How do Empowerment Levels work?
1. Various activities score points for a company. The number of points earned corresponds to the empowerment level achieved.
2. The benefit of a company having a better empowerment Level is that its clients multiply any spend with it by a higher factor, the B-BBEE Recognition Level.
|B-BBEE Level||Old Codes||Revised Codes||B-BBEE Recognition Level|
|1||≥ 100||≥ 100||135%|
|2||≥ 85 but < 100||≥ 95 but < 100||125%|
|3||≥ 75 but < 85||≥ 90 but < 95||110%|
|4||≥ 65 but < 75||≥ 80 but < 90||100%|
|5||≥ 55 but < 65||≥ 75 but < 80||80%|
|6||≥ 45 but < 55||≥ 70 but < 75||60%|
|7||≥ 40 but < 45||≥ 55 but < 70||50%|
|8||≥ 30 but < 40||≥ 40 but < 55||10%|
|Non-Compliant||< 30||< 40||0%|
3. The table above demonstrates that it has become significantly more difficult to achieve a desired Empowerment Level under the Revised Codes.
B-BBEE Recognition Level
1. The B-BEE Recognition Level is a modifier that is used by Measured Entities’ clients to multiply their spend with the Measured Entity in order to determine the total value of Total Measured Procurement Spend spent with the Measured Entity.
2. For example, if a client spends R100 with a level 2 Measured Entity (125% recognition level) then the value of expenditure that the client can allocate to their TMPS will be:
R100 x 125% = R125
3. In effect, a Level 2 Measured Entity grants its customers a 25% bonus on any money spent with it towards the clients’ Preferential Procurement score making the Measured Entity a more attractive counterparty to do business with.
How does a company earn Empowerment Points?
1. There are five categories in which a company is expected to perform. They are:
|Revised Codes||Generic / Draft ICT|
|No||Element||Codes Series Reference|
|4||Enterprise & Supplier Development||400|
|4.1 – Preferential Procurement|
|4.2 – Supplier Development|
|4.3 – Enterprise Development|
2. Companies are awarded points for undertaking certain activities in each of the categories. In some categories under the Generic Scorecard, there are also Bonus Points awarded for certain activities.
3. The breakdown of the points available under each category are shown below:
|Revised Codes||Generic Scorecard|
|No||Element||Weighting Points||Bonus Points||Total Points|
|4||Enterprise & Supplier Development|
|4.1 – Preferential Procurement||27||2||29|
|4.2 – Supplier Development||10||2||12|
|4.3 – Enterprise Development||5||5|
|Total Possible points||111||9||120|
4. Notwithstanding that the Generic Scorecard is scored out of a total of 120 points, there are in fact 111 Weighting Points and 9 Bonus Points available to companies which, in certain circumstances, make it easier for a company to achieve the desired Empowerment Level.