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!

Visit our website www.how2tender.com. Learn to earn

Title Closing Date Tender No.
Appointment of a Panel to Supply ICT Hardware 2018-07-12 12:00 RFP006/ 2018
Service Theatre Table X 01 2018-06-29 11:00 ZNQ: 8975/ 18 NIEM
Service dental chair at Niemeyer Hospital X 01 KwaZulu-Natal. 2018-06-29 11:00 ZNQ: 8971/ 18 NIEM
C993.02: Reseal of TR75/1 (KM 0.00 to KM 16.50) Holgaten to Oudtshoorn. Designated CIDB Grading: 8CE or higher 2018-07-26 11:00 S048/ 18
Procurement of Human Resource Recruitment & Selection Service (x3) 2018-07-12 12:00 RFP004/ 2018
Inspection, maintenance & repair of the department fleet. 2018-08-19 11:00 ZNB468/ 15T
Supply, Installation and Maintenance of Multi functional Photo Copiers 2018-07-12 12:00 RFP008/ 2018
Appointment of a property management company or an agent to source office accommodation for USAASA for a period of five years in Gauteng. 2018-07-17 11:00 USAASA- OFS/ 04/ 2018
Provision of Legal Services 2018-07-23 11:00 EWSETA008/ 2018
Request for bid for renovation services for the National Health Laboratory Service at Bongani Provincial Hospital, Welkom. 2018-07-16 11:00 RFB 022/ 18/ 19
Terms of Reference for the maintenance of Security Operational Centre for GDED 2018-07-13 11:00 GT/ GDED/ 089/ 2018
Department of Health: RK Khan: Repairs and waterproofing of flat roof over physiotherapy department (contract period: 6 calendar Months). 2018-07-20 11:00 ZNTD 03917W/ WIMS 063046
Department of Public Works: Ethekwini Regional Office-Mayville: Tender Office relocation 2018-07-23 11:00 ZNTD 04435W
Appointment of a service provider to render cleaning and hygiene services for the Department of Rural Development and Land Reform - Mpumalanga Deeds Registry for a period of 24 months. 2018-07-16 11:00 DRDLR (CRD- 10) 2018/ 19
Annual service of Theatre UPS. 2018-07-02 11:00 C23/ 18/ 19
Supply , Installation and Commissioning of Bio-metric system 2018-07-24 11:00 EEC/ T06/ 2018
Appointment of Consultants/Professional Services for designing of plans for the following campuses: 1. Brakpan Campus-classrooms and offices. 2.Springs Campus-classrooms, offices and Hospitality kitchen 2018-07-24 11:00 EEC/ T10/ 2018
Appointment of Service provides to supply, deliver and offload Fertilizer for supplementing. 2018-06-28 11:00 ZNB 4261/ 18A
Appointment of a service provider for the revision of the HDA Business case, organisational design and resourcing framework. 2018-07-16 11:00 HDA/ JHB/ 2018/ 001
Appointment of Consultant/Professional Services for designing of 7 Main Entrances at College delivery sites 2018-07-24 11:00 EEC/ T09/ 2018

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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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