Taking BEE Procurement To The Next Level : Verified BEE Supplier Database

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Equity Legislation.jpg

South Africa's second piece of equity legislation passed in 2004, the Broad-Based Black Economic Empowerment (B-BBEE) Act, lacks government enforced sanction, yet many public and private sector companies have embraced this vital initiative.  This acceptance suggests that South Africa's social policies have finally reached a turning-point.

Embracing BEE legislation, however, is much easier than actually implementing effective changes in the way business is conducted.

Most procurement divisions, for example, find the task of identifying BEE suppliers both daunting and time-consuming. This is where Quadrem TradeWorld, the largest black-owned online marketplace in Africa, adds value to the business of BEE Procurement.

By providing organisations with a maintained, centralised and verified supplier database from which to source BEE suppliers, BEE Procurement is made both easier and more effective.

Quadrem's TradeWorld Supplier Database gives buyers access to detailed verified supplier profiles, which are used to automatically apply preferential procurement policy to the transaction process. These transactions can also be managed using Quadrem's sourcing tool, the SourceLink Electronic Purchasing System.

Without access to detailed verified supplier profiles, it is difficult to allocate preferences to the quotes received due to large volumes and short turn-around times.  Among many important variables, buyers need to understand:
   

  • Who the supplier is.
  • The goods / services they are able to supply.
  • The supplier's equity ownership.
  • Supplier compliancy with legislative registration requirements.
  • Whether or not the supplier's registration has been verified as true and correct.

By applying verified BEE profiles to transactions, buyers can draw accurate reports to measure the percentage spent with targeted BEE suppliers.

Government regulations require that all levels of government have a verified supplier database. This has led to a duplication of effort and expense as every government agency, municipality and provincial government department sets up its own database, even though the supplier community is often shared across several databases.

Suppliers are required to complete the same lengthy registration in different formats, even though they are complying with the same common legislation. Quadrem's TradeWorld Supplier Database provides a central registration point for suppliers, as well as a single sourcing database for procurement officials.

The supplier database also filters out quotes received from unregistered and suspended suppliers.  For example, a supplier will be denied registration if they are not registered with the South African Revenue Service, The Department of Labour and the Company Registrar. A supplier will also be suspended if the validity of his/her Tax Clearance Certificate has expired and, where applicable to local government, municipal accounts are in arrears. The central supplier database ensures that before a buyer even invites a supplier to provide a price quote, the supplier is compliant with legislative requirements as well as internal supply chain policies.

Since 2002, Quadrem TradeWorld has built an extensive supplier database of over 18,000 verified suppliers utilised by the Western Cape Provincial Government, the City of Cape Town and twelve local and district municipalities in the province currently sharing this supplier database, branded the Western Cape Supplier Database.

Other provinces have visited the Western Cape to learn from the enormous success that local and provincial government have had in utilising Quadrem's TradeWorld Supplier Database. As a result, Quadrem TradeWorld is currently running similar projects for all levels of government in four South African provinces. These include the Western Cape, Eastern Cape, Free State and Gauteng Provinces. We are also implementing the supplier database tool for a national initiative, which is called the SEDA (Small Enterprise Development Agency) National Procurement Program.
The beginnings of a singular centralised National Supplier Database is starting to take shape. One common registration format means that suppliers and service providers to government organisations only register and maintain their profiles once to conduct business with multiple organisations across the various provinces.
Much progress is being made in Black Economic Empowerment as companies throughout South Africa continue to embrace the equality initiative.  Realising BEE procurement initiatives (using solutions such as those offered by Quadrem TradeWorld) is an important and effective enabler of this process.

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