B-BBEE Preferential Procurement Explained
By Leon Beyleveld, ProcureWise Consulting · 28 October 2026 · 6 min read
Who you buy from directly affects your B-BBEE level. Preferential procurement measures how much of your spend goes to empowering suppliers — and it is one of the areas where good procurement practice makes the biggest difference to a scorecard.
What is preferential procurement?
Preferential procurement is part of the Enterprise and Supplier Development (ESD) element of the B-BBEE Codes of Good Practice. It measures your B-BBEE procurement spend as a proportion of your Total Measured Procurement Spend (TMPS) — essentially, how much of what you buy is bought from suppliers with good B-BBEE credentials.
ESD is a priority element on the generic scorecard. If a measured entity does not achieve the required sub-minimum, its overall B-BBEE status level is discounted, so weak procurement can pull down an otherwise good score. Rules differ for QSEs and under sector codes.
How supplier spend is recognised
Spend with a supplier is multiplied by a recognition percentage based on that supplier’s B-BBEE level. Buying from a Level 1 supplier is recognised at more than its actual value, while spend with a non-compliant supplier is not recognised at all.
| Supplier B-BBEE level | Procurement recognition |
|---|---|
| Level 1 | 135% |
| Level 2 | 125% |
| Level 3 | 110% |
| Level 4 | 100% |
| Level 5 | 80% |
| Level 6 | 60% |
| Level 7 | 50% |
| Level 8 | 10% |
| Non-compliant | 0% |
Example: R100 000 spent with a Level 1 supplier counts as R135 000 of B-BBEE procurement spend. The same R100 000 spent with a non-compliant supplier counts as zero.
The scorecard also sets separate targets for spend with Exempted Micro Enterprises and Qualifying Small Enterprises, and with black-owned and black women-owned suppliers.
Practical ways to improve your preferential procurement score
- 1Get your supplier data right. Many companies lose points simply because supplier certificates are missing, expired or recorded at the wrong level.
- 2Track certificate expiry dates. B-BBEE certificates and affidavits are valid for a limited period, so build renewal reminders into your supplier management.
- 3Verify certificates. Check that certificates were issued by a SANAS-accredited verification agency and that affidavits are correctly completed.
- 4Calculate TMPS correctly. Understand which spend is included and excluded so your percentages are accurate.
- 5Redirect spend deliberately. Identify categories where empowering suppliers are available and build them into your sourcing strategy.
- 6Develop suppliers. Supplier development initiatives help smaller suppliers grow — and contribute to the ESD element at the same time.
HOW PROCUREWISE CAN HELP
Supplier Vetting & Compliance Audits
Know exactly who you are buying from. We verify suppliers’ B-BBEE status, tax, labour and registration compliance before they cost you money or reputation.