Frequently Asked Questions
Frequently Asked Questions
Welcome to our frequently asked questions section. Here you will find information pertinent to contractors, procurement and contractor development.
1. Are there plans to regulate contractor development?
The cidb is exploring possible regulation of some aspects of contractor development.
3.Do I need to register with the cidb if I am registered with the NHBRC?
The NHBRC regulates construction in the housing market. The cidb regulates all other construction outside of housing. The two registers serve different purposes.
4. Are joint ventures recognised as potentially emerging and can a client award one a contract as potentially emerging?
5. Does registration take contractor skills into account?
Not yet. But this is envisaged for the future.
6. Does the cidb provide contractor training?
No. The cidb is not a training institution. This is the mandate of other Government institutions, such as the CETAs.
7. How can the cidb help contractors to receive payment on time?
The cidb and the Department of Public Works are working closely together to review options on how the industry can resolve the problem of delayed payments. One of the options under consideration is to put regulations in place that can help alleviate the problem. Draft regulations in this regard were published for public comment and these comments are currently under consideration.
8. How 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.
9. How is the grading of a joint venture determined?
Grading of a JV is based on the combined grading of each member company. The cidb Joint Venture Calculator must be used to determine the grading of a JV.
10. How 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!
11. Is 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.
12. Is there a grace period for renewal of registration after expiry of the 3-year validity?
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.
13. Should the cidb not invest registration fees into training?
Registration fees are used to cover administration costs of registration. The revenue collected from registration fees only partially meets these administration costs. The bulk of the cidb funding comes from Government grants.
14. What are the benefits of being recognised 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.
15. What 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.
1. Can 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:
- 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.
- 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
2. Can 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.
3. Can the client appoint a contractor after the period of validity of the tender has expired?
4. Does 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.
5. Does 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 Register of Projects.
6. Does 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.
7. Does the public sector still have to use the cidb 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.
8. How 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
9. How 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.
10. Is 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.
11. Is 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.
12. Is 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.
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.
14. What 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.
15. What is the minimum value of projects that must be advertising 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.
Contractor Development FAQs
1. Does 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.
2. Is 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.
3. How 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.
4. How 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.