If your construction business turns over R10 million or less a year, you get a B-BBEE level automatically, and if turnover is under R3 million you prove it with a sworn affidavit that costs nothing beyond a commissioner of oaths stamp. That level converts directly into preference points on every government tender, so even a contractor with no black ownership should sort the paperwork: an automatic Level 5 beats "non-compliant" on every scoresheet.
The Construction Sector Codes
Businesses earning more than 50% of their revenue from construction-related activities are measured under the Amended Construction Sector Codes, published by the dtic at thedtic.gov.za. These differ from the generic B-BBEE codes, so make sure any advice you read is sector-specific.
EME: the small-contractor category
An Exempted Micro Enterprise (EME) is a contractor with total annual turnover of R10 million or less. EMEs get automatic levels based on black ownership:
- Less than 30% black-owned: Level 5 (80% recognition).
- 30% or more but less than 51%: Level 4 (100% recognition).
- 51% or more: Level 2 (125% recognition).
- 100% black-owned: Level 1 (135% recognition).
How you prove it depends on turnover. Under R3 million, a sworn affidavit signed before a commissioner of oaths is enough; no verification agency, no fee. Between R3 million and R10 million you need a formal rating from a SANAS-accredited verification agency.
QSE and above
A Qualifying Small Enterprise (QSE) turns over between R10 million and R50 million. QSEs are measured on all five scorecard elements; there are no automatic levels, although a QSE that is 51% or more black-owned achieves Level 2 and a 100% black-owned QSE achieves Level 1. Above R50 million turnover you are a generic large entity and need a full SANAS-accredited scorecard measurement.
How your level becomes tender points
Under the Preferential Procurement Policy Framework Act (PPPFA), tenders up to R50 million are scored 80/20: 80 points for price, 20 for B-BBEE. Above R50 million it is 90/10. The preference points by level on the 80/20 and 90/10 formulas:
- Level 1: 20 / 10 points.
- Level 2: 18 / 9.
- Level 3: 14 / 6.
- Level 4: 12 / 5.
- Level 5: 8 / 4.
- Level 6: 6 / 3.
- Level 7: 4 / 2.
- Level 8: 2 / 1.
- Non-compliant: 0 / 0.
One caveat: the PPPFA regulations have been challenged and amended in recent years, and some provinces have added their own validation requirements, so check the current position with National Treasury before a big bid.
Worked example: how the affidavit wins work
Sipho runs a sole-proprietor painting and plastering business, 100% black-owned, with annual turnover of R2.5 million. Turnover is under R3 million, so a sworn affidavit is all he needs, and 100% black ownership gives him automatic Level 1 under the Construction Sector Codes. On an 80/20 municipal painting tender worth R1.5 million, Sipho scores the maximum 20 preference points. A competitor that is 30% black-owned (Level 4) scores 12; one under 30% (Level 5) scores 8. At equal prices Sipho wins comfortably, and the 12-point gap over a Level 5 rival means he can even carry a somewhat higher price and still come out on top.
The flip side matters too: a white-owned EME still gets automatic Level 5 and 8 points on an 80/20 tender, which is far better than the 0 points of a contractor who never bothered with the affidavit. For any small contractor bidding public work, the affidavit is essential admin, not optional.
Common mistakes
- No affidavit at all. Non-compliant means 0 preference points on every tender you enter.
- Using the generic codes. Construction has its own sector codes with different EME levels.
- An expired affidavit. Affidavits are valid for 12 months; tender packs are checked for the date.
- Paying a verification agency under R3 million. You do not need one; a commissioner of oaths stamp is free at most police stations.
- Claiming a level you cannot evidence. Misrepresenting B-BBEE status on a tender is an offence and gets you blacklisted.
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