BBBEE CHANGES IN THE CONSTRUCTION SECTOR

After the Construction Council unveiled the Construction Sector Code draft to the public on the 28th October 2016, up to 35 comments were received during the 60 day period. Most of these comments related to the calculation formulas, technical queries on the weighing points, corrections and minor additions on the text as well as few contesting the new scope of application of the sector.As a result of the recommendations and suggestions that were received from the public, the construction sector scope of application will be amended.

PPPFA effect on BBBEE

The revised Preferential Procurement Policy Framework Act (PPPFA) has been published and gazetted and will be effective as of 01 April 2017. Due to the revision of this Act, all other existing codes are expected to be aligned to comply with it. Two important requirements are to be aligned;

*Section 6(5) states that ” a tender may not be awarded points for BBBEE status level of contributor if the tender document indicates that the tenderer intends sub-contracting more than 25% of the value of the contract to any other person not qualifying for at least the points that the tenderer qualifies for, unless the intended subcontractor is an EME that has the capability to execute the sub-contract”,

*Rule 9(1) & (2) which states that “if an organ of state intends sub-contracting above the value of R 30 million, then the organ of state must not only sub-contract to advance designated groups, but must advertise the tender with a specific condition that the successful tenderer must sub-contract a minimum of 30% of the value of the contract to the following;

An EME or QSE with at least 51% black ownership,

An EME or QSE with at least 51% black youth ownership,

An EME or QSE with at least 51% black women ownership,

An EME or QSE with at least 51% ownership of black people with disability,

An EME or QSE with at least 51% ownership of black people living in rural areas, a co-operative owned by black people or black people who are military veterans.

Are you ready for BBBEE implementation?

The will be no transitional period allowed for the implementation of the new construction Sector Code. Since the entire industry was aware of the ongoing revision, all companies are expected to be ready to comply.Is your company ready to comply? Click here to contact us for assistance.