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Contractor Development FAQHow does registering contractors assist contractor development?

It shows whether companies owned by target groups such as blacks, women and youth are growing in terms of grading and are sustainable.

It shows where Government spends the bulk of infrastructure investment in terms of packaging of projects and which grade contractors and classes of works are most benefiting.

It helps agents of contractor development to make informed decision about where development initiatives are most needed and to measure whether such interventions are effective.

It enables contractor development agents to set clear and measurable targets for growth and development of contractors.

Contractor Development FAQHow can clients use procurement to ensure that large contractors contribute to development?

The cidb Standard for Indirect Targeting enables clients to stipulate minimum requirements for training and development of subcontractors on specified projects.

This is only one of the ways in which clients can ensure that development of small and emerging contractors by the established sector becomes a condition of contract on Government projects. It is additional to the requirements of the BBBEE Act which sets targets for empowerment and the Construction Industry Charter.

Contractor Development FAQIs it so bad to let a contractor stay in a contractor development programme indefinitely?

A contractor development programme should have clear and specific goals and outcomes. Participants must exit the programme at the end of its duration.

The only benefit to be derived from an open ended contractor development programme is job creation. The downside is creation of a dependency syndrome where contractors do not learn the skills to survive in the open competitive market space.

Contractor Development FAQDoes the cidb have guidelines for clients who want to unbundle projects to promote contractor development?

The cidb Practice Note 29 identifies methods that clients can apply to achieve a balance between delivery of projects and empowerment.

Infrastructure Procurement FAQDo the cidb criteria ensure that registered contractors are capable to perform at the grades they are registered in?

Currently the role of the Register of Contractors is to provide macro-risk assessment to support clients’ procurement. It does not remove the client’s responsibility to conduct due diligence to ensure suitability of a contractor for the project that needs to be delivered.

To determine grading the cidb considers the contractor’s verifiable track record of a project(s) completed in the relevant class of works and to the requisite value. It also considers the contractor’s demonstrable financial capability to operate in the relevant grade.

In Phase 2, emphasis will also be on the contractor’s actual performance on individual projects. Phase 2 of the Register will be undertaken under the cidb Contractor Recognition Scheme.

Infrastructure Procurement FAQHow does a client verify a contractor’s registration status and grading?

The names, particulars and grading levels of all registered contractors are published on the cidb website. The cidb website is the only up to date and reliable method of authenticating a contractor’s registration

Infrastructure Procurement FAQCan a client award a tender based on a contractor’s Potentially Emerging status if the client did not state the intention to do so in the tender advert?

No. The client must indicate the intention to award a project to a PE contractor in the tender advert in order to invoke the rules of the PE status on tender award.

Infrastructure Procurement FAQWhat is the correct way to deal with arithmetic errors in a tender document?

The client must:
Consider the signed Form of Offer and Acceptance

  • Analyze the tender price according to the bill of quantities (BoQ) or activity schedule

  • Identify any gross misplacement of decimal point in any unit rate

  • Identify omissions in the BoQ

  • Identify arithmetic errors in the calculation of line items – item totals, page totals or section totals

  • Inform the bidder of the errors and ask the bidder to confirm the price stated in the Form of Offer and Acceptance

  • Adjust the price to the correct figure

  • Evaluate the tender based on the confirmed price

The contractor may only communicate disagreement with the corrected price in writing.

Infrastructure Procurement FAQCan a client award a contract above a contractor’s tender value limit?

The Construction Industry Development Regulations and practice guides stipulate the strict conditions under which a contractor may be awarded a contract above their grading tender value limit. These conditions apply where:

  1. The client applies the contractor’s Potentially Emerging status to pursue clear development goals and has put in place contractor development support to ensure success of the project.

  2. The client invokes Regulation 25(7a). The clause allows the client to award a contractor a tender above their tender value limit, provided that the margin by which the tender exceeds the contractor’s value limit is reasonable; the award does not pose undue risk to the state; and the tender offer complies with all regulations

 

Infrastructure Procurement FAQIs it correct to limit bidding to one grade when advertising a tender?

No. The correct way of advertising tenders is to stipulate the minimum cidb grading that tenderers should have, as an estimate. 

Infrastructure Procurement FAQIf the client’s advert states the required cidb grade as only an estimate, can a lower grade contractor tender and can the client evaluate such a tender?

Yes. The client can evaluate the tender from a contractor graded lower than the estimate, provided the advert clearly states that the grade is only an estimate.

Infrastructure Procurement FAQWhat is the minimum value of projects that must be advertised via the cidb i.tender system?

Any construction project where the client is a member of the public sector must be advertised on i.tender if it is R200 000.00 in value, or above.

Construction Projects by state owned enterprises must be advertised on i.tender if they are R10m in value or above.

Infrastructure Procurement FAQDoes the public sector still have to use cidb registered contractors if the project value is below R200 000.00

If the project value is R30 000 or above the client must use a cidb registered contractor.

