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.
Renewal of Veeam Backup and Replication 2 year subscription 2018-10-12 12:00 T28/2018
Test of Compressors as per Health and Safety Act,1993 in Langeberg Municipal Area 2018-09-21 10:15 Q 35/2018
Appointment of Civil Maintenance Contractor for a period of three years. 2018-10-18 12:00 BFN 15/2018
Training: New Venture Creation 2018-09-26 11:00 7G‐37538
Supply & Delivery of 200 Microns, 340 X 280 X 6200mm, 50 Lt, Black Plastic Planting Bags. 2018-09-26 11:00 GQ09181946
Supply & Delivery of 120 Microns, 225 X 200 x 475mm, 20 Lt, Black Plastic Planting Bags 2018-09-26 11:00 GQ09181946
Supply & Delivery o TS 410 Sthil Grinder 2018-09-26 11:00 GQ09181945
Supply delivery and installation of office furniture on as and when required basis for Department of Finance for a period of six (6) months. 2018-10-05 11:00 NWDF03/2018
Appointment of a contractor for the construction of Lemoendraai subsoil drainage under Dawid Kruiper Local Municipality, ZF Mgcawu District Municipality in the Northern Cape province. 2018-10-05 11:00 5/2/2/1 NC CON 0004 (2018/2019)
Supply & Delivery of Expert Mig 250 Multi Function Welder or Approved Equivalent, Including Mb25 Mig Torch 4m or 5m, Flowmeter, Bullnose Nut and Stem, Trolley, Pvc Hose, Plug, and 2 X Hose Clamps 2018-09-26 11:00 GQ09181943
Appointment of a service provider to provide media monitoring services. 2018-10-05 10:00 REQ00468
Cool Coating Kheis Marketing Intelligence Company. 2018-10-08 11:00 487
The MBDA, as the promoters of the competition for the Nelson Mandela Bay Iconic Landmark Precinct, invite eligible persons or organizations to bid for the development of a Comprehensive Business Plan for the Nelson Mandela Bay Iconic Landmark Precinct 2018-09-27 11:00 BDA0918621
Supply, Delivery and Installation of Magicard Card printing machine. 2018-10-09 11:00 iThemba LABS - M2018/19:94
Supply & Delivery of 10 X 200 Lt Drums Ss60 Bitumen Emulsion. (Anionic Stable Grade) 2018-09-26 11:00 GQ09181942
The Department of Public Works and infrastructure hereby invites bids from suitably qualified suppliers to supply and deliver cleaning material to the department for a period of three (3) years. 2018-10-12 11:00 DPWFS (T) 007/2018
Supply & Delivery of 13 mm Stone 2018-09-26 11:00 GQ09181941
Supply & Delivery of Concrete Sand 2018-09-26 11:00 GQ09181941
Appointment of a Civil Maintenance Contractor for a period of three years. 2018-10-17 12:00 ELS 22/2018
Supply & Delivery of Bedding Sand 2018-09-26 11:00 GQ09181941

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Advantages and disadvantages of Consortiums

Consortiums are often considered as entities to use when responding to tenders in South Africa. The question that arises is whether to use a Consortium or a Joint Venture when responding to a tender. To help you with this we have compiled a list of advantages and disadvantages for both Consortiums as well as Joint Ventures. In this article we list the advantages and disadvantages of Consortiums. Look out for the same article on Joint Ventures.

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