Business Day newspaper reported on Tuesday that government tenders up to R10m will in future be evaluated only 50% on price and 50% in terms of black economic and women’s empowerment and other criteria.
Draft amendments to the Preferential Procurement Regulations were recently published for comment by the Treasury – and they’re rather different from the present 80% price and 20% non-price assessment rule.
What will happen if or when the amendments are passed is this: government’s procurement process will permit bidders for tenders under R10m to up their prices by 50% more than market value and still be awarded the tender.
Government tenders already have a bad reputation, but with these amendments, the elite will continue to benefit at the expense of the majority of low income South Africans. Why on earth must government pay a higher premium on tenders when it’s already battling to stay afloat?
The Business Day adds that “on the basis of the scores it is therefore possible that a black, women-owned, small or medium-sized enterprise could win a tender with a price that is almost 60% higher than a company that does not meet the non-price criteria.”
A small group of already rich companies have in the past used BEE as a way of acquiring even greater wealth and this proposed amendment only adds to this shoddy scenario. More of the tax payer’s money goes to friends of the government and less to the large number of poor people who lack basic services.
Instead all procurement policies should aim at bringing newcomers into the economy – and that means those who haven’t so far been awarded empowerment tenders.
But perhaps new faces aren’t welcome? Perhaps those who have already benefited from BEE don’t want to be left out of future BEE deals? The hundreds of millions of rand that this small group already owns in assets doesn’t appear to be enough – and the ‘Broad Based’ part of BEE seems to have been forgotten.