How B-BBEE shapes who companies buy technology from — and why it is a procurement scorecard, not a grant that pays for AI software.

dgm is an independent integration partner for osFoundry — it is not affiliated with osFoundry’s maker (OS LLC) and has not yet completed an integration project for any client.

Broad-Based Black Economic Empowerment (B-BBEE) shapes who companies prefer to buy technology from. It is a procurement and empowerment scorecard — not a grant that pays for AI software.

What B-BBEE is

  • B-BBEE is a statutory empowerment and transformation framework that scores companies on a scorecard; it does not disburse funds to buy software.
  • The current generic Codes — the Amended Codes of Good Practice — became effective on 1 May 2015 and remain in force until amended, substituted or repealed.
  • The generic scorecard has five elements: ownership, management control, skills development, enterprise and supplier development, and socio-economic development.

How it shapes technology procurement

  • A measured entity earns preferential-procurement points based on its spend with B-BBEE-compliant suppliers, weighted by each supplier’s B-BBEE recognition level.
  • So a supplier’s B-BBEE level affects how much procurement credit its customers earn by buying from it — which shapes who buyers prefer.
  • This is a reason a buyer favours a higher-B-BBEE-level supplier; it is not a pot of money that pays for the buyer’s AI software.

Where osFoundry and dgm fit

  • A supplier’s B-BBEE level is about the supplier’s transformation, not an accreditation to deliver an incentive.
  • Adopting a tool like osFoundry is a procurement decision; B-BBEE shapes supplier preference, it does not fund the purchase.

The honest framing

Public support in South Africa funds the company’s own research, development or innovation, or gives it a tax break — it does not buy an off-the-shelf AI subscription. The section 11D R&D tax incentive offers a 150% deduction on approved R&D, requires pre-approval by the Department of Science and Innovation and has been extended to 31 December 2033; the Technology Innovation Agency (TIA) and the Small Enterprise Development and Finance Agency (SEDFA, formed in 2024 from SEDA and SEFA) fund innovation and small enterprises; and DTIC sector programmes such as the Global Business Services (GBS) incentive and the automotive APDP support specific industries. Separately, Broad-Based Black Economic Empowerment (B-BBEE) is a procurement and empowerment scorecard, not a grant: a supplier’s B-BBEE level affects how many procurement points its customers earn, so it shapes who buyers prefer rather than paying for software. dgm is not a registered or accredited provider of any of these programmes; it can advise a beneficiary or act as a subcontractor.

Where dgm comes in

dgm is an independent integration partner that helps organisations in South Africa adopt the osFoundry platform — from identifying the first practical use case, to setting it up, to connecting AI to the systems you already run. dgm can help identify which parts of your activity might qualify — without committing that any incentive will be granted. dgm operates separately from osFoundry’s maker (OS LLC) and has not yet completed an integration project for any client, so everything above is a proposed service rather than a delivered outcome. If you would like to weigh up a practical first step, dgm would be glad to think it through with you. Arrange an introductory call with dgm.

This article is general information and is not legal, financial or tax advice. Incentives, tax rates and regulations change; always confirm the current position with an official source (SARS, the Department of Science and Innovation, the dtic, the Information Regulator, the FSCA or the relevant authority) or a qualified adviser before you act.