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.
Appointment of a QCTO registered Qualification Development Facilitators (QDF) for the reviewing of the occupational qualification Insurance Administration: Claims Assessor NQF Level 4 (99668). 2020-03-02 11:00 RFQ/2020/24
Request for Proposals for the Establishment of Panel of Service Providers for the Learning and Development Content Design and Development Services 2020-03-24 12:00 COR6355/2020/RFP
Appointment of architecture as principal agent for the repair and reinstatement of SABC Studio 6 building structure for period of two years. 2020-03-24 12:00 RFP/LOG/2020/4
The provision of armed guarding security services at Pilansberg Nature Reserve 2020-03-18 11:00 NWPB/RFT/PNPSEC/020/2020
Physical Security Improvement Beitbridge POP 2020-03-11 12:00 RFQ 6547
Rehabilitation, renovation and refurbishment of Inkululeko Yesizwe Primary School 2020-03-20 11:00 DID30/ 02/ 2020
Demolish and construction of the Dr. W.K Du-Plessis LSEN School 2020-03-23 11:00 DID31/ 02/ 2020
Refurbishment of Learskool Frikkie Meyer 2020-03-19 11:00 DID32/ 02/ 2020
Siloam hospital - Construction of new district hospital 2020-03-27 11:00 NDOHF 12/ 2019- 2020
Re-building of burnt down storage shelter for farm material 2020-03-21 11:00 ARC/ 14/ 09/ 19 (Re- advertise)
Bid for the Appointment of a Service Provider for the Provision of Cloud Hosting Platform to host The Department Of Employment and Labour`S Sap S4 Hana Roadmap Landscape and Support for the period of thirty six (36)months 2020-03-20 11:00 BID LAB 10/ 2019
Appointment of a Security Company to Provide Security in Kimberley for a period of 3 years 2020-03-13 11:00 DEDaT 0007/ 2019
The RAF hereby invites experienced and suitable service provider to provide Fleet Management for the Road Accident Fund for a period of five (5) years. 2020-03-13 11:00 RAF/ 2020/ 00003
Appointment of a Service Provider for the Karoo Walking Trails Signage and Mapping 2020-03-13 11:00 DEDaT 0005/ 2019
Appointment of a Service Provider to Develop The Mountain Bike Trails For Mcgregor Musuem in the Northern Cape 2020-03-13 11:00 DEDaT 0006/ 2019
Provision of Open Source Learner Management Service for a period of 36 Months 2020-03-06 11:00 NEMISA/ 2019/ LMSRFB010
The Appointment of a service provider to conduct a feasibility study towards the development of a monumental flag and flag pole. 2020-03-13 11:00 DAC 14/ 19- 20
Appointment of service provider to supply and deliver 5 ton truck for Clanso Farmer Production Support Unit (FPSU) located in ward 18,24,27, and 28 in the Umhlathuze Local Municipality within King Cetshwayo District Municipality in the province of Kwazulu-Natal 2020-03-12 11:00 SS- KZN 7/ 1/ 6/ 3 (753) 3T
Appointment of an HR consultancy firm to provide support to the CETA Administrator 2020-03-06 11:00 016- 2019/ 2020
Procurement of alternative accommodation for the Department of Public Enterprises (lettable office space of 12 144.34sqm and 228 parking bays for a period of 5 years) in Pretoria CBD, Arcadia, Hatfield 2020-03-13 11:00 H19/ 015PF

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