The July 2006 issue of Enterprise Magazine (which I found very recently) has "set asides abolished" emblazoned on the cover page. The story tells us that the Treasury had given a directive to government preventing them from using set asides in the tender process. The reason behind this is contained in the directive. It all comes back to the constitution, specifically section 217 (2) and (3). Paragraph 1.1.5 summarises it perfectly
The preferences contemplated in the constitution and PPPFA provide for the protection or advancement of categories of persons, disadvantaged by unfair discrimination without prohibiting any category of bidders from bidding for government contracts.
The question that was seriously bothering me was "why then is Telkom practicing set asides in its procurement?". After all Telkom falls under schedule 2 of the PFMA and this directive must apply to them. When it comes to brazen set asides Telkom is the great white telephone, take a look at this tender document.
The answer to this lies in the first paragraph of the directive, "the practice note is applicable to all national and provincial departments, constitutional institutions and public entities as defined in schedule 3A and 3C of the PFMA."
Telkom is therefore left off the hook and can carry on with their unconstitutional activity. I suspect this will change once they twig that B-BBEE is in fact binding on them. By the way if you are wondering what Telkom's B-BBEE score is, a recent Empowerdex survey rated them at 58.08 (level 5), which does seem hell of a high for such a behemoth.
What about government procurement and BEE?
I have come across a blogger who is best described as an ignoramus to both BEE and government procurement. Said person posted an uninformed diatribe on government and the PPPFA. If that person is reading this - you will be pleased to note that the PPPFA and the B-BBEE codes of good practice are going to be aligned within the near future. And I quote
The revised PPPFA (will) be finalised and the relevant Bill be submitted to Parliament for consideration by June 2007
This circular (number 070419) was issued on the 18th of April this year.
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