associated with those roles, often in a tokenistic manner). And it doesn’t actually filter down in a way the ANC purports it to do. This is why we sit with a Black unemployment rate that is significantly higher than other population groups.”

Cuthbert said the DA is yet to consult its Government of National Unity (GNU) partners on supporting its bill.