Requirements For Grading

Requirements For Grading

Requirement for track record

Your grade is your license to trade with government. It certifies you capable of delivering projects up to a pre-determined contract value in a given class of works.

Grading is based on two key determinants – construction works or track record, and available capital. Capital relates to funds presumed available to a contractor to start a new project. 

When assessing track record the cidb looks at projects that the contractor has completed in the last five years, in the field or class of works the contractor is applying for. This is a basic requirement when applying for any grade between 2 and 9.

Basic documentation required are:

  • Copy of the project award from the client who awarded the project to the contractor.
  • A certificate of project completion
  • A payment certificate.
  • Bank statements.

The cidb may request additional supporting documentation where necessary.

The cidb is gradually moving to online verification of projects completed by the contractor. In future projects will be verified via the cidb Register of Projects. Phase one of this process starts with all construction projects awarded from 01 April 2021. These projects must be registered on the Register of Projects for contractors to use them as track record.   

Works Capability

Designation

Maximum value of contract that a contractor is considered capable of performing

Track Record / Largest Contract completed, during the 5 years immediately preceding the application, in the class of contruction works applied for

2

R1 000 000

R130 000,00

3

R3 000 000

R450 000,00

4

R6 000 000

R900 000,00

5

R10 000 000

R1 500 000,00

6

R20 000 000

R3 000 000,00

7

R60 000 000

R9 000 000,00

8

R200 000 000

R30 000 000,00

9

No Limit

R90 000 000,00

Requirements for capital

Your grade is your licence to trade with government. It certifies you capable of delivering projects up to a pre-determined contract value.

Grading is based on two key determinants – construction works or track record, and then capital. Capital relates to funds presumed available to you to start a new project. 

To assess a contractor’s available capital the cidb looks at the contractor’s financial