Sometimes you can't contain the natural flow of expletives when you come across what appears to be the biggest load of kak ever written. This is an advertisement placed by MB Technologies (I'm not going to grace them with a hyperlink).
So dig, there is an equation which says that their new deal with Royal Bafokeng Holdings = 125%. What this means that you can claim R1.25 for every R1 you spend with them. There is a disclaimer in very small print at the bottom of the ad - subject to reclassification post RBH acquisition.
How are you going to claim these points then?
- They cannot regard themselves as a category A enterprise development beneficiary (the purchasing company can claim R1.25 for every R1 they spend with them), because category As can only be QSEs or EMEs.
- Maybe they are a value-added supplier (an entity registered as a vendor under the VAT Act, whose net profit before tax summed with its total labour cost exceeds 25% of the value of its total revenue). You can claim the R1.25. It must be pointed out that value-added suppliers are not differentiated in terms of their ownership - so it would appear that white-owned companies can claim this too.
I can tell you this much - there is no way (and I state NO WAY) that they are going to do this through the scorecard. A R1.25 contributor has to score between 85 and 100 points. Let's go through the scorecard and see where these points are going to come from.
- Ownership - possible to get all 23 points for ownership. Royal Bafokeng would probably have a broad-based list of beneficiaries, whether there are new entrants is another story. The shares would have to be completely paid up though.
- Management - the MB website has three white males as directors. They had better get at least another three black directors, one of whom should be female. And it won't be a bad idea to throw in another four independent non-exec black directors. I wouldn't give them all ten points at the outset - maybe five.
- Employment equity - there are not enough black IT skills for them to claim all fifteen points (I'm not going to consider the bonus points). And don't forget the sub-minimum of 40% as well. I reckon maybe a maximum of 5 points.
- Skills development - maybe they get the points. But they must have already implemented skills plans targeted at priority skills especially for black people. If this is not in place then not a point is to be had and we are talking about 15 points. Let's be generous and give them 10 points.
- Preferential procurement. Come on - these guys either import IT kit or are distributors. They will never sneak under the radar for imports. It is also highly unlikely that 15% of their purchases come from 50% black-owned and 30% black-female owned companies. That's 5 points out of the way - they'd probably only get 2-5 points.
- Enterprise development - easy points, you can buy them for 3% of NPAT.
- SED - same again, 1% of NPAT
By my calculations they should get about 60 (very generously). I'd love to know who advised them on this - perhaps they know something I don't.
Obed - do you have an opinion on this?
PS - I spoke to a procurement manager today (big company) and she said that an ad like this would steer her away from this company.
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