Can bidders be disqualified for not having B-BBEE documents?

By Gerrit Davids, Lead Advisor at TaranisCo Advisory

The BEE Act of 2003 is clear in its instruction that all organs of state must ‘Take into account and as far as reasonably possible, apply any relevant code of good practice in terms of this Act,’ when issuing licenses, concessions, tenders through a Preferential Procurement Policy and when selling state-owned enterprises or entering into Public-Private Partnerships.

What must also be taken cognizance of, is that the Act in itself does not make it compulsory for bidders to government contracts, to be B-BBEE compliant and therefore no organ of state, when issuing tenders, would be allowed to make it a compulsory demand, for a bidder to be B-BBEE compliant.

However, that would only be applicable for all tenders, which do not include the “Pre-Qualifying Criteria”. In terms of Regulation 4 (1) (a) and (b) of the 2017 Preferential Procurement Policy Framework Act Regulations (PPPFA), an organ of state is entitled to include the “Pre-Qualifying Criteria” as a stipulation of tender, by demanding, for example, that all bidders must at least be, “A Level 4 B-BBEE Status Level of Contributor” or an Exempted Micro Enterprise (EME) or Qualifying Small Enterprise (QSE), respectively.

If in such an instance, a bidder does not supply the organ of state with an original or a certified copy of either their Affidavit or B-BBEE Certificate respectively, then the bidder will have submitted an “Unacceptable Tender”.

However, if the “Pre-Qualifying Criteria” was not a specific demand of tender, the Regulations are very clear and specific, in that, where a bidder does not submit proof of its B-BBEE status or it’s a non-compliant contributor, it may not be disqualified, but it will not score any points for B-BBEE but would still score points for price.

It is important for bidders, to always understand their rights within the overall tendering. Also, it should correct organs of state, where it demands that bidders must submit proof of its B-BBEE status, if the tender per se, has not included the “Pre-Qualifying Criteria”, as a barrier to entry.

Bidders must also be advised, that when forming Joint Ventures, the individual proof of the B-BBEE status of each respective partner, is not submitted with the tender, but only the consolidated scorecard, issued for the Joint Venture.