Specific Goals: Targeting Women, Youth, and People with Disabilities

The Shift to Targeted Transformation

The South African procurement landscape is anchored in Section 217 of the Constitution, which requires a system that is fair, equitable, transparent, competitive, and cost-effective. However, the Constitution also permits procurement policies that provide for categories of preference to protect or advance persons disadvantaged by unfair discrimination.

For years, this was achieved primarily through general B-BBEE levels. Under the 2022 Preferential Procurement Regulations and the 2024 Public Procurement Act, there has been a massive shift toward "Specific Goals". This means government departments and state-owned enterprises (SOEs) now have the autonomy to award points for specific demographics—primarily women, youth, and people with disabilities—rather than relying solely on a company's overall B-BBEE contributor level.

Understanding the Designated Groups

To effectively target these goals, you must understand the specific categories defined under Chapter 4, Section 17 of the 2024 Public Procurement Act:

• Women-Owned Enterprises: Majority ownership (typically $\ge 51%$) by women of all races.
• Youth-Owned Enterprises: Defined as businesses where the majority of owners are under the age of 35.
• People with Disabilities: Majority ownership by persons with recognized physical or mental disabilities.
• Black-Owned Enterprises: Majority ownership by Black people as defined by the B-BBEE Act.
• Small Enterprises (SMMEs): Specifically those owned by the groups mentioned above.
• Geographic/Rural Preferences: Businesses situated in rural or underdeveloped areas or a specific municipality.

The Mechanics of Scoring: 80/20 and 90/10

Specific goals are not just administrative "nice-to-haves"; they are built directly into the scoring formula. Once you pass the functionality threshold (the technical gate), your bid is scored on Price and Specific Goals.

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In a competitive bid where prices are close, these 10 or 20 points are usually the deciding factor. For example, a company that is 100% Black-owned and 51% women-owned might score the full 20 points, while a large corporate with a Level 4 B-BBEE certificate but no specific group ownership might only score 12 points. This 8-point gap can allow the targeted business to win even if their price is slightly higher.

The Return of Set-Aside Tenders

One of the most significant changes in the 2024 Public Procurement Act is the formal legalization of set-asides.

Tip: The single biggest advantage of being a qualifying designated group is the Set-Aside. Instead of competing against major corporates with decades of experience, you compete in a restricted pool of qualifying businesses like your own.

Under Section 17, a procuring institution must set aside certain bids for categories of persons (Women, Youth, Disabilities, etc.) provided there is a competitive minimum of potentially qualifying suppliers. This levels the playing field for startups that lack the 8-10 years of experience often demanded in open tenders.

Proof and Verification: The "Means of Verification"

You cannot simply claim to be women- or youth-owned; you must provide verified evidence. If you fail to submit the correct proof, you will score zero points for those specific goals.

1. CSD Summary Report: The Central Supplier Database (CSD) is the "single source of truth". It verifies your company registration (CIPC), director ID numbers (Home Affairs), and B-BBEE status.
2. B-BBEE Affidavit/Certificate: For Exempted Micro Enterprises (EMEs) with turnover under R10 million, a two-page sworn affidavit is required. Ensure you use the updated two-page version; the old one-page affidavit is often rejected.
3. Medical Reports: To claim points for people with disabilities, you must often submit an accredited medical report or have the status reflected on your CSD profile.
4. Ownership Certificates: For geographic goals, your company’s physical address on CIPC and municipal rates clearance certificates are used as proof.

Strategic Advice: The "Only Director" Trap

A common mistake for established entrepreneurs is remaining the sole Black male director. As the 2024 Act increases weightings for women and youth, these "traditional" structures will start losing tenders to more transformed management teams.

• Fronting Risks: Do not add an 18-year-old child as a director just to get "youth" points if they do not actually work in the business. This is fronting, which is a criminal offense that can lead to being blacklisted for up to 10 years.
• Legitimate Transformation: To secure your future, consider bringing in partners who fall into the women, youth, or disability categories and ensuring they have real decision-making power and shared responsibilities.

High-Growth Opportunities for Designated Groups

The government is specifically pushing for these groups to infiltrate unconventional or high-growth sectors.

• The Green Economy: There is less than 10% representation of women in environmental services. Massive opportunities exist in waste management, water quality testing, invasive species removal, and solar installations.
• Drone Technology: Municipalities and mines are adopting drones for security monitoring, agricultural spraying, and infrastructure inspection. Women-owned businesses are highly encouraged to train in this sector.
• Manufacturing: Local manufacturing of cleaning chemicals, school furniture, and eco-bricks are areas where designated groups can leverage localization preferences.

Key terms to know

• EME (Exempted Micro Enterprise): A business with an annual turnover of less than R10 million.
• QSE (Qualifying Small Enterprise): A business with an annual turnover between R10 million and R50 million.
• Set-Aside: A procurement process where only specific designated groups are allowed to bid.
• Fronting: A fraudulent practice where a business misrepresents its transformation status to gain points.
• Specific Goals: Targeted socio-economic objectives (e.g., job creation, women ownership) that earn preference points.

What's next

In the next lesson, we look at The Ultimate Pre-Submission Checklist, where we provide the final "gatekeeping" steps to ensure you don't get disqualified for minor administrative errors after doing the hard work of meeting specific goals.