BEE Certificate: Do 100% black-owned businesses need BEE certificates? YES!

A BEE Certificate is for getting your business work or tenders from procurement departments!

WHO IS BLACK PERSON IN SOUTH AFRICA?

A Black person, is as all people who may have been disadvantaged under the apartheid government, and includes Black, Coloured, Indian or Chinese demographics. However the individual must have been a citizen before 1994.

Example : A Chinese immigrant who has only received citizenship in 2005 would not be considered ‘Black’ as defined by the act.

DO 100% BLACK-OWNED BUSINESSES NEED A BEE CERTIFICATE?

YES! In South Africa more business opportunities are available to you if you have a BEE Certificate. If you are a supplier to the manufacturing, or retail industry, you might find that your buyer requests that you have certification. You have to be certified if you want to tender.

In almost every way, having a BEE Certificate in todays business economy is useful and an advantage to your company. A BEE Certificate could be requested by one of your suppliers or customers without warning and being able to answer that you are compliant gives a good impression of your company. As it only takes a few days to organise why not register yourself today?

CLICK HERE & Get Your BEE Certificate Quote Now!

IS IT HARD TO GET A BEE CERTIFICATE?

The greater the turnover the harder and more expensive it becomes and the harder it is to do? For most companies (except architect and travel industries) whose turnover is less then 10 million, they only require a BEE Exemption certificate. This can be easily done in a few days for prices starting at R490.

For companies who have larger turnover, an office visit is required, where a government approved agent will test you concerning a variety of areas. If you have to do this the cost of a BEE Certificate rises very quickly.

WHAT IS SANAS AND SANAS CERTIFICATION

SANAS is the government agency, who accredits companies to do BBBEE certification. There are only a few companies is South Africa that can issue SANAS approved certificates.

If you are not exempt from proper certification, then you will need a SANAS approved company to visit you and score you in accordance with the required prerequisites. They will then issue you with a SANAS approved certificate.

CLICK HERE & Get Your BEE Certificate Quote Now!

WHAT ARE THE DIFFERENCE BETWEEN THE LEVEL 1,2,3,4?

The smaller the number the better the level. In the past we had level 3 and level 4. Level 3 is better the level 4. Level 4 is intended by white owned companies, or companies where more then 50% of their shareholding is white. The mark for level 4 is 100%, and level 3 is 110%

Level 3 was the best option if you are majority Black Owned (see definition of Black above). In a nutshell if you have a level 3 certification, your quote might be 10% more costly then your Level 4 competition and you could still win the tender.

A new series of codes were released in October 2013, listing the new codes of Level 1 and 2 for companies who don’t appear in specific sectors. This means that a Black Owned company could get a Level 1, which equates to 135% Bee Rating as an EME.

Generally, if you are 100% Black owned, you will receive a level 1 certificate. In unique cases, certain departments in South Africa might not yet recognise this level (they are outdated departments as this law is now over two years old) and you might be disqualified. In these cases you are welcome to request a level 3 instead.

CLICK HERE & Get Your BEE Certificate Quote Now!

AND WHAT HAPPENS IF I AM WHITE AND CALL MYSELF BLACK?

Manipulating the system is a serious legal offence. Copies of ID’s are required and they are used as basic testing in this regard.

WHAT YOU NEED TO DO A BEE CERTIFICATE

  • Company Registration Docs
  • ID documents of each director (Certified)
  • Application form of the BEE issuer company. (Completed)
  • Affidavit from the BEE issuer company needs to be signed.(Completed)

FOR PTY’S ONLY

A copy of your Share Certificates

CLICK HERE & Get Your BEE Certificate Quote Now!

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BEE POINTS STRATEGY: Increase BEE points for Winning Tenders using learnership training

Save South Africa: Learnership training is the only solution left for South Africa to beat youth unemployment!

