What can of worms is that you have in your hand

I was away this week, I went fishing with a bunch of mates and our families.  I actually left on Friday last week so that I could swim the Midmar.  Unfortunately I got whatever Oliver gave me and it took me down for three weeks.  I ended up impressing the Massmart CEO with my extreme coughing capabilities.  Nice guy, he never commented once.

On Monday morning I get an excited phone call from Obed, his company has just been accredited as a verification agency.  He tells me BEE-Matrix  is one of 11 companies that made the cut (three of them are NERA agencies - IF YOU GUYS ARE VAGUELY HAPPY WITH YOUR ACCREDITATION THEN UPDATE YOUR WEBSITE).  OK - so much for my prediction that this wouldn't happen before the elections (I've been away, has the election date been announced yet?).  

I then start getting phone calls from all and sundry telling me a little bit of insider info, none of which I can remember to write about.  One person tells me that EmpowerDextrous has chanced their arm by announcing that they will only accept announced that they will only accept certificates from accredited agencies (I can't confirm this but I have experienced something like this from EmpowerDeckchair before).   My first reaction (reinforced by a short walk on the beach whilst sacrificing my lungs to the sea) was, why not start a campaign to reject EmpowerDexadrine's certificates.  They are regarded as a very average company in the market place - certainly by those in the know (you'll notice that they haven't put up the fact that they are accredited on their website) so you might just use section 2.6 and say show me the evidence.

But what is that going to achieve?  Whether you like them or not, rate them or not, their annual FM survey is very useful in the rating process (all of which are self-assessments by the way).   And they are not alone - already Foschini Group (courtesy of a Mr Chris Harries) are asking my clients when they can expect an accredited certificate (seems EmpowerDextreme might be involved in this somewhere).

AND THIS IS REALLY WHAT I WANT TO TALK ABOUT

OK Chris'nDex let's look at the feasibility of your request.  We know that almost every single incorporated (and in some cases unincorporated) entity has to produce some sort of a certificate.  This includes government, universities etc.  The best place to look for the number of entities is on the CIPRO website - more specifically here.  Go to page three (Total Active Entities as at 31/12/2008).  Once you add up those figures you'll see that we are talking about a total number of 2,363,837 entities - I'll round that off for the innumerate TWO MILLION AND THREE HUNDRED AND SIXTY FOUR THOUSAND entities - and that is before you take the government departments into account. 

Assume that

• 60% are EMEs, this leaves us with 945,535 entities that have to be verified.  Each verification agency would have to verify 85,957.71 entities each year (1,653.03 per week)
• 70% are EMEs, this leaves us with 709,151 entities that have to be verified.  Each verification agency would have to verify 64,468.28 entities each year (1,239.77 per week)
• 80% are EMEs, this leaves us with 472,767 entities that have to be verified.  Each verification agency would have to verify 42,978.85 entities each year (826.52 per week)

How practical is this Chris'nDex? I would suggest to you that it is totally impractical.  And when you take into account that shocking verification manual (you MUST go on Kevin's course - the folly of this document takes on Pythonesque proportions), you'll see that it will take weeks to do a large company (and there are lots of those), even a QSE will take up to a week to get all the necessary documents together.  I wonder if NERA and EmpowerDexwife do anywhere near 826 in a single year.

This is not an extreme example - it's reality.  We would need in the region of 500 agencies to get through each entity every year.  You'll notice that there are 9131 incorporated or professional firms operating in this country.  A large number of these are accountants who audit companies (who would audit the 454,626 pty ltds each year).  Maybe 500 is actually not enough.

MY RECOMMENDATION

Keep a level head here.  Already ABVAMoose has announced that those agencies that have applied to SANAS are able to issue valid certificates.  Don't reject other certificates - whether they be self-assessments or issued by some other party.   If you insist on an accredited verification certificate then be ready for a hell of a long wait before your trusted supplier can actually get an appointment with one of those agencies.

Comments

[Sakkie O'Neil]

Point 3.3.2 of Code Series 500 of the Codes states: "a Value-adding supplier, the recognisable B-BBEE Procurement Spend that can be attributed to that Supplier is multiplied by a factor of 1.2; and". On page 93 of the gassetted code under "Value-Adding Enterprise" the Codes supply the following definition:- "means an Entity registered under the Value-Added Tax of 1991, whose Net Profit Before Tax summed with its Total Labour Cost exceeds 25% of the value of its Total Revenue". As can be seen two qualifications exists - registered as a vendor under VAT (no mention of VAT collector) as well as the performance qualification. I had a quite heated exchange with Mr Chris Harries regarding this as his take is that as we "collect" VAT, we are a value-adding enterprise. Based on the above I disagreed with him as we haven't disclosed any information for him to work out whether we meet the second qualification. So I would personally treat Foshini's scorecard with a bag of salt (luckily they are not a supplier to us).

[cindy]

election date has been gazetted, it is 22/4/09