Eskom Procurement Book 2015

SUPPLIER RELATIONSHIP MANAGEMENT

The following are the prime objectives of the BBSDP scheme [21]:

• Fast-tracking existing Small, Medium and Micro Enterprises (SMMEs) that show good potential for growth into the mainstream economy. • Growing black-owned enterprises by fostering links between black SMMEs and corporate and public sector enterprises. • Complementing the current affirmative procurement and outsourcing initiatives of corporate and public sector enterprises. • Enhancing the capacity of grant recipient enterprises to successfully compete for corporate and public sector tenders and outsourcing opportunities. BBSDP is meant to assist small enterprises to improve their competitiveness and sustainability so that they can become part of the mainstream economy for the purpose of creating employment in the country. This is achieved through the provision of financial assistance in the form of grants that are worth up to R1 million. Some of the provisions are as follows: • Funds may be granted for the acquisition of tools, machinery and equipment per each eligible enterprise. Businesses need these non-human resources for their production processes. The scheme is therefore meant to ensure that targeted businesses are well equipped to make meaningful contributions to the economy by boosting their production capacities. • Funds may be granted for business development and training purposes per eligible enterprise. The money may be directed towards the improvement of corporate governance procedures, management, marketing, productivity and the use of modern technology. This is premised on the fact that it is widely acknowledged that businesses can only succeed when their employees are well equipped with the necessary knowledge and skill in these critical areas. In order to be eligible for a grant, applying enterprises have to meet the following criteria: • Black majority shareholding of at least 51%. This is in line with the BBBEE initiatives that are meant to promote the development of the country by recognising the needs of previously marginalised groups. This will ensure that all groups will be able to make positive economic contributions to the country. • Fifty percent of management positions should be held by historically disadvantaged individuals. The scheme is meant to assist businesses whose management structure reflects the desire to address the historical imbalances in the country. Therefore, to qualify for the scheme businesses are encouraged to factor in a majority black management. • Annual turnover of the enterprise should be between R500 000 and R35 million. The required turnover aims at ensuring that only serious enterprises that have a bright future receive the grants from the scheme. • The business should be in operation for at least one year. This eliminates the prospect of giving the funds to fly-by-night businesses that have been started to obtain the grant, but do not exist in reality. • Proof of payment of VAT, indicating that the business has been registered and

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