My little brother is an inspiration even to me, he failed maths in 2015, and then went to supplement it in 2016 but did not perform well still! In 2017 on his own went to supplement again! Now he is getting 70-80% maths and physics at the time of writing this article, why he keeps fighting? He has a dream to be an architect and nothing will stand in his way! He been drawing since he was young and who knows maybe he can help solve the housing problem in South Africa using architecture innovation, but my little brother is “lucky”…

The Youth Unemployment Problem in South Africa

South Africa needs a work force with technical skills period! Or else no jobs! Let me repeat, possibly this warning you reading here is one of the last warnings in this era of uncertainty engulfing our country, South Africa needs to create technical skills fast to beat unemployment! Else…

…MORE CAR HI-JACKINGS, ROBBERIES, POVERTY …

Help South Africa while getting R80 000 tax rebate per employee and up to 20 BEE points through learnership training

Learnership training basically means, your company takes say one or two matriculants off the streets into its umbrella for 1 year for work-based job skill training, you pay for that learnership training but then claim it back from government, and at the end of the year the matriculant ends up with a SETA NQF qualification recognised.

CLAIM YOUR R80 000 TAX REBATE PER EMPLOYEE!
  • R80 000 TAX REBATE PER EMPLOYEE
    Take two matriculants claim your R 160 000 tax rebate! When you develop their job skills!
  • GET *FREE EMPLOYEES FOR A YEAR!
    What can you do with *FREE employees for year? Increase sales!
  • LITTLE WORK INTERRUPTION!
    Employee skills development classes are twice a month!
  • WIN TENDERS!
    Improve your B-BBEE scorecard by up to 20 points through skills development!
  • Improve productivity or income and loyalty from a trained workforce!
* Note: To claim these benefits you must enrol an existing or matriculant in a learnership or skills development program.
*Free means it works out as you having not paid anything after claiming your benefits.

If Yes, contact us:CLICK HERE

Tender Joint Venture (JV): Working together we can do more!

What about tendering together with another business?

Working together we can do a Tender Joint Venture, isn’t?

This is called a joint venture (JV). When two businesses form a joint venture (a partnership between two business) they each contribute to the project and share the profit. In this way two (or more) small businesses may be able to win a large tender that neither would have been able to take on alone.

Use the following guidelines when selecting a tender joint venture (JV):

  • Choose you partner very carefully. Like any partnership, a tender joint venture (JV) thrives on mutual trust and collapses when partners become suspicious of the others motives, agendas and ethics
  • Enter into negotiations early
  • Rather involve two or more smaller tender joint venture (JV) partners than one other firm that is much bigger than you are; and
  • Draw up a formal tender joint venture (JV) agreement and state all expectations clearly, including usually vague notions such as the one partner empowering the other with skills.

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Bank Financial Guarantees for Tenders

R100 money notes

Government wants entrepreneurs to show that they have enough money to execute a tender for a certain period before payments come, usually the period is 3 months, this is becoming a trend, so a bank financial guarantee is a letter from your  bank that states that the bank guarantees that you have the financial means up to a certain amount, you can include this letter in your bid for a government tender.

READ MORE: How to find tender finance when even banks refuse you?

Typically, the financial guarantee is a guarantee that you will have enough cash flow to cover the minimum period before your first payment comes for rendering your service, this is usually 3 months.

You will earn points for securing a Financial Guarantee that shows that your business will have enough money or cash to pay for expenses incurred for the minimal time to execute the tender, as stipulated by government.

The Financial Guarantee goal is to make government or company see that your business will have necessary resources to provide the service to government or company and execute the tender successfully, many tenders fail because the entrepreneur run out of money to do the tender.

READ MORE: How to find tender finance when even banks refuse you?

An example of a typical Financial Guarantee requirement in a tender may look thus:

“The responding bidder must show capacity to deliver a sustainable service for a period of three (3) months without external support.

In order to do so a Bank guarantee letter must be provided and this will count for 10 points towards the Functionality score:

  • Supplying a R9 000 000.00 financial guarantee will earn the bidder 10 points;
  • Supplying a R6 000 000.00 financial guarantee will earn the bidder 6 points;
  • Supplying a R5 000 000.00 financial guarantee will earn the bidder 3 points;
  • A guarantee of less than R5 000 000.00 will earn the bidder zero points.

Any other proof of financial resources for funding which the bidder intends on utilising to fund this project can also be submitted. (The Department requires this information to ascertain whether the bidder can carry the initial cash commitments for a period up to three (3) months for the district, or each of the districts, awarded to the bidder without any additional external support).”

