FORWARDING AND CLEARING SUB-SECTOR CODE FOR B-BBEE – Preferential Procurement

This is the fourth article describing the FORWARDING AND CLEARING SUB-SECTOR CODE FOR B-BBEE.

Guiding Principle

The principle is to accelerate procurement from Black-owned and/or empowered enterprises and/or good contributors to B-BBEE with the main objective of growing existing or emerging entrepreneurs to produce value-added goods and services for the industry and increase employment as well as allowing for the creation of new businesses.

Stakeholder undertakings

The government commits to the following:

Government departments, state-owned enterprises, and other public agencies will align their own procurement practices to this sub-sector code when

procuring goods and services from the F&C sub-sector. In particular, the government will apply B-BBEE criteria, as set out in this sub-sector code, whenever it:

1. Grants a licence to engage in a specific regulated economic activity;
2. Grants a concession to a private enterprise to operate an asset or enterprise on behalf of the state;
3. Enters into a public-private partnership; and
4. Engages in any economic activity.

Private industry commits to the following:

1. Procure at least 50% of total measurable procurement spend from B-BBEE suppliers based on their recognition levels within the next 5 years and 70% of total measureable procurement from B-BBEE suppliers based on their recognition levels within the next 10 years.
2. Procure at least 10% of total measurable procurement from QSEs and EME in the next 5 years and 15% over 10 years.
3. Procure at least 9% of total measurable procurement from 50% black-owned, and 6% of the total measurable procurement should be from the 30% Black women-owned enterprises over the next 5 years. Procure at least 20% of total measurable procurement from 50% Black-owned and 30% Black women-owned enterprises over the next 10 years.
4. QSEs within this sub-sector commit to procuring a minimum of 40% of total procurement from B-BBEE-compliant suppliers over the next 5 years and 50%
   over the next 10 years.
5. Adopt and customise the guidelines on accounting for affirmative procurement that will be set by the Transport Sector B-BBEE Council, as specifically agreed by the F&C sub-sector stakeholders and signatories to this Charter.
6. An understanding that the 10-year targets stated above may be subject to change as a result of a revision of the sub-sector code 5 years from its inception.
7. Recognising that a consolidation of invoices may be recognised as a single “invoice” in terms of the measurement principles of Statement 500 of the B-BBEE Codes of Good Practice.

Measurement Principles and the Application of the Sub-Sector Code

1. Measurement principles associated with the preferential procurement element are contained in Statement 500 of Code 500 of the Generic Code of Good Practice.
2. The formulae required in the determination of the preferential procurement score for measured entities are contained in Annexure 500 (A) of Statement 500 of Code 500 of the Generic Code of Good Practice.
3. Measurement principles required in evaluating the preferential procurement contributions made by QSEs within this sector are contained in Statement 805 of Code 800 of the Generic Codes of Good Practice.