The Generic Scorecard Structure

 

The B-BBEE Codes is legislation that requires practical implementation by measured entities.

 

The Revised B-BBEE Codes were gazetted on 11 October 2013 (GG 36928), with further subsequent Revisions and clarification notices having been subsequently gazetted.

the Amended Construction Sector Code is based on the definitions, principles and methodologies of transformation outlined in the B-BBEE Amendment Act No. 46 of 2013, the Amended Codes of Good Practice for B-BBEE gazetted on 11 October 2013, Gazette No. 36928 and Codes of Good Practice for Qualifying Small Enterprises gazetted on 06 May 2015, Gazette No. 38766.

 

As brand new legislation, there is very little precedent as to how many of the provisions will be interpreted. In addition, there are a number of clauses in the Revised Codes and Scorecard which seemingly contain errors, omissions/ and or that require clarification.

 

Accordingly, some of the information and methodology contained in the Helpfiles and Scorecard Software are based on BEE123’s interpretation, using the substance over form principle and inferring our opinion as the DTI’s intention behind the legislation. BEE123 accordingly bears no liability in relation to same. Please check with your verification agency as to their interpretation.

 

• are entities with an annual turnover of above R 50 million for Contractors and above R25 million for BEP’s.

• are measured in accordance with the Generic scorecard as contained in Construction Sector Code Series 100-500.

• must include all 5 of the BEE Elements (detailed below) in order to calculate their overall BEE score.

 

Ownership
Measurement Category & Criteria		Weighting Points	Compliance Target
2.1 Voting Rights	2.1.1 Exercisable Voting Rights in the Entity in the hands of Black people.	4.5	32.5% (35% - Year 4)
	2.1.2 Exercisable Voting Rights in the Entity in the hands of Black women.	2	10% (14% - Year 4)
2.2 Economic Interest	2.2.1 Economic Interest of Black People in the enterprise.	4.5	32.5% (35% - Year 4)
	2.2.2 Economic Interest of Black Women in the enterprise.	2	10% (14% - Year 4)
	2.2.3 Economic Interest of any of the following Black Natural People in the Measured Entity: Black Designated groups; Black participants in Employee Share Ownership Programmes; Black people in Broad Based Ownership Schemes; Black Participants in Co-operatives	3	10% (12% - Year 4)
	2.2.4Involvement in the Ownership of the enterprise of black New Entrants	5	5%
2.3 Realisation Points	2.3.1 Net Value	6	Refer to Annexe CSC100 (E)
2.4 Bonus (Modified Flow Through may not be applied)	2.4.1 Exercisable Voting Rights in the Entity in the hands of Black People above 50%	1	Yes
	2.4.2 Exercisable Voting Rights in the Entity in the hands of Black People above 75%	2	Yes
	2.4.3 Exercisable Voting Rights in the Entity in the hands of Black Women above 50%	1	Yes
TOTAL		31

 

Management Control
Measurement Category & Criteria		Weighting Points	Compliance Targets
2.1 Board Participation	2.1.1 Exercisable voting rights of black board members as a percentage of all board members.	3	50%
	2.1.2 Exercisable voting rights of black female board members as a percentage of all board members.	1	20%
	2.1.3 Black Executive directors as a percentage of all executive directors.	2	50%
	2.1.4 Black female Executive directors as a percentage of all executive directors.	1	20%
	2.1.5 Bonus Points: Exceeding the Target for Black Executive Directors	1	> 50%
	2.1.6 Bonus Points: Exceeding the Target for Black female Executive Directors	1	> 20%
2.2 Other Executive Management	2.2.1 Black Other Executive Management as a percentage of all Other Executive Management	2	60%
	2.2.2 Black female Other Executive Management as a percentage of all Other Executive Management	1	30%
2.3 Senior Management	2.3.1 Black employees in Senior Management as a percentage of all senior management.	2	60%
	2.3.2 Black female employees in Senior Management as a percentage of all senior management.	0.5	30%
2.4 Middle Management	2.4.1 Black Employees in Middle Management as a percentage of all middle management.	1	75%
	2.4.2 Black female employees in Middle Management as a percentage of all middle management.	0.5	30%
2.5 Junior Management	2.5.1 Black Employees in Junior Management as a percentage of all junior management.	1	88%
	2.5.2 Black female employees in Junior Management as a percentage of all junior management.	0.5	35%
2.6 Employees with disabilities	2.6.1 Black Employees with Disabilities as a percentage of all office based Employees	0.5	2%
2.7 Black Professionals	2.7.1 Black professionally registered Employees as a percentage of all professionally registered Employees	2	50%
2.8 Bonus Points	2.8.1 Black Employees that are “youth” as defined by the National Youth Commission Act of 1996, as a percentage of all Employees using the Adjusted Recognition for Gender.	2	30%
TOTAL		22