READ MORE: How to find tender finance when even banks refuse you?

Please ask your bank what Financial Guarantee they can provide you if you wish to apply for a tender and in fact actually was awarded it, this exercise of asking your bank will definitely help your business as the bank will probably give you more advice on what criteria you need to comply with.

I am Start-Up what can I do?Financial Guarantee

A Joint Venture is another business strategy by which you can add capacity to your business when you do have the skills necessary to execute the tender but lark, say, money or machinery.

READ MORE: How to find tender finance when even banks refuse you?

Find more information by reading our “how to tender in South Africa” general overview article.

How do I tender in South Africa?

READ THIS!

Ok, before you rush to registering for TolaTender.co.za, the only truly FREE tender alert service in South Africa, please read this first!

First of all, you need to establish whether your business is capable of meeting the requirements of the tender. Usually, an invitation to tender is very specific about the practical tasks to be accomplished. Be realistic about your ability to accomplish those tasks. Remember, failure to deliver what is required at the stated costs and within the time agreed will probably make you liable for penalties in terms of the contract.

As a guideline, an enterprise that is ready to tender:

  • Is a registered business
  • Has a good banking record, credit history and relationship with its suppliers and clients
  • Is able to deliver – on time, on budget and according to specifications
  • Is up to date with its taxes
  • Pays its bills on time
  • Has the required cash-flow and other resources to complete the contract
  • Is pro-active, actively looking for business opportunities
  • Is able to deliver goods or services of consistent quality
  • Has qualified employees
  • Has, or can acquire, the right equipment, clothing and accessories to complete the tender
  • Has registered its employees with the Department of Labour (UIF, Skills Development Levy, Workmen’s Compensation etc.); and
  • Has products that complies with SABS standards

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Does my business have to be registered as a CC or company?

No. A sole trader or partnership may tender. However, the business has to be:

  • Registered or licensed with the relevant local authority
  • It must have a bank account; and
  • It must be registered with the South African Revenue Services and must have an up-to-date tax clearance certificate.

What about tendering together with another business?

YOU MAY LIKE: HOW TO FIND MONEY OR FINANCE FOR YOUR TENDER WHEN BANKS REFUSE YOU?

This is called a joint venture (JV). When two businesses form a joint venture (a partnership between two business) they each contribute to the project and share the profit. In this way two (or more) small businesses may be able to win a large tender that neither would have been able to take on alone.

Use the following guidelines when selecting a JV:

  • Choose you partner very carefully. Like any partnership, a JV thrives on mutual trust and collapses when partners become suspicious of the others motives, agendas and ethics
  • Enter into negotiations early
  • Rather involve two or more smaller JV partners than one other firm that is much bigger than you are; and
  • Draw up a formal JV agreement and state all expectations clearly, including usually vague notions such as the one partner empowering the other with skills.

HOW DO I COMPLETE THE TENDER DOCUMENTATION?

  • With great care and precision! Follow the instructions carefully. Even the smallest error may result in the cancellation of your tender application.Your nearest Tender Advice Centre (TAC) will help you get hold of and complete the tender documents.
  • Be quite sure that you have enough time to prepare and submit an offer before the due date.
  • It is up to you to deliver or post your tender documents to the correct address by the due date, and indeed at the correct time. If the closing time is 12 noon, your tender will be disqualified if it is handed in at one minute past 12.
  • The tender will include all the requirements and specifications for the goods and services to be supplied. Be quite sure that you will be able to comply.
  • Include in your tender details all the relevant experience you have in relation to the proposed contract.
  • Do not forget to:
    • Include your VAT registration number, if you have one.
    • Guarantee the quality of your products or services. Also provide details of any SABS or ISO marks or sign of quality assurance that you are entitled to use.
    • Offer substitute products or services where necessary
    • Offer to make refunds if you fail to deliver as agreed.
    • Declare the percentage or quantity of imported products
    • State patents and details of any royalties
    • Describe the packaging
    • Give the time and place of delivery
    • Provide samples of products or goods if required
    • Use delivery documentation including delivery notes
    • Complete the tender documents in ink and sign alterations in full.
    • Obtain import permits for goods that were not made in SA; and
    • Supply the prices that you paid for the goods.

