Preferential Procurement

Preferential procurement has also been called affirmative procurement, and positive procurement.
It is a form of procurement which can be used as an instrument of policy and was developed in South Africa by a task team appointed by the Ministries of Finance and Public Works to reform public sector procurement.
In South Africa, it is being used as a means to implement an Affirmative Procurement Policy aimed at eradicating the legacy of apartheid, which left South Africa with an inwardly focused economy, distorted by growth inequities, inefficiencies and under-developed resources and markets.
Its secondary use is to address more long term socio-economic issues, viz., increasing the volume of work available to the poor and generating income within the marginalised sectors of society.

The Generic Scorecard measures procurement from BEE enterprises and specific targets are set for procurement from Qualifying Small Enterprises and Exempted Micro Enterprises as well as 50% black owned and 30% black women owned Enterprises. The Qualifying Small Enterprise Scorecard only measures BEE Procurement spend from all suppliers.

Total Measured Procurement Spend (TMPS) is defined as the total procurement (TP) minus certain exclusions which the BEE Codes provides for. TP basically includes all cost of sales, operational-and capital expenditure and Permissible exclusions are taxes and levies, salaries and wages, investments and loans, enterprise & socio-economical development and imports under certain conditions.

BEE2Business is able to render specialist services in the following:

Supplier BEE Assessments
Designing of Preferential Procurement Polices and Strategies
Calculation, updating and reporting on Preferential Procurement scores on BEE suppliers

Technical Insert

The BEE Status and the BEE Recognition Level of a supplier can be determined based on the following table, as contained in Code 000, Statement 000:

BEE Status	Overall score on the Generic/QSE Scorecard	BEE Recognition Level
Level One Contributor	≥100 points	135%
Level Two Contributor	≥ 85 but <100 points	125%
Level Three Contributor	≥ 75 but <85 points	110%
Level Four Contributor	≥ 65 but <75 points	100%
Level Five Contributor	≥ 55 but <65 points	80%
Level Six Contributor	≥ 45 but <55 points	60%
Level Seven Contributor	≥ 40 but <45 points	50%
Level Eight Contributor	≥ 30 but <40 points	10%
Non-Compliant	Less than 30 points	0%