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

11. Measurement of Supplier Development Contributions
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11.1 A Measured Entity receives a score for the ‘Supplier Development Contributions’ indicator in proportion to the extent that it meets the compliance Target for indicator 2.3.1 of the Supplier Development Contributions scorecard.

 

11.2 The compliance Target of 3% of NPAT for indicator 2.3.1 of the Supplier Development Contributions scorecard is based on the average NPAT of the Measured Entity over the three financial years that precedes the Measurement Period and will be the basis for determining the Targets unless:
11.2.1 The Measured Entity did not make a profit on average over this three year period; or
11.2.2 The average net profit margin of the Measured Entity over this three year period was less than a third of the industry norm net profit margin during the same three year period.

 

11.3 Notwithstanding the fact that only contributions that became payable within the Measurement Period will be recognised for inclusion in the Measured Entity’s Supplier Development claim, it is expressly stated for the avoidance of doubt, that the NPAT for the Measurement Period itself does not form part of the calculation of the Target as per 11.2 above.

 

11.4 Where, either of the factors in 11.2.1 to 11.2.2 are present then the Indicative NPAT of the Measured Entity for the three financial years that precedes the Measurement Period, will be the basis for determining the Targets.
11.4.1 The Indicative NPAT is the Revenue of the Measured Entity for the Measurement Period, multiplied by a third of the average industry norm net profit margin for the three financial years that precedes the Measurement Period
11.4.2 The industry norm net profit margin must be determined with reference to the quarterly statistics supplied by Stats SA or such other verifiable data that might be available for the applicable Construction Sector.

 

11.5 Where in 11.4.2 the industry norm net profit margin for the three financial years that precedes the Measurement Period yields a negative result then Qualifying Supplier Development Contributions of nominal value will earn the Measured Entity the full points under paragraphs 2.3.1. Provided that the nominal value shall not be less than 50% of the previous years target.In the case of a second measurement period which yields a negative result the nominal value will be 50% of the previous years nominal value this will continue for any subsequent periods of negative results.

 

11.6 Qualifying Supplier Development Contributions are measurable using Formula "A" in Annexe CSC400 (D) read together with Annexe CSC400 (B).