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You will need to complete the following standard forms for National and Provincial government tenders:

FORM ST 36 Conditions for tendering with the state Also includes details of the addresses for delivery of your tender application.
FORM ST 8 Official cover page of the tender document To be signed in ink. Includes details of the buying department, validity period and closing date
FORM ST 5 Tax Clearance Certificate Obtained from SARS, should be valid at time of submitting the tender and should have a validity period longer than the validity period of the tender document.
FORM ST 6 Essential conditions relating to the tender Supplementary conditions to those laid out in ST36. Important to study carefully, as deviation from these conditions may invalidate your tender.
FORM ST 7 Closing dates, tender number, durability, price, delivery period etc. Also deals with the description fo the product of service concerned. Different ST7 forms may be use for different types of goods or services.
FORM ST 10 Asks questions that will help in the adjudication of the tender State any deviation in specification from those in the original tender; whether or not your quoted price is firm; whether you are an agent for the product or service; the amount of stock you carry; the type and location of the service facilities you offer; your VAT number (if any).
FORM ST 11 Promotes development of local businesses Preference Point Certificate to be signed. Applies only for services less than R2 million.
FORM ST 12 Prevents tendering on the basis of association Declaration of interest. EnPromotes development of local businesses suring fair and equal treatment, you must declare any relations with members of the tender board or government department.
Note: These forms are part of the tender invitation and are also available at any procurement office.

Keep in mind that you need to make a profit but that competing tenderers may offer a lower price.

In order to be competitive, experienced tender advisors normally suggest a cost plus 7.5% tender price. This may vary according the level of expertise and general availability (market) of the service or goods required.

COSTING AND ESTIMATION:

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This often requires an educated guess based on the following researched tender specifications:

  • Quantities of material needed
  • Length of time to completion
  • Minimum lead-time required (that is, the time before actually starting on the contract, often the time in which preparations are made)
  • Insurances needed
  • Depreciation of vehicles and equipment over the course of the contract
  • Indirect costs
  • Capacity to complete the contract

Some costs are variable – they may fluctuate as production fluctuates:

  • Labour
  • Materials
  • Equipment

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Other costs are termed fixed costs or overheads:

These costs do not fluctuate with increases or decreases in production. Examples of costs that are usually fixed are:

  • Electricity
  • Owners salary
  • Subscriptions
  • Vehicle leases
  • Stationery

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The following are also important considerations:

  • Will the purchaser be making interim payments (so that your business maintains cash-flow and can pay the weekly salaries, materials and so on)? This is especially important for lengthy contracts.
  • Will you require bridging finance? If so, do you have security for a loan?
  • If you will need to borrow money to perform the contract, you should do the groundwork while you are preparing the tender. Then if you win the contract, you will be able to get a loan so much more quickly.

DO I QUALIFY FOR PREFERENCE POINTS?

The law requires the application of a preference point system for tenderers who are Previously Disadvantaged Individuals (PDIs) or women.

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  • Generally, for government tenders under R500 000, 80% of the tender will be adjudicated on price and 20% on the PDI or gender status of the business owner(s).
  • For tenders over R500 000, the 90/20 price system applies.

You have to complete the relevant section (ST 11) if you want to be eligible for consideration under this system.

THE LETTER OF ACCEPTANCE

  • If you submit your tender to the right address by the due date and time, the Tender Board will let you know in writing whether you have been successful or not.
  • If your tender was accepted, you have to start planning to deliver the goods or services you offered.

If at first you don’t succeed, try and try again.

  • Every time you complete a tender document you will learn more about the process and requirements of tendering.
  • Once you have a won a tender, and built up a track record, things get a bit easier.

Where do I find latest tender information?

 TolaTender.co.za is the only truly FREE tender alert service in South Africa, there are other tender services of course if you search Google.

I NEED MORE HELP:

  • Phone seda at 0860 103 703.
  • Contact you nearest Tender Advice Centre. Get the contact details from seda.