South Africa: The BEE Loophole That Keeps Gifting Covid-19 Tenders

opinion

The BEE Commission, which monitors compliance with empowerment legislation by companies, has joined the fray by placing the responsibility squarely on state organs to ensure that contracts/tenders are awarded lawfully and not based on patronage networks.

Although Black Economic Empowerment (BEE) is well-intentioned for creating an inclusive economy and reversing the stubborn legacy of apartheid that still determines access to opportunity for black citizens, the policy has become a major pitfall during the Covid-19 storm.

The pitfall of BEE has been underscored by the state's current and enormous procurement processes of personal protective equipment (PPE) and other Covid-19-related goods.

Before SA's first case of Covid-19 was officially confirmed on 5 March, the BEE policy had long been built into the state's procurement ecosystem - valued at almost R1-trillion annually - and is crucial for how tender bids by companies are evaluated.

In other words, a company's empowerment/transformation profile (black ownership and management) is one of the main criteria used by the state to determine if it is worth being awarded a tender to supply PPE and Covid-19 related goods such as face masks/shields, hazmat suits, gloves, hand sanitisers and ventilators.

But BEE has not (in some cases) been empowering for...

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