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.
Supply and Delivery of Dry Rations, Condiments, Pickles and Herbs and Spices to the Department of Defence (Cape Metropole Area) 2018-11-22 11:00 SPSC- B- 023- 2018
Supply and Delivery of Dry Rations, Baking goods, Essence, Pudding, Jelly and Sugar to the Department of Defence (Cape Metropole Area). 2018-11-22 11:00 SPSC- B- 022- 2018
Supply and Delivery of Dry Rations, Soups, Spreads and Preserves to the Department of Defence (Cape Metropole Area) 2018-11-22 11:00 SPSC- B- 021- 2018
Supply and Delivery of Dry Rations, Pasta, Rusks and Biscuits and Porridges and Cereals to the Department of Defence (Cape Metropole Area) 2018-11-22 11:00 SPSC- B- 020- 2018
Request for Proposal for a terminal Operator to Finance, Re-Commission, Operate and Maintenance of the Hfo Tank and the, Financing Design, Development, Construction, Operation, Maintenance and the Transfer of the Liquid Bulk Terminal for the Handling of Liquid Bulk Cargo at the Port of East London and Project Site for a period of 25 (Twenty Five) Years. 2018-11-01 10:00 TNPA 2017/01/013/CM
The Supply and Delivery of Dry Rations, pasta, rusks and biscuits, porridges and cereals to the Department of Defence (Oudshoorn area). 2018-09-27 11:00 SPSC- B- 119- 2017
The Supply and Delivery of Dry Rations, coffee, tea and cooking oil to the Department of Defence (Oudshoorn area). 2018-09-27 11:00 SPSC- B- 123- 2017
The Supply and Delivery of Dry Rations, juices, dried fruit & veg, canned fruit & veg, canned meat etc to the Department of Defence (Oudshoorn area). 2018-09-27 11:00 SPSC- B- 124- 2017
The Supply and Delivery of Dry Rations, condiments, pickles and herbs and spices etc to the Department of Defence (Oudshoorn area). 2018-09-27 12:00 SPSC- B- 122- 2017
The Supply and Delivery of Dry Rations, baking goods, essence, pudding, jelly and sugar to the Department of Defence (Oudshoorn area). 2018-09-27 11:00 SPSC- B- 121- 2017
Supply and Delivery of Dry Rations, soups, spreads and preserves to the Department of Defence (Oudshoorn area) 2018-09-27 11:00 SPSC- B- 120- 2017
Supply Beanies 2019-02-01 10:00 GA11800335
The CCMA is inviting bidders to tender for the maintenance, support and the enhancement of it’s Java based Case Management System with bug fixing, modification and documentation of the system for a period of three(3) years 2019-02-09 11:00 CCMA/ 2017/ 20- ICT
The CCMA is engaging in a tender process to identify a service provider/ vendor to provide and manage a stable enterprise VOIP solution with proactive monitoring for a period of three (3) years. 2019-02-09 11:00 CCMA/ 2017/ 24- ICT
The appointment of consultants to configure SAP Investigative Case Management (ICM) for a period of six (06) months 2019-01-19 11:00 GT/GPT/182/2017

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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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