B-BBEE Draft Codes of Good Practice – Summary of amendments for Draft Statement 400 – THE GENERAL PRINCIPLES FOR MEASURING ENTERPRISE AND SUPPLIER DEVELOPMENT

This is a second article summarising draft amendments for the DTIC’s B-BBEE Draft Codes of Good Practice. Refer to the previous article titled “B-BBEE Draft Codes of Good Practice and public commentary for draft statements – 29 January 2026 updates” for the initial detail.

The full draft version of Statement 400 can be accessed on the DTIC’s website with this link: https://www.thedtic.gov.za/wp-content/uploads/DraftStatement400of2026.pdf

DRAFT STATEMENT 400: THE GENERAL PRINCIPLES FOR MEASURING ENTERPRISE AND SUPPLIER DEVELOPMENT

Items marked with “***” are additions or amendments.

OBJECTIVES OF THIS STATEMENT

1. Specify the scorecard for measuring Enterprise and Supplier Development;
2. Specify the key measurement principles applicable to calculating Preferential Procurement contributions, Qualifying Enterprise Development, [and] Supplier Development and Transformation Fund Contributions;
3. Define the principles applicable when calculating B-BBEE Procurement Spend, [and] Enterprise Development, [and] Supplier Development Spend and Transformation Fund; and
4. Indicate the formula for calculating the individual criteria specified in the Enterprise and Supplier Development scorecard.

KEY MEASUREMENT PRINCIPLES

The Enterprise and Supplier Development consist of,

1. Preferential Procurement;
2. Enterprise Development [and]***
3. Supplier Development, or
4. Transformation Fund.

Enterprise Development [and] Supplier Development or Transformation Fund Contributions will be recognised as a percentage of annual Net Profit After Tax (NPAT).

The Net Profit After Tax (NPAT) or average target applies unless:

1. The company did not make a profit last year or on average over the last five years.
2. The net profit margin is less than a quarter of the norm in the industry.
3. If the turnover is to be used, the target will be set at:

3.11% (ED) or 2% (SD) x Indicative Profit Margin (NPAT/Turnover) x Turnover.

4. A measured entity has a choice of compliance with the 3% NPAT through implementation of both Enterprise Development and Supplier Development (2.3) indicators or by only contributing to the Transformation Fund using NPAT.
5. A measured entity has a choice of compliance with either Enterprise Development and Supplier Development or the Transformation Fund.
6. Points scored under 5 above will be in proportion to the spending for each of the indicators.

SUB-MINIMUM AND DISCOUNTING PRINCIPLE

1. A measured entity must achieve a minimum of 40% of each of the amended total weighting points as defined in the Preferential Procurement tables of the scorecard.
2. Non-compliance with one or more of the threshold targets as per paragraph 3.1 will result in the overall achieved B-BBEE status level being discounted in accordance with paragraph 3.4 in statement 000.

Furthermore,

7. Beneficiaries of Supplier Development or Enterprise Development are EMEs or QSEs which are at least 51% Black-owned or at least 51% Black-women-owned utilising the [f] Flow [t] Through [p] Principle. However, in terms of Generic Entities, this is based on the provision that at the first instance of receiving assistance from the Measured Entity, it was identified that such suppliers were EMEs or QSEs. This recognition to Generic Entities will only be allowed for 5 years from the first time of receiving assistance from the Measured Entity…
8. B-BBEE Procurement Spend from Generic Entity Suppliers, which are at least 51% Black Owned or at least 51% Black Women Owned utilizing the [f] Flow [t] Through [p], Principle can be recognised under Point Indicator 2.1.2 and 2.1.3 of the Enterprise and Supplier Development Scorecard. However, this is based on the provision that at the first instance of procuring goods and services, it was identified that such suppliers were EMEs or QSEs. This recognition for Generic Entities under Point Indicator 2.1.2 and 2.1.3 will only be allowed for 5 years from the first time of procuring goods and services from such suppliers.

GENERAL PRINCIPLES

Quoting from the Gazette:

4.5 To support procurement from Black-owned and ***[b] Black women-owned businesses in order to increase the participation of these businesses in the mainstream economy.

4.15 Measured Entities who select to comply with Enterprise Development and Supplier Development as well as those partnering with the Transformation Fund are required to submit a needs analysis, a performance metric (with outputs and outcomes such as turnover growth, job growth, increased access to local and international markets, increase in profitability, greater innovation), and an annual Monitoring and Evaluation report (to B-BBEE authorities, inclusive of the Verification Agency) to verify their contributions and impact on the beneficiaries to ensure compliance with the ESD objectives.

ENTERPRISE DEVELOPMENT and SUPPLIER DEVELOPMENT CONTRIBUTIONS

9.1.22 ***[P]payments made by the Measured Entity to suitably qualified and experienced **[third parties] Third Party Facilitators* to perform Enterprise Development and Supplier Development on the Measured Entity’s behalf.

MEASUREMENT OF ENTERPRISE DEVELOPMENT, SUPPLIER DEVELOPMENT, OR TRANSFORMATION FUND CONTRIBUTIONS

11.1 A measured entity receives a score for Enterprise Development, [and] Supplier Development, OR Transformation Fund in proportion to the extent that it meets the compliance target.
11.2 Qualifying Contributions for Enterprise Development, Supplier Development, OR Transformation Fund are measurable using the formula “A” in Annexe 400(B).

The full draft version of Statement 400 can be accessed on the DTIC’s website with this link (copy and paste into your browser): https://www.thedtic.gov.za/wp-content/uploads/DraftStatement400of2026.pdf