Issue Date: 
Wednesday, December 2, 2015

The difference between Supplier and Enterprise Development

The Amended B-BBEE Codes of Good Practice came into effect on 1 May 2015. This means that any business that has a turnover of more than R10 million per annum and that participates in B-BBEE will have to comply with these Amended Codes. Although B-BBEE is absolutely voluntary, it is going to become difficult to avoid if your business is main stream, irrespective of what your turnover is.

One of the easiest ways to earn points is through the Enterprise and Supplier Development Element. This Element counts for 40 points on the Generic Scorecard and for 30 points on the Qualifying Small Enterprise (QSE) Scorecard. The reason it is easy to score points is because there are three sub-elements and you can score points on each one of them. The three sub-elements are:

  • Preferential Procurement;
  • Supplier Development and
  • Enterprise Development.

Preferential Procurement will dictate who your suppliers are going to be in future - new stringent requirements around Preferential Procurement will force businesses to broaden their supplier database. Supplier Development will become very important because businesses are going to struggle with their Preferential Procurement and therefor they will need to develop Suppliers to fulfil their supply chain needs. Enterprise Development will become increasingly critical to feed the Supplier Development as well as the Preferential Procurement supply chain. 

But what is the difference between Supplier Development and Enterprise Development? Supplier Development is performed on your current supplier database whereas Enterprise Development is on suppliers that are not on your database as well as on start-up businesses or new entrants. With Supplier Development the business is already a supplier to your business as where with Enterprise Development the business wants to become part of your supply chain.

Remember that when you do either Supplier or Enterprise Development there are certain rules and regulations that need to be followed:

  • Supplier and Enterprise Development can only be done for 51% or more Black Owned Businesses;
  • These 51% or more Black Owned Businesses must have a turnover of less than R50 million per annum;
  • You cannot claim money spend on Supplier Development as money spend on Enterprise Development;
  • Supplier and Enterprise Development can only be done on existing businesses;
  • The spend on these two sub-elements must be quantifiable in a monetary value;
  • There must be a formal written agreement between your business and the recipient of Supplier or Enterprise Development;
  • The recipient must show its gratitude by means of a Letter of Appreciation.

Last but not least - you must remember that in order for your business to score full points for Supplier and Enterprise Development you will have to spend money on these two development criteria:

  • For Supplier Development you will have to spend 2% (1% QSE) of your nett profit after tax per annum and
  • For Enterprise Development you will have to spend 1% (1% QSE) of your nett profit after tax.

Our advice is to start planning now!

Visit our website www.how2tender.com. Learn to earn

Title Closing Date Tender No.
Supply and delivery of Mildsteel Galvanised Tee Bolts and Nuts at Withoogte 2017-11-29 12:00 6/5/2/321
Appointment Of A Service Provider For Meter Reading Services For The City Of Mbombela 2017-12-07 11:00 175/2017
Data Centre Maintenance and Repairs of Air Conditioning System 2017-12-07 11:00 RFP 129
Appointment of a service provider for assessment and valuation of the Legacy Rehabilitation liability cost 2017-12-08 11:00 ALEX RFP 4/2017/2018
Design, Provision and Management of a Wide Area Network for the Eden District Municipality 2017-12-08 11:00 E/04/17-18
Repair to Infrastructure in Tergniet – Stairs at Tidal Pool Kus Road 2017-12-08 12:00 49-17/18
Supply and delivery of tyres (one year contract). 2017-12-08 12:00 SCM/INFR13/2017/2018
Supply and Delivery of a Grader 2017-12-08 12:00 SCM/INFR12/2017/2018
Compilation of the 2017/2018 GRAP Compliant Financial Statements 2017-11-23 13:45 SCM/FS06/201/2018
Port Engineering - Smart Peoples Port Study 2017-12-12 12:00 PEH 135/VB
Port Engineering - Dredging of Small Craft Areas 2017-12-12 12:00 PEH 134/VB
Appointment of a suitable service provider for the training of 25 beneficiaries in basic bookeeping for a period of 12 months 2017-11-29 11:00 7Z - 35406
The construction of 50 sow piggery for Intandela multipurpose and project cooperative at Goodhome under Ntabamhlophe area in ward 14 of Inkosi Langalibalele Local Municipality under Uthukela District Municipality in the Kwazulu-Natal province 2017-12-14 11:00 SS-KZN 7/1/6/3 (642) 000R
Implementation of GRAP 12;16 and 17 assets register for a period of a period of three years 2018-01-02 12:00 SCM/FS05/2017/2018
Construction of Sewer Lines Tarka Mossel Bay 2018-01-12 12:00 45-17/18
Construction of the extension of Taung library 2018-01-02 12:00 SCM/SS06/2017/2018
Supply and delivery of Safety Clothing for the Langeberg Municipality, for the Period of 3 Consecutive Years 2017-12-08 12:00 T 32/2017
The Supply and delivery of 7 x Sealing End 132kv 400SQ CU of D2872 2018-01-23 13:00 DX 756
Supply, delivery and installation of Sewer Pumps Mandela Square Montagu 2017-12-01 12:00 TE 87/2017
Supply: Guard rail 2017-11-27 14:00 GE11800781

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Functionality and Tenders

In all competitive bids (tenders) you as the bidder will have to respond to Functionality. You will need to score a set minimum number of points, measured as a percentage, on Functionality of a competitive bid (tender) in order to advance to the next phase of evaluation in the tender process.

Usually Organs of State evaluate competitive bids (tenders) as follows:

  • The tender response is evaluated on Functionality where the bidder must score points out of a maximum of 100 points.
  • A threshold of between 65 to 75 out of 100 points... Read More
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