Infrastructure Procurement FAQHow long should the tender validity period be?

The client may not stipulate a tender validity period of more than 8 weeks. In exceptional circumstances the period may be 12 weeks, but not more. Tender evaluation should be completed within 8 weeks.

Infrastructure Procurement FAQCan the client appoint a contractor after the period of validity has expired?
No!
Infrastructure Procurement FAQIs it legally permissible to cancel the tender and then re-advertise?

The client may not cancel a tender, abandon the tender process or reject responsive tender offers, only to re-advertise the same scope of work within 6 months. The cidb Standard for Uniformity requires the client to wait at least 6 months before re-advertising.

The exception to this rule is if the client only received one response and the tender was returned to the tenderer unopened. Or if the tender was cancelled before the closing date. For more information please refer to cidb Practice Note 18.

Infrastructure Procurement FAQIs it acceptable for a contractor to tender individually and then tender separately for the same project, but as a joint venture?

This is a breach of the cidb standard conditions of tender and the client must disqualify both bids. The possible breach of trust between the joint venture partners has the potential to put the client at risk.

The misrepresentation is also a breach of the cidb Code of Conduct for all parties engaged in construction procurement.

Infrastructure Procurement FAQDoes the cidb system provide for registration of subcontractors?

Not yet, although this is under consideration. Currently the Register of Contractors only grades and categorises prime or main contractors. It also does not grade labour only contractors.

Infrastructure Procurement FAQDoes the cidb have a register of defaulters?

This is the role of the Register of Projects. Clients must register project cancellation on the Register of Projects. This is the only way that industry can reliably keep track of poor performers.

Clients must also register project completion on the RoP.

Infrastructure Procurement FAQIs it possible for the cidb to factor contractor skills and competencies into the Register of Contractors?

The skills of a contractor are not yet considered when assessing a grade. But it is envisioned that this will form part of the future Contractor Assessment Scheme in Phase 2 of the Register. This could include skills accredited through recognition of prior learning.

Contractor FAQWhich form do I need to fill to register as a contractor?

The relevant forms are either Grade 1 application form or the Grade 2 to 9 application form. The list of documents required for Grade 2 to 9 application and listed at the back of the application form. Please read through this checklist carefully.  The Grade 1 application form must be accompanied by:

  1. A valid Tax Clearance Certificate

  2. Copy of the company registration document

  3. Proof of payment

The cidb Provincial Offices offer registration support at no charge. Please visit one near you.

 

Contractor FAQCan I register online?

Online registration is not yet available but it is under consideration.

Contractor FAQHow long does it take to register with the cidb?

It takes 21 working days to register. The 21 day turnaround time applies to applications that are complete and compliant with the requirements of the grade the contractor is applying for. Grade 1 applications only take 48 hours to be processed and for registration to reflect on the cidb website.

Incomplete and non-compliant applications can cause unnecessary delays. Please visit the cidb Provincial Office near you for help, to ensure that your application is right, is complete and is compliant - the first time!

Contractor FAQIs there a grace period for renewal of registration after expiry of the 3-year validity period?

No. The contractor’s listing is effectively removed from the cidb website once the registration expires after 3 years. Contractors are strongly advised to apply for renewal 3 months before the date of expiry.

Contractor FAQDoes registration take the skills of a contractor into account?

Not yet. But this is envisaged for the future. 

Contractor FAQIs the contractor issued a certificate upon registration?

No. The cidb no longer prints registration certificates. Once a grading is awarded the name of the contractor gets published on the cidb website. This is where clients can verify grading as well as the status of a contractor’s registration.

Contractor FAQWhich contractors qualify for registration as Potentially Emerging (PE)?

Any contractor or enterprise that is owned 50% or more, by previously disadvantaged individuals can apply to be recognized as Potentially Emerging. The HDIs of such a company must have authority to manage the assets and daily operations of the enterprise.

Contractor FAQWhat are the benefits of being recognized as potentially emerging?

A contractor that has a Potentially Emerging status may be awarded a state tender one level above their registered cidb grade. A client who so awards a tender to a PE contractor must undertake to provide development support to the contractor during execution of the project. The PE status thus provides opportunities for emerging contractors to develop and to grow capability to carry out projects and to move up the cidb grades.

Contractor FAQWhy does the cidb Register have so many Grade 1 contractors?

The high number of Grade 1 contractors on the cidb Register is a reflection of prevailing market conditions, which drive people to seek business opportunities, wherever such opportunities are perceived to exist.

The numbers are also driven by the perception that the construction industry has low barriers to entry.

Contractor FAQWhat is a joint venture?

This is a grouping of 2 or more contractors who jointly undertake to perform a construction contract. Joint Ventures that are affected by the cidb grading are those between contractors only. Built environment professions fall outside of the cidb grading system.  

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