Vendor B-BBEE fraud: a growing concern for CPOs

July 18, 2019

By Schalk van der Merwe

South African Chief Procurement Officers (CPOs) are often tasked to oversee the transformation of procurement spend at a near-impossible speed. This creates a pressure that is only equalled by the pressure that certain vendors find themselves under to improve their Broad-based Black Economic Empowerment (B-BBEE) credentials for these more demanding procurement requirements. In a scenario where pressure from both sides of the equation is towards bending the rules, taking for granted vendor integrity and governance may have severe consequences for CPOs.

Areas of concern
The B-BBEE regulations, as they stand since 24 October 2014, have raised the bar from previous versions in terms of transformation and are forcing vendor companies to seriously reconsider their B-BBEE-strategies. This message is not new, but as vendors settle for new strategies, it becomes clearer where they are exploiting grey areas or even where new patterns of fraud are emerging.

Two areas that contribute significantly to a company's B-BBEE rating are Ownership (25 points) and Enterprise and Supplier Development (ESD) (30-40 points).

Read the full article here: Vendor B-BBEE fraud