Issue Date: 
Thursday, October 31, 2019

The difference between Supplier and Enterprise Development

By Werner van Rooyen, Director of HowToTender (Pty) Ltd which specializes in tender consulting and tender training.

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 voluntary, it is going to become difficult to avoid if your business is mainstream, does not matter 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 especially 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 done on your current supplier database whereas Enterprise Development is done 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.

Finally – you must remember that 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!

To learn more about this and many other tender conditions attend our “Become a Tender Expert” 2-Day workshops presented in Johannesburg, Pretoria, Durban, Port Elizabeth, and Cape Town.  Book and pay online at https://howtotender.co.za/tender-expert-form/

Contact us at wernervr@howtotender.co.za should you require more information.

You can also purchase a Tender Manual (Handbook) on our website https://howtotender.co.za/ which is a step by step guide how to respond to a South African Tender.  It includes examples of completed SBD forms.

Title Closing Date Tender No.
Provision of cleaning, hygiene and pest control services at GPAA offices 2020-06-22 11:00 GPAA 10/ 2020
Appointment of a security company to provide security services, Alarm installation with armed response in Bredasdorp, Anene Booysen Skills Development Centre 2020-06-19 11:00 002- 2020/ 2021
Appointment of a security company to provide security services, Alarm installation with armed response in Bethal, Gert Sibande Skills Development Centre 2020-06-19 11:00 004- 2020/ 2021
Appointment of a security company to provide security services, Alarm installation with armed response in Muden, Zibambeleni Skills Development Centre 2020-06-19 11:00 003- 2020/ 2021
Appointment of a panel of service providers for the procurement of the 32 inch IDTV for 2020 indegent matriculants 2020-06-19 11:00 USAF- IDTV/ 01/ 2020
Dube TradePort Corporation hereby invites proposals from Trend Micro accredited partners to provide Trend Micro Enterprise Protection Platform (EPP) for DTPC for a three (3) year period. 2020-06-23 11:00 DTP/ RFP/ 13/ CEO/ 09/ 2019
Supply, delivery, and installation, inclusive of setup of production scanners: 3 year period contract, various head offices 2020-06-17 11:00 ZNB 5336/ 2020- H
Provision of Security Services in the Departmental Offices and Institutions for a period of 36 months at CLUSTER 5 (King Cetshwayo District Offices) 2020-06-18 11:00 DARD05/ 20
Provision of Security Services in the Departmental Offices and Institutions for a period of 36 months at CLUSTER 4 (UMkhanyakude District offices) 2020-06-18 11:00 DARD04/ 20
Provision of Security Services in the Departmental Offices for a period of 36 months at CLUSTER 3 (ILembe District, UGu and UThukela District offices) 2020-06-18 11:00 DARD03/ 20
Provision of Security Services in the Departmental Offices for a period of 36 months at CLUSTER 2 (Zululand and Harry Gwala District Offices) 2020-06-18 11:00 DARD02/ 20
Provision of security services in the Departmental Offices, Institution and Residence for the period of 36 months at CLUSTER 1 (MEC Residence, UMgungundlovu District, Truro house, EThekwini District, Amajuba District and UMzinyathi District) 2020-06-18 11:00 DARD01/ 20A
Supply, deliver, offload, install and servicing of ablution and hygiene services for departmental offices, research stations and institutions for the period of three years 2020-06-19 11:00 DARD08/ 20A
Appointment of a service provider to rehabilitate the pumps at Makhathini Irrigation Scheme 2020-06-19 11:00 DARD07/ 20A
Supply, deliver and offloading of veterinary remedies at Department of Agriculture: Uthukela District Office. 2020-06-19 11:00 DARD06/ 20A
Printing, supply and delivery of promotional material for the South African Police Service: Division: Corporate Communication and Liaison on a once off basis 2020-06-30 11:00 19/ 1/ 9/ 1/ 65TS(19)
Supply and delivery of consumables used in the forensic science laboratories to the SAPS for a period of two (2) years 2020-06-18 11:00 19/ 1/ 9/ 1/ 69TD (19)
Implementation of Biogas and required associated training for DOD 2020-06-19 11:00 128
Supply, delivery, installation, commissioning, end-user training, of 21 x ICU beds: Dr Pixley Ka Seme Memorial Hospital: once-off 2020-06-17 11:00 ZNB 9768/ 2019- H
Request for proposal: Establishment of a frame agreement for provision of cafeteria and catering services at UNHCR RBSA Pretoria office 2020-07-02 16:00 RFP/020/HCR/RBSA/SUP/014.

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