Page 10 - KZN Business Sense - Vol4 No1 - eBook

CONSTRUCTION COMPANIES TO TAKE HEED OF

NEW B-BBEE CODES

Vash Singh, Managing to influence their level as Ownership: ■ Informal training (Categories suppliers (see EME and QSE
Director of Xcelerate a competitive advantage. ■ Stepped targets are in place for F & G) have a higher limitation sections) – this boosts
Verification Agency Discounting does not apply to years 1-3, and then year 4 of 35% (rather than 15% in your Procurement and Supplier
T he EMEs (<R3m for Contractors/ onwards where black ownership for more of this type of training following ways – contact us to
start-up companies or for small
the General Codes), allowing
Development points in the
targets move from 32.5% to 35%
Material Suppliers or R1.8m
to be recognised by
assist you with this initiative:
and black women ownership
Amended for BEPs). For the latter, an from 10% to 14%. construction companies. x SMMEs and Black owned
affidavit or CIPC certificate
■
Mandatory training which
Construction is required. For others, only ■ Bonus points are available for cannot be included in the skills companies now have their best
Sector SANAS accredited rating agencies high levels of black ownership. spend is specifically defined possible BEE level confirmed
Code was can produce a certificate with ■ For BEPs, >50% of shareholders as the following, hence all other by a SANAS accredited
gazetted on the adjusted ratings. EMEs can must be professionally training can be claimed. verification agency, to use to
1 December choose to be assessed on the QSE registered must be registered develop their companies
2017 with scorecard as another option for with a BEP professional council, x Site, project or safety inductions x Large companies increase
immediate possible enhancement. For more and a member of the executive x Toolbox talks their procurement spend by
effect and to a large extent is clarity visit xcelbee.co.za/blog. committee. Should this not x Operators re-certification getting proper, optimised BEE
different from the General be the case, only half of the ■ The racial demographic certificates for their suppliers,
Amended Codes. Companies QSEs black shareholders who do calculation is relevant only on and the spend with Xcelerate
are urged to implement these QSEs are in the R10-50m annual not meet these requirements one sub-indicator, making it Verification Agency to conduct
new requirements to ensure turnover bracket for contractors/ may be included in the much easier to score on this the work increases
they score well on their next material suppliers or R6-25m ownership calculation. element than the other Revised procurement scores even
B-BBEE rating. annual turnover for BEPs. A Management Control: Codes. further due to our status as a
discounting or enhancing effect Level 1 Empowering Supplier
No junior management targets
Who does it apply to? applies to QSEs, hence allowing ■ for BEPs. Preferential Procurement & – EME, 100% black-owned and
This Code applies to for companies to influence their ■ Points available for percentage Supplier Development: >51% black women owned.
organisations which derive level as a competitive advantage. professionally registered staff ■ The requirement for x The spend for EME verification
>50% of annual revenue from Only SANAS accredited rating that are black. Empowering Supplier status is is also used to score points
construction related activities. agencies can produce a certificate as per the Amended DTI Codes under the Supplier Development
Key categories are: with the adjusted ratings (no ■ Bonus points are available for element.
affidavits allowed). exceeding black director targets – blanket approval is being
Material Suppliers – and having black employees applied to every company at Socio-Economic Development:
manufacturing, creation or Joint Ventures that meet the definition of this stage. It is important to ■ Extra points for 30% of the
supply of building material and Unincorporated joint ventures “youth”. take note of the requirements spend being on “Communities
equipment used in construction are common in the construction ■ The reporting of Employment as most aspects must be applied with Limited Service”, the
e.g. cement, concrete, bricks, industry and are required to Equity returns to the in the financial year. definition of which is page
electrical equipment, steel, plant have a consolidated verification Department of Labour is not ■ The points and targets for spend 74 regarding access to water,
hire, plumbing. certificate based on the weighting a pre-requisite to earning on ≥51% black-owned suppliers electricity and household
of the joint venture parties. points on this element. are lower than other amended income.
Built Environment Professional Hence, individual certificates ■ Racial demographics feature in codes.
(BEP) – planning, design and or affidavits must be valid and the calculation of scores for ■ Bonus points are available for ■ Bonus points for structured
costing of construction projects meet the Amended Codes senior, middle and junior spend on Black Designated SED Projects, of which the
e.g. consulting engineers, requirements. The points that management points. required records are listed on
architects, quantity surveyors, are used for the calculation of the Groups and enhanced spend page 62 of the Codes.
on ≥51% black women-owned
town planners, project joint venture certificate scoring, Skills Development: suppliers. ■ Contributions benefitting black
management. and BEE level, are listed in the ■ The annual submissions to the ■ The 3 points for Black women- people with disabilities is
Contractors – who conduct Codes. SETA by 30 April every year is a owned spend is on suppliers increased by a factor of 1.25.
pre-requisite to earning any
construction project activities Generic Scorecard points on this element. that are ≥35%, not ≥30% as per The Amended Codes can be
including civil engineering, other amended codes. downloaded off our website
electrical engineering, power The Generic Scorecard is split ■ Stepped targets are in place ■ The qualifying beneficiaries and www.xcelbee.co.za/downloads.
transmission, general building, into different requirements for for total Skills Development requirements for the Supplier and As there are many specifics
specialist construction works contractors (including material spend for immediate effect, Contractor Development within the element scorecards
e.g. construction works, wiring, suppliers) >R50m annual and then at year 3, and then Programmes are listed on pages and principles, it is important to
air-conditioning, heating, asphalt turnover and BEPs >R25m annual year 5 onwards. Additional 52-53 of the Codes. understand the fine print.
work, excavations, scaffolding and turnover: points are then available based ■ To optimise points, 20%
on how and to whom the spend
support, shop-fitting, structural In general, companies need was done e.g. African people, of Supplier Development Xcelerate Verification Agency
steelwork, water-proofing. to be aware of the concept of black management and contributions should be to is SANAS accredited on this
All such companies are “Priority elements” where 40% bursaries/scholarships. suppliers that are ≥51% black new Code and are specialists
on the Construction industry.
required to submit their B-BBEE of the points for Ownership ■ The Learning Programme women owned. We look forward to providing
certificates annually to the (net value), Skills Development Matrix has been adapted for ■ Up to 75% of the points (versus advisory or verification services
Construction Sector Council (excluding bonus points) and the Construction industry, so 15% on the other amended to all those interested in having a
for tracking and monitoring Preferential Procurement & it is important to pay attention to Codes) can be attained on competitive advantage. 
purposes. Supplier Development (excluding the descriptions. Learnerships shorter payment terms with
bonus points) – are each of the now include Category A suppliers.
EMEs three broad categories. Should learners as well! ■ Companies can earn Supplier Contact us on 0861 505 555,
this not be met on any one of
EMEs are either below R10m them, the certificate level will ■ The maximum period of Development points by funding info@xcelbee.co.za
www.xcelbee.co.za
annual turnover bracket for be discounted one level down recognition for a Professional the certification of their xcelbee.co.za/blog
contractors/material suppliers or from the level scored. Hence, Registration learnership is
below R6m annual turnover for the importance of tracking this 5 years.
BEPs, or a start-up company in its aspect within the financial year ■ 3 points available for an
first year of operations. to avoid disappointment at time Approved and Verified
of verification. Mentorship Programme, the
A discounting or enhancing specifics of which are clearly
effect applies to EMEs, hence The key differences in the defined on pages 44-45 of the
allowing for companies elements are as follows: Codes.

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