1. B-BBEE ALIGNMENT OF PPPFA AND B-BBEE ACT

2. PROGRESS AND STATUS REPORT ON THE ALIGNMENT OF PPPFA AND THE B-BBEE Act PROGRESS REPORT

3.  the dti has been engaging with the National Treasury (NT) on the process of alignment of the PPPFA to the B-BBEE Act.  Considerable work has been done by the two departments and the dti has made inputs into the proposed amendments.  Alignment process to be tabled in Parliament as part of next year’s legislative programme. PROGRESS REPORT

4. Pursuant to a bi-lateral agreement between NT and the dti; The dti and NT decided to institute interim measures to amend current PPPFA Regulations retaining the point system but using the balance scorecard methodology as prescribed by the B-BBEE Act For immediate short term, retain PPPFA and amend Regulations to be brought in line with B-BBEE Act –Use definitions contained in the B-BBEE Act and Codes of practice eg. Black people –Use B-BBEE Scorecard to calculate points out of 10 or 20 CURRENT ALIGNMENT INITIATIVES (INTERIM MEASURES)

5. Points to be awarded to a bidder based on the B-BBEE status level Eg. Level 1 contributor would receive 20 points whilst level 4 contributor would receive 12 points out of a maximum of 20 points. Level 1 contributor would receive 10 points whilst level 4 contributor would receive 5 points out of a maximum of 10 points. Draft compiled with some refinements to be agreed to and completed by NT and the dti CURRENT ALIGNMENT INITIATIVES (INTERIM MEASURES)

6.  Bidders would be required to achieve a certain minimum B- BBEE status level to qualify for further consideration.  Micro enterprises would be exempted from requirement to comply with B-BBEE status level requirements – automatic level 4  B-BBEE status level of bidders would be determined on the basis of balanced scorecard methodology as prescribed in the B-BBEE Act LONG TERM ALIGNMENT INITIATIVES

7.  Evaluation would be based on price after it has been ascertained that bids comply with specifications and minimum B-BBEE status level  Organs of states would determine and prescribe for each bid what the minimum B-BBEE status level of a bidder should be in order to qualify for evaluation (taking into account specific industries, bids and gazetted codes etc.)  Minimum status levels must be determined taking into account EME’s, incentive of potential suppliers to reach BEE targets, uncompetitive behaviour etc. LONG TERM ALIGNMENT INITIATIVES

8. Minister of Finance’s approval to advertise draft revised Regulations for comments– will be advertised in national and provincial government gazettes Advertisement and closing dates for comments Evaluation and incorporation of comments and legal refinement Approval from Minister of Finance and formal promulgation of revised Regulations Roll-out (including training / information sessions and workshops joint effort by NT and the dti. WAY FORWARD

9. Treasury and the dti would monitor policy outcomes closely – to influence national policy National Government required to monitor own outcomes to influence own policy CONCLUSION

10. CONTACT DETAILS Makhosazana Seate BEE Director : Procurement Transformation Tel: 012 394 1694 Fax: 012 394 2694 Cell: 083 703 8543 E-mail: mseate@thedti.gov.za