Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003)

Amended Codes of Good Practice (2017)

Amended Code Series CSC400: Measurement of the Preferential Procurement and Supplier Development Element of Broad-Based Black Economic Empowerment in the Construction Sector

Statement CSC400: The General Principles for Measuring Preferential Procurement and Supplier Development

5. Total Measured Procurement Spend
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The following procurement is measurable within Total Measured Procurement Spend:

 

5.1 Cost of sales: all goods and services procured that comprise the cost of the sales of the Measured Entity;

 

5.2 Operational expenditure: all goods and services procured that comprise the operational expenditure of the Measured Entity;

 

5.3 Capital expenditure: all capital expenditure incurred by the Measured Entity;

 

5.4 Public sector procurement:
5.4.1 All goods and services procured from Organs of State and Public Entities. Despite this, procurement by a Measured Entity from a local government authority, which is a reseller of that service, is measurable at the B-BBEE Recognition Level of the primary Supplier of the service; and
5.4.2 In any event, any procurement of any goods or services from any Organ of State or Public Entity that enjoys a statutory or regulated monopoly in the supply of such goods or services is excluded;

 

5.5 Monopolistic procurement: all goods and services procured from Suppliers that enjoy a monopolistic position measurable at the recognition level of the supplier;

 

5.6 Third-party procurement: all procurement for a third-party, a client or Unincorporated Joint Venture, where the cost of that procurement is an expense recorded in the Measured Entity's annual financial statements measurable at the recognition level of the supplier;

 

5.7 Labour brokers and independent contractors: any procurement of the Measured Entity that is Outsourced Labour Expenditure;

 

5.8 Pension and medical aid contributions: Payments made to any post retirement funding scheme or to a medical aid or similar medical insurer by a Measured Entity for its Employees, excluding any portions of such payments which are a contribution to a capital investment of the Employee. The scheme or insurer must issue a certificate dividing payments between the capital investment portion and the balance to establish the amount that is measurable within Total Measured Procurement Spend;

 

5.9 Trade commissions: Any commission or similar payments payable by a Measured Entity to any other person pursuant to the business or trade of the Measured Entity;

 

5.10 Empowerment related expenditure: All goods and services procured in carrying out B-BBEE. The Total Measured Procurement Spend does not include the actual contribution portion recognised under section 2.3 of this statement and Code series CSC500 but does include any expenditure incurred in facilitating those contributions;

 

5.11 Imports: All goods and services that are imported or procured from a non-South African source; and

 

5.12 Intra-group procurement: All goods and services procured from subsidiaries or holding companies of the Measured Entity (BEE credentials of the entity supplying goods and/or services must be confirmed by way of a valid BEE certificate).

 

5.13 All salaries, wages and allowances paid to non-South African employees.