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.
Department of Co-Operative Governance and Traditional Affairs: Umzinyathi District: Nquthu: Community Service Centre Infrastructure Rehabilitation Programme: Alterations and Refurbishment for Molefe Tac 2020-10-20 11:00 ZNTL 04222 W
Provision of Maintenance and Support for Cisco Prime Infrastructure for a period of two (2) years. 2020-10-09 11:00 RFB 2250- 2020
Construction of Mandlazi Primary School Early Childhood Development Centre In Harry Gwala District, KZN. 2020-10-12 12:00 CDC/ 462/ 20- T
Supply and install a Unified Communication solution including Project Management Services during the installation, end devices, formal training, and 3rd Level Support and Maintenance (Software and hardware assurance) for 5 years for the Department of Telecommunications and Postal Services (DTPS). 2020-10-09 11:00 RFB 2266/ 2020
Construction of Savela Primary School Early Childhood Development Centre In Harry Gwala District, Umzimkhu, KZN 2020-10-12 12:00 CDC/ 463/ 20- T
Department of Public works: Pretoria: Procurement of 2 -3 bedroomed fully furnished house with the minimum of 2 bathrooms for Cuban Technical Advisors for a period of 18 months in Pretoria East, Faerie Glen, Menlo Park, Waterkloof and Hatfield. 2020-10-12 11:00 H20/ 006PF
Construction of Straalhoek Primary School Early Childhood Development Centre In Harry Gwala District, UMZIMKHU, KZN. 2020-10-12 12:00 CDC/ 464/ 20- T
SAPS-Criminal Records and Crime Scene Management - Procurement of alternative office accommodation of 1 123.25 square meter and 20 parking bays for a period of 5 years in Pretoria North (CBD). 2020-10-12 11:00 H20/ 004PF
DCS: Sevontein Prison: 36 Months Term Contract: Preventative and Maintenance of Water Treatment Plant It is estimated that tenderers should have CIDB contractor grading designation of 3ME or 3CE or Higher. 2020-10-27 11:00 DBN20/ 09/ 01
Construction Of Early Chilhood Development Classrooms (ECDC) At Luzindela Primary School In King Cetshwayo District, KZN 2020-10-12 12:00 CDC/ 465/ 20- T
DCS: Mthunzini Prison: 36 Months Term Contract: Preventative and Maintenance of Sewage Treatment Plant It is estimated that tenderers should have CIDB contractor grading designation of 3ME or 3CE or Higher. 2020-10-29 11:00 DBN20/ 09/ 03
DCS: Sevontein Prison: 36 Months Term Contract: Preventative and Maintenance of Sewage Treatment Plant It is estimated that tenderers should have CIDB contractor grading designation of 3ME or 3CE or Higher. 2020-10-28 11:00 DBN20/ 09/ 02
DCS: Qalakabusha Prison: 36 Months Term Contract: Preventative and Maintenance of Sewage Treatment Plant. It is estimated that tenderers should have CIDB contractor grading designation of 3ME or 3CE or Higher. 2020-11-05 11:00 DBN20/ 09/ 06
The South African Civil Aviation Authority (SACAA), in its quest to strengthen its brand presence on social media platforms wishes to contract a solid and effective social media and marketing company to develop a social media management strategy and implementation thereof. 2020-10-09 11:00 Q66433345
DCS: Waterval Prison: 36 Months Term Contract: Preventative and Maintenance of Piggery Sewage Treatment Plant and Bulk Water Supply Pump Station. 2020-11-10 11:00 DBN20/ 09/ 07
DCS: Ncome Prison: 36 Months Term Contract: Preventative and Maintenance of Water Treatment Plant It is estimated that tenderers should have CIDB contractor grading designation of 3ME or 3CE or Higher. 2020-11-03 11:00 DBN20/ 09/ 04
Appointment of a Training Provider For Life Orientation Teachers Workshops Over Three Years 2020-10-05 11:00 BS/ 2019/ RFB428
Appointment of a Service Provider Who Is MICT Seta Accredited to Deliver and Implement an NQF Level 4 Film and Television Production Operations Qualification as a Learnership Programme for 30 KwaZulu-Natal Youth Per Annum for a Period of Three Years Which Will Capacitate Them With The Relevant Film and TV Skills 2020-09-28 11:00 KZNFC- T06A/ 2020/ 21
Establishment of a Government Technical Advisory Centre (GTAC) Panel of Professional Service Providers for a Period of Three (3) Years – Batch 4 2020-10-02 11:00 GTAC 015- 2020- 21
For The Identification of Accredited Training Providers to Facilitate The Design and Delivery of a Training Programme on The Mfma Regulated Minimum Competency Levels For Approximately 100 National and Provincial Treasury Officials on Identified Unit Standards 2020-09-25 11:00 GTAC 014- 2020- 21

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