Why Your BBBEE Level Determines Your Tender Success
Price is not the only factor. Discover how your BBBEE level acts as a gatekeeper to government contracts and why improving it is your best investment.
The Math of Winning
Many business owners view BBBEE compliance as a grudge purchase—a box to be ticked. This mindset loses tenders. Under the Preferential Procurement Policy Framework Act (PPPFA), tenders are evaluated on two things: Price and Preference (BBBEE).
For most contracts (under R50 million), the 80/20 system applies. 80 points for price, 20 points for BBBEE.
The 10% Price Premium Myth
There is a misconception that you can charge 10% or 20% more if you are Level 1. That is dangerous logic. While Level 1 usually gives you a buffer, competitive pricing is still king. However, if you and a competitor quote the exact same price, but you are Level 1 and they are Level 4, you win by a landslide (8 points clear).
Strategic Improvement
Moving from Level 4 to Level 2 might require a small investment in Skills Development or Supplier Development, but the Return on Investment (ROI) is securing a multi-million Rand contract. Don't look at the cost of compliance; look at the cost of losing.
Use our BBBEE Calculator to scenario-plan. See what happens if you spend an extra R50,000 on skills development. Does it bump you a level? If so, it's likely worth it.
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Based on this article's topics, here are some current tenders that might interest you
APPOINTMENT OF A SERVICE PROVIDER TO CONDUCT ORGANISATIONAL REVIEW ALIGNED TO THE TURN AROUND STRATEGY 2024 FOR PERIOD OF 24 MONTHS
APPOINTMENT OF A SERVICE PROVIDER FOR THE DEVELOPMENT OF LIMPOPO PROVINCIAL WASTE ECONOMY (CIRCULAR ECONOMY) STRATEGY.
Appointment of a service provider for the development of an Enterprise Architecture (EA) and ICT strategy for the Social Housing Regulatory Authority
APPOINTMENT OF A SERVICE PROVIDER TO WORK WITH THE DEPARTMENT OF SPORT ARTS AND CULTURE (DSAC) AND THE MZANSI CRAFT COUNCIL (MCC) TO UNDERTAKE SOME REFINEMENTS TO AN ALREADY EXISTING CRAFT STRATEGY WHICH WILL INFORM THE WORK OF THE DSAC IN THE DEVELOPMENY OF THE CRAFT SECTOR OVER THE CURRENT MEDIUM TERM DEVELOPMENT PLAN (MTDP
THE APPOINTMENT OF A PROFESSIONAL SERVICE PROVIDER TO REVISE 2012 NATIONAL FORESTRY SECTOR RESEARCH AND DEVELOPMENT STRATEGY, FOR A PERIOD OF SIX (6) MONTHS
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Why Your BBBEE Level Determines Your Tender Success
Price is not the only factor. Discover how your BBBEE level acts as a gatekeeper to government contracts and why improving it is your best investment.