Many organisations underestimate the risk of working with Non-Compliant suppliers. While it may feel sufficient to request a B-BBEE certificate, a Non-Compliant certificate does not protect your business, it actively weakens your scorecard.
Preferential Procurement is measured on the value of total spend, weighted by supplier recognition levels. Suppliers that are Non-Compliant carry a recognition level of zero, meaning spend with them contributes nothing towards procurement targets.
When procurement achievement drops below the required threshold, the consequences escalate quickly. Procurement is a priority element and failure to meet the minimum requirement can trigger scorecard discounting and reduce your overall B-BBEE level.
This impact is not limited to large suppliers. Multiple small, Non-Compliant suppliers can collectively represent a significant portion of spend, creating the same scoring risk.
Ultimately, procurement decisions affect far more than compliance. They influence tender eligibility, contract pricing and client confidence. Managing supplier compliance is therefore a critical commercial decision that directly impacts business sustainability.
By Dr Ivor Blumenthal
