B-BBEE Qualifying Small Enterprise (QSE): Scorecard and Compliance
Qualifying Small Enterprises occupy the middle tier of the B-BBEE framework: too large for the EME affidavit shortcut, but eligible for a simplified scorecard that measures only four of the five generic elements. For businesses with annual turnover between R10 million and R50 million, understanding the QSE scorecard — and how to maximise it — is essential for maintaining tender competitiveness.
What Is a QSE?
A Qualifying Small Enterprise (QSE) is an entity with annual total revenue between R10 million and R50 million. The QSE threshold has been in place since the original 2007 codes and was retained in the Amended Codes. QSEs are measured against a simplified scorecard that allocates 100 points across four chosen elements rather than the five-element 109-point Generic Scorecard.
QSEs that are 100% black-owned may still claim automatic Level 1 status via sworn affidavit, provided this can be confirmed. All other QSEs must be verified by a SANAS-accredited verification agency.
The QSE Scorecard: Choosing 4 of 5 Elements
A QSE may choose any four of the five generic elements for measurement. However, the priority element rules still apply — a QSE that chooses to include Ownership, Skills Development, or ESD must still meet the sub-minimum thresholds for those elements to avoid demotion.
Each of the four chosen elements is weighted equally at 25 points, giving a total maximum of 100 points. This means a QSE scoring 100 points achieves Level 1 status. The strategic choice of which elements to include and exclude is a key compliance planning decision for QSEs.
Strategic Element Selection
Most QSEs exclude the element on which they score worst. For a company with no black shareholders, excluding Ownership avoids a zero score on that element. For a company with minimal training spend, excluding Skills Development may be preferable. However, be aware that procurement-focused buyers in your supply chain may assess whether you exclude priority elements when deciding on supplier preferences.
Common exclusions: Ownership (if no black shareholders), Management Control (if management team is predominantly white), or SED (if contributions are minimal). ESD is rarely excluded because Preferential Procurement can often be scored well if suppliers are verified B-BBEE compliant.
Points and B-BBEE Levels for QSEs
The QSE B-BBEE level thresholds are the same as for Generic Enterprises in terms of recognition percentages, but the point requirements reflect the 100-point maximum scorecard:
- Level 1: 100 points — 135% recognition
- Level 2: 85 to 99 points — 125% recognition
- Level 3: 75 to 84 points — 110% recognition
- Level 4: 65 to 74 points — 100% recognition
- Level 5: 55 to 64 points — 80% recognition
- Level 6: 45 to 54 points — 60% recognition
- Level 7: 40 to 44 points — 50% recognition
- Level 8: 30 to 39 points — 10% recognition
- Non-Compliant: below 30 points — 0% recognition
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Frequently Asked Questions
Can a QSE change which four elements it measures year on year?
Yes. There is no obligation to measure the same four elements each year. You should choose the combination that maximises your score for each measurement period, based on your actual performance across all five elements.
Does a QSE need to comply with priority element sub-minimums?
Only if the QSE includes that priority element in its four chosen elements. If Ownership is excluded, there is no sub-minimum obligation for Ownership. If Skills Development is included, the 40% sub-minimum applies.
When does a QSE become a Generic Enterprise?
When annual turnover crosses R50 million, the entity transitions to the Generic Enterprise category and must comply with all five elements of the Generic Scorecard from the following financial year.
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