 

Skills Development
Measurement Category & Criteria		Weighting points	Compliance Target
2.1.1 Skills Development Expenditure	2.1.1.1 Skills Development Expenditure on Black People as a percentage of the Leviable Amount.	4	2% (2.5% - Year 3) (3% - Year 5)
	2.1.2.1 The portion of SD Expenditure using the Adjusted Recognition for Gender (ARG) on African People (as defined in the Stats SA EAP)	2	%Contribution of African People to EAP
	2.1.2.2 The portion of SD Expenditure using the Adjusted Recognition for Gender (ARG) on Black Executive, Senior and Middle Management.	2	15%
	2.1.2.3 The portion of SD Expenditure using the Adjusted Recognition for Gender (ARG) on Black Junior Management.	1	10%
	2.1.2.4 The portion of SD Expenditure using the Adjusted Recognition for Gender (ARG) on Bursaries or Scholarships for Black People.	2	15%
2.1.3 Learnerships, Apprenticeships, Internships and Professional Registration	2.1.3.1 Number of Black People participating in Category A, B, C or D learning programmes as per the Learning Programme Matrix, as a percentage of the total number of Employees.	3	2.5%
	2.1.3.2 Number of Black Employees registered as candidates with industry professional registration bodies as a % of the total number of such registered Employees.	3	60%
	2.1.3.3 Number of Black People with Disabilities on Category A, B, C, or D learning programmes as per the Learning Programme Matrix, as a percentage of black office based learners on those learning programmes.	1	5%
2.1.4 Mentorship	2.1.4.1 Implementation of an Approved and Verified Mentorship Programme (as per Annexe CSC300 C).	3	Yes
2.1.5 Bonus Points	2.1.5.1 Percentage of Black People Absorbed by the Measured Entity at the end of a Category A, B, C or D learning programme.	1	100%
	2.1.5.2 The number of black employees that completed a Mentorship Programme during the last 3 years (including the measurement period) that were promoted during the Measurement Period expressed as a percentage of all such employees during those 3 years.	2	15%
	2.1.5.3 The number of Black Employees who registered as a Professional with industry Professional Bodies as a percentage of all Employees who registered as such in the Measurement Period	2	60%
TOTAL		26

 

