BLACK ECONOMIC EMPOWERMENT, PREFERENTIAL PROCUREMENT AND SMALL BUSINESS DEVELOPMENT IN EKURHULENI
Date
2011-05-19
Authors
MOLEKWA, BEN THAYI
Journal Title
Journal ISSN
Volume Title
Publisher
Abstract
Procurement in general and tender criteria – selective purchasing – in particular, is an instrument that is used to achieve non-economic goals. South Africa introduced affirmative action policies under the auspices of the Employment Equity Act No. 55 of 1998 to redress the imbalances created by apartheid. The goals of affirmative action, black economic empowerment and preferential procurement included wealth redistribution through the promotion of SMMEs that are owned by previously disadvantaged communities. Small black contractors that grow and expand their businesses may create wealth for previously disadvantaged communities such that redistribution of wealth is achieved and more employment opportunities are created.
The purpose of this study is to investigate whether preferential procurement through its evaluation criteria is promoting black economic empowerment in housing procurement or not. The researcher examined the relevant legislation and policies, and interviewed builders of RDP houses in Ekurhuleni. The findings revealed conflict in BBBEE Act and preferential procurement. While the former aims at promoting participation of previously disadvantaged black contractors, the latter discourages this through its evaluation criteria. The evaluation criteria place too much emphasis upon price and do not include business skills. Resulting from this, small black contractors in housing procurement do not grow, and wealth is not redistributed. This research proposes the reallocation of points, the inclusion of business skills and social cohesion in the evaluation criteria
Description
MM - P&DM
Keywords
Black economic empowerment, Small businesses, Procurement, Preferential