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!

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Title Closing Date Tender No.
Construction of Nongiqa Low Level Bridge Crossing. 2018-04-20 12:00 ULM-INFR-033/18
Appointment of a Panel of Maximum 4 (Four) Contractors for the Replacement and Cut Over of Asbestos Cement Pipes to Pvc Pipes In Steve Tshwete Local Municipality Area for a period of 36 months as and when required 2018-04-25 12:00 BS07/03/2018
The Supply and Delivery of Wet Rations, various dairy products to the Department of Defence (Port Elizabeth area). 2018-08-16 11:00 SPSC- B- 105- 2017
10 Units, Pre filled surgical adhesive syringe size 5ml 2018-04-02 11:00 ZNQ: 1181/ 17/ 18
Provision of Professional Services in Respect of the Management of the City of Cape Town Railway to Comply with the Requirements of eh National Railway Safety. 2018-04-23 10:00 270C/2017/18
10 Units, Non absorbable monofilament cv-7 size 46cm-18 in 9mm needle 2018-04-02 11:00 ZNQ: 1183/ 17/ 18
Provision of a Service Provider: Accredited Training Related to Project Management and Contract Administration. 2018-04-23 10:00 271C/2017/18
The appointment of a service provider for the supply and delivery of perfusion and cardiothoracic surgery requirements to Groote Schuur-, Tygerberg- and Red Cross War Memorial Children’s Hospital for a period of three (3) years. 2018-04-13 11:00 TBH 514/ 2017
Supply and delivery of 5-tons (5000kg) diesel forklifts for vehicles to South African Police Service for a period of two (2) years, Nationally. 2018-04-24 11:00 19/1/9/1/75TV (17)
Appointment of a capable service provider to render services in respect of travel, transport and accommodation arrangements for the Department of Sport and Recreation South Africa for a period of 36 months. 2018-04-23 11:00 SRSA009/ 2017- 18
A Panel of Service Providers For Plumbing Services: Maintenance & Service of Plumbing Infrastructure at Municipal Buildings and Facilities of Steve Tshwete Local Municpality for a period of three (3) years 2018-04-19 12:00 BS02/03/2018
Supply and delivery of 5 tons (5000kg) diesel forklifts for vehicle safeguarding services to South African Police Service for a period of two (2) years, nationally. 2018-04-24 11:00 19/ 1/ 9/ 1/ 75 TV (17)
Tenders are hereby invited for Short-term Insurance Broker Services for the period 1 July 2018 to 30 June 2021. 2018-04-24 11:00 T 2018/001
Provision of Automated Culture Media Preparatory for NICD, to National Health Laboratory Services (NHLS), for a period of three years 2018-04-23 11:00 RFB075/ 17- 18
Supply,Deliver and Install air-conditioner (24 Months Contract). 2018-04-26 12:00 ULM-CORP008/18
Re-Advertisement: Provision and Fitting of 500m X 2.1m anti Climb, Antivandal, anti Cut High Security Welded Wire Mesh Fence at Steve Tshwete Municipal Service Centre, Middelburg 2018-04-10 12:00 BS08/03/2018
Repairs and Maintenance Services of Access Control, CCTV System and Electric Fence, to National Health and Laboratory Services (NHLS), Nationally for a period of three (03) years. 2018-04-24 11:00 RFB091/ 17- 18
Two (02) tractor: four wheel drive: 151 - 180kw. 2018-04-24 11:00 S009/ 18
One (01) tractor: crawler: 24 - 26t class 6. 2018-04-24 11:00 S008/ 18
Appointment of service providers to remove household garden refuse in the Mossel Bay Municipal area. 2018-04-26 12:00 TENDER 94-17/18


Tender adjudication process

The SBD/WCBD6.1 document must form part of all bids invited.  It contains general information and serves as a claim form for preference points for Broad -Based Black Economic Empowerment (B -BBEE) Status Level of Contribution, and explains how tenders or bids are decided.

The document says:

  • The bidder obtaining the highest number of points will be awarded the contract.
  • Preference points shall be calculated after prices have been brought to a comparative basis.
  • Points scored will be rounded off to two decimal places... Read More
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