Preferential Procurement and Supplier Development
Measurement Category & Criteria		Weighting Points	Compliance Targets
2.1 Preferential Procurement	2.1.1 B-BBEE Procurement Spend from all Empowering Suppliers based on the B-BBEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend	6	80%
	2.1.2 B-BBEE Procurement Spend from all Empowering Suppliers that are Exempted Micro-Enterprises based on the applicable B-BBEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend	3	15%
	2.1.3 B-BBEE Procurement Spend from all Empowering Suppliers that are Qualifying Small Enterprises based on the applicable B-BBEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend	3	15%
	2.1.4 B-BBEE Procurement Spend from Empowering Suppliers that are at least 51% Black Owned based on the applicable B-BBEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend	4	20%
	2.1.5 B-BBEE Procurement Spend from Empowering Suppliers that are at least 35% Black Women Owned based on the applicable B-BBEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend	3	12%
Bonus Points	2.1.6 B-BBEE Procurement Spend from Empowering Suppliers that are at least 51% owned by Black Designated Groups based on the applicable B-BBEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend.	3	20%
	2.1.7 B-BBEE Procurement Spend from Empowering Suppliers that are at least 51% Black Women Owned based on the applicable B-BBEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend	1	8%
2.2 Supplier Development Programmes	2.2.1 Compliant Supplier and Contractor Development Programmes	5	Annexe CSC 400 (C)
2.3 Supplier Development Contributions	2.3.1 Annual value of all Qualifying Supplier Development Contributions made by the Measured Entity as a percentage of the Target.	8	3% NPAT
	2.3.2 Annual value of all Qualifying Supplier Development Contributions towards 51% Black Women Owned entities made by the Measured Entity as a percentage of the Target.	2	20% of value in 2.3.1
TOTAL		38	Max 5 Bonus

 

Socio-Economic Development
Measurement Category & Criteria		Weighting Points	Compliance Target
2.4 Socio-Economic Development	2.4.1 Annual value of all Qualifying Socio-Economic Contributions by the Measured Entity as a percentage of the Target	4	1.25% of NPAT
	2.4.2 The portion of Qualifying Socio-Economic Contributions in 2.4.1 above spend on Communities with Limited Services.	1	30% of Target in 2.4.1
Bonus Points	2.4.3 Annual value of contributions towards Structured SED Projects by the Measured Entity as a percentage of the Target	1	1.25% of NPAT
TOTAL		6

 

GRAND TOTAL

123

 

The following table explains each tab in the software:

 

Element	Indicator
Ownership	The Ownership element measures the equity held by black people in the entity in terms of voting rights, economic interest and realisation points. The Ownership element is a Priority Element
Management Control	The Management Control element measures black participation at board, executive level and senior, middle and junior management levels and the employment of black disabled staff.
Skills Development	The Skills Development element is designed to improve the skills set of black people and measures skills development expenditure on black people and participation in learnership, internship and apprenticeship programmes. The Skills Development element is a Priority Element.
Preferential Procurement and Supplier Development	Preferential Procurement measures the empowerment levels of the entity's suppliers in terms of the procurement of goods and services.   Supplier Development measures the entity’s contribution towards the upliftment, development, sustainability, financial and operational independence of Enterprise and Supplier Development Beneficiaries.   The Preferential Procurement and Supplier Development element is a Priority Element
Socio Economic Development	This Socio Economic Development element measures the entity’s contribution towards initiatives or organisations that enhance the ability of black people who remain non participants in the economic mainstream to be included in participating in the economy in a sustainable manner.
Summary	The Summary provides a consolidated view of the achievements in relation to each of the 5 elements, as well as the cumulative total points achieved and corresponding BEE Status Level.

 

An entity’s BEE status level is determined in accordance with the cumulative score it receives in respect of the aforementioned elements.

 

BEE Status	Qualification	BEE Recognition Level
Level 1 Contributor	≥120 points	135%
Level 2 Contributor	≥115 but <120 points	125%
Level 3 Contributor	≥110 but <115 points	110%
Level 4 Contributor	≥100 but <110 points	100%
Level 5 Contributor	≥95 but <100 points	80%
Level 6 Contributor	≥90 but <95 points	60%
Level 7 Contributor	≥75 but <90 points	50%
Level 8 Contributor	≥55 but <75 points	10%
Non-Compliant Contributor	<50 points	0%

 

The Codes have defined the following elements as the Priority Elements in terms of transformation imperatives:

 

1. Ownership

• 40% subminimum on Net Value points

2. Skills Development

• 40% subminimum on Skills Development element points

3. Preferential Procurement and Supplier Development

• 40% subminimum on Preferential Procurement points
• 40% subminimum on Supplier Development programmes points
• 40% subminimum on Supplier Development Contributions points

 

A Generic Entity is required to achieve the 40% subminimum in relation to all 3 of the above Priority Elements (including all 3 of the subminimum targets under Preferential Procurement and Supplier Development element.)

