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Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003)

Amended Codes of Good Practice (2017)

Amended Code Series CSC400: Measurement of the Preferential Procurement and Supplier Development Element of Broad-Based Black Economic Empowerment in the Construction Sector

Statement CSC400: The General Principles for Measuring Preferential Procurement and Supplier Development

9. Supplier Development Programmes

 

9.1 A Supplier Development Programme is a programme whereby the Measured Entity provides structured co-operation and assistance to Qualifying Beneficiary Entities in the form of Qualifying Supplier Development Contributions.

 

9.2 For the Supplier Development Programme to earn the Measured Entity any recognition under paragraph 2.2 of the scorecard as calculated in terms of Annexe CSC400 (C), the programme must comply with the following additional criteria:
9.2.1 With respect to the Qualifying Beneficiary Entity:
9.2.1.1. The Measured Entity may not hold more than 20%, calculated in terms of the normal flow-through principle, of the the Qualifying Beneficiary Entity’s equity;
9.2.1.2 The Qualifying Beneficiary Entity must employ a minimum of three permanent employees;
9.2.1.3 The Qualifying Beneficiary Entity must be in possession of a valid tax clearance certificate;
9.2.1.4 The Qualifying Beneficiary Entity must be in possession of a sworn affidavit (where applicable), or B-BBEE certificate that was valid at the date of entering into the agreement in 9.2.2 below :
9.2.2 The programme must be evidenced by the following:
9.2.2.1 A written agreement signed by the Measured Entity and the Qualifying Beneficiary Entity;
9.2.2.2 A documented “needs analysis” of the Qualifying Beneficiary Entity signed by both the Measured Entity and the Qualifying Beneficiary Entity;
9.2.2.3 A documented ‘Supplier Development Plan’ signed by both the Measured Entity and the Qualifying Beneficiary Entity, which must contain with reference to the Measurement Period:
9.2.2.3.1 Clear objectives with respect to the development of at least three needs as identified per the “needs analysis” (see paragraph 9.2.2.2)        from at least two areas that were identified for development. For avoidance of doubt, a developmental need is a specific requirement to be implemented under a development area, and this specific need requires defined objectives. The areas that may be targeted for development are not limited but could include:
9.2.2.3.1.1 Management and labour skills transfer;
9.2.2.3.1.2 Establishment of an administrative system;
9.2.2.3.1.3 Planning, tendering and programming skills transfer;
9.2.2.3.1.4 Business skills transfer with an emphasis on negotiation skills;
9.2.2.3.1.5 Technical skills transfer with emphasis on innovation;
9.2.2.3.1.6 Legal compliance;
9.2.2.3.1.7 Procurement skills transfer;
9.2.2.3.1.8 Establishment of credit rating and/or history;
9.2.2.3.1.9 Establishment of financial loan capacity and/or history;
9.2.2.3.1.10 Contractual knowledge transfer
9.2.2.3.1.11 Marketing and branding;
9.2.2.3.1.12 Access to or implementation of business systems;
9.2.2.3.2 Priority interventions (activities) to address the objectives  identified in 9.2.2.3.1 above.
9.2.2.3.3 Qualifying Supplier Development Contributions and the value thereof allocated. If none of the allocated contributions become payable within the Measurement Period, this requirement has not been met.

 

9.2.3 An ESD champion that will be accountable and responsible for the ‘Supplier Development Programme’ must be appointed at Senior Management or higher level in the Measured Entity. He/she must be suitably qualified and experienced to monitor progress and complete a portfolio of evidence for verification.

 

9.3 A Measured Entity receives a score for the ‘Supplier Development Programme’ as determined with reference to Annexe CSC400(C).