Joint Ventures and B-BBEE

Government Entities must use the Preferential Procurement Point System to calculate which tender response will be awarded the tender and if you do not have a good B-BBEE Score and if it is a close race, you are going to lose out with a low B-BBEE Score.

On 1 May 2015, the Amended B-BBEE Codes of Good Practice came into effect.  These Amended Codes place a lot of emphasis on Ownership and have a major impact on the B-BBEE Scores of all businesses that participate in B-BBEE in South Africa.  If your company is not going to score any points on Ownership you are also going to struggle to achieve a good B-BBEE Level.  This will negatively impact your tender response. 

Joint Ventures can be a great tool to use to increase B-BBEE Scores by joining forces with Black Owned companies thus increasing your Ownership. If you have the correct Joint Venture partner, with a good B-BBEE score, the overall score that you will achieve in the Preferential Procurement Point System can be much higher than going into the tender alone.

When bidding through a Joint Venture, the Joint Ventures must submit a Consolidated B-BBEE certificate if it is not an incorporated entity when responding to tenders.  This means that you will have to obtain a new B-BBEE certificate for the Joint Venture which consolidates each participant’s B-BBEE status level.  You apply for a Consolidated B-BBEE certificate at your B-BBEE Verification Agency who will issue the Consolidated B-BBEE certificate after combining the Joint Venture partners’ B-BBEE Certificates – this should not be a tedious task and it should not take long at all.

The Consolidated B-BBEE certificate must be tender specific – in other words it must contain the name and number of the tender that you are responding to.