Q&A - Supplier Development points
At the BEE Chamber, we are here to support all BEE Practitioners with information and training relevant to their daily challenges and activities. To this end, we happily share the feedback to the following to all Associate members for everyone growth and information:
Question for a EME:
Is it correct that a company can buy one pack of highlighters from me that costs R49-00 and never have to buy anything else and then they continue with old suppliers ..... because the BEE verification agency tells them that all it takes is one invoice from a BEE supplier for them to get their full Supplier enterprise points.
Answer from the Technical Support Desk:
When considering the BEE Scorecard we have to be specific about which element we are dealing with. In this case you are referring to the Enterprise and Supplier Development element which includes Preferential Procurement, Supplier Development and Enterprise Development sub-elements.
Preferential Procurement is relatively simple. You buy a product or service from a supplier and you claim the rand spent with them against their BEE Recognition Level (i.e. Level 4 is 100% recognition).
Supplier Development refers to any support offered by a Measured Entity to a qualifying Supplier Development Beneficiary (SDB). To qualify as a SDB a company has to be an EME or QSE, hold a 51% Black Owned Status and be in the Measured Entities Total Measured Procurement Spend (TMPS). The amount claimable under Supplier Development is the contribution (i.e. Grant, loan, services) and not the amount of spend with that supplier.
Enterprise Development refers to any support offered by a Measured Entity to a qualifying Enterprise Development Beneficiary (EDB). To qualify as an EDB a company has to be an EME or QSE and hold a 51% Black Owned Status. In this case the company should not be a supplier to the Measured Entity but there are variances from Verification Agency to Verification Agency on whether a supplier could be an EDB.
With reference to your query, in order to qualify as a SDB, it requires a minimum of 1 invoice to fall under a Measured Entity’s TMPS (please note there are TMPS exclusions listed in Code 400). The amount spent and the number of other suppliers a Measured Entity elects to purchase from is up to them.
The intent of the B-BBEE Codes of Good Practice is to encourage and reward Measured Entities for contributing to economic growth. Such a contribution requires an understanding of the application of the Codes which sadly most company leaders have failed to achieve.
Where Measured Entities fail to understand the intent of B-BBEE and the potential positive impact they can have on economic growth in South Africa, South Africa loses the potential benefit it could have gained should that Measured Entity have made more impactful contributions. Additionally, such actions contribute to the view that BEE is failing which could lead to the loss of a very significant economic growth tool and continued high levels of poverty in South Africa.
If you have questions, kindly send them to email@example.com, and we will see how we can assist.