 

Should a Generic Entity not achieve the required 40% subminimum in relation to all 3 of the above Priority Elements its B-BBEE Status will be discounted by 1 level.

 

Bonus Points are totally excluded from the determination of the sub-minimums targets. In addition it appears that any bonus points earned will not be regarded when determining if the measured entity has met the sub-minimum targets.

 

Ownership

 

• 31 points (25 points on 2009 Codes))

• Priority Element *for Realisation Points

• Separate Ownership scorecard for BEPsCan only apply the Exclusion Principle or the Modified Flow Trough Principle, cannot apply both principles (previously could apply both principles).

• Modified Flow Trough can only be applied once in the entire ownership structure (previously once in each chain of ownership).

• Broad-based schemes

• Inclusion into main Scorecard(previously mainly bonus)

• New entrant

• Inclusion into main Scorecard(previously bonus)

• Threshold increased from R20 million to R50 million.

 

Management Control

 

• New Element- Consolidates Management Control and Employment Equity into a single element

• 22 points (10+10=25 points on 2009 Codes)

• Race group sub categories added

• Adjusted Recognition for Gender removed

• Categories:

  • Board Participation

  • Executive Management

  • Senior Management

  • Middle Management

  • Junior Management

  • Disabled Employees

• Other amendments / additions

  • ‘Senior Top’ and ‘Other Top’ consolidated into Executive Management

  • Executive and Senior Management consolidation for flat structures

  • Bonus points when exceeding target for Black Executives Directors

  • Bonus points for employing Youth

 

Skills Development

 

• 21 points for Contractors and 29 for BEPs(15 points for Contractors and 20 BEPs on 2007 Codes)

• Race group sub categories added

• Priority Element*

• Adjusted Recognition for Gender removed

• Non-employees trained now counted under the Skills Development element

• New Labour compliancy requirements:

  • Workplace Skills Plan

  • Audited Training Report

  • Pivotal Report

  • Have implemented a Priority Skills programme for employees generally, and more specifically for black people.

• Increased targets on Skills Development expenditure from 2%-5%

• Caps on certain expenditure:

• Expenditure arising from Informal training or Category F and G Learning Programmes under the Learning Programmes Matrix cannot in aggregate represent more than 35% of the total value of Skills Development Expenditure.

• Learnerships expanded to include Apprenticeships and Internships

• Bonus points for Absorption of Learners, employees who completed a mentorship programme and Black Professionally registered employees

 

Preferential Procurement and Supplier Development

 

• New element- Consolidates Preferential Procurement and Supplier Development into a single element

• 38 points (20+15=35 points on 2009 Codes)

• Priority Element*

• 3 sub-elements:

1. Preferential procurement
2. Supplier development Programmes
3. Supplier development

 

1. Preferential Procurement

• Empowering Supplier added

• Stepped up targets

• Focus on procurement from black and 35% black female owned suppliers

• Value adding suppliers removed

• New multipliers added

  • Supplier Development Beneficiaries with a 3 year contract

  • 51% black owned EME or QSEs with a 3 year contract (non- Supplier Development beneficiaries)

  • First time Suppliers

• Bonus points for spend from Suppliers that are at least 51% owned by Black Designated Groups

• Bonus points for spend from suppliers that are at least 35% Black Woman Owned.

• Limitation on imports

  • Supplier development required

  • Designated sectors excluded

• Priority element subminimum*

2. Supplier Development Programmes (Enterprise Development removed)

3. Supplier Development (Enterprise Development removed)

• Similar to new ED, but for Suppliers

• Definition of SD beneficiary

• Priority element subminimum*

Socio Economic Development

• 6 points
• Emphasis shift to interventions that facilitate job creation and sustainable access to the economy

• Annual recognition only- cumulative recognition removed