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, doesn't 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 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 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.

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! 

If you want to learn more about this and what the rest of the Amended Codes entails you can visit our website www.how2tender.com or contact us.
 

Title Closing Date Tender No.
Supply, Delivery, Installation & Commission of Three Headlight Aim Testers for Vehicle Test Station for Traffic Services 2018-12-24 12:00 RFQ/HPS/2018-19/291
Provision of Driver Education (Learner and Driving Licence) 50 Persons in Ward 38 2018-12-24 12:00 RFQ/IDP/2018-19/290
Supply & Delivery of Electrical Inventory Items 2019-01-11 12:00 SCM/2019/94/ENG
Provision of Driver Education (Learner and Driving Licence) 50 Persons in Ward 08 2018-12-24 12:00 RFQ/IDP/2018-19/289
Appointment of construction of a small administration block, 2 x grade R classrooms, guard house, erection of fence, completion of the multi- purpose classroom, nutrition centre, 2 x 3 classroom blocks, conversion of 1 x 3 classroom block into hall and external works at Leboeng Primary School located in Leboeng Village in Sekhukhune District, Limpopo Province grade 7 GB and Above 2019-01-30 12:00 EDDP 184/57B
Advanced Firearm Training Programme 2018-12-28 12:00 RFQ/DHR/2018-19/297
Updating and Maintenance of BCMM`s Water Hydraulic Models and Water Demand Analysis in IMQS - Inland 2018-12-28 12:00 RFQ/DES/2018-19/296
Procurement of Professional Service Providers from the Built Environment that specializes in Architecture, Quantity Surveyors, Civil & Structural Engineers, Electrical Engineers and OHS Agents For The Planning, Design, Supervision and Closure of the Programme 9 Schools for the Limpopo Department of Education 2019-01-28 09:00 LDOE/66PSP/2018/1
Thermocycler 2018-12-21 11:00 RFQ GAU86
Jagerust Water Treatment Plant Refurbishment 2019-02-28 10:00 E/BS3691R
Supply of parts, spares and repairs of Teledyne make of ambient air quality monitoring gas analyser for lab and site network 2019-03-08 10:00 CORP 4655
Supply and delivery of electrical material and equipment for Nkomazi LM for a period of three (3) years 2019-01-31 12:00 NKO 90/2018
Provision of a functional and technical support service for Ellipse and associated bespoke systems implemented at eThekwini Electricity 2019-02-15 11:00 E.9646
Online coal quality measurement staithes incline conveyors 2019-02-12 10:00 MPGXC005157R
The maintenance and repair of portable earthing gear in Mpumalanga Operating Unit on an as and when required basis 2019-02-12 10:00 MPDX001033
Appointment of a service provider to compile a waste characterization report - Solid Waste Management 2018-12-28 11:00 FQ/SM: 97/19
To design, manufacture, supply, delivery, removal, installation and commissioning of 2 (two) spare LP heaters (1 x LPH 3 and 1 x LPH 4) for a period of 5 years 2019-02-13 10:00 MPGXC005426
Supply, delivery and installation of 2 x automated multi-deck weighbridges at Tutuka Power Station 2019-02-13 10:00 MPGXC005428
Supply and delivery of one (1) Landfill Compactor 2019-01-18 12:00 IHLM-78/12/2018-19/COMM
Provision of Short Term Insurance for the period from 01 July 2019 To 30 June 2022 2019-01-18 12:00 FIN 01/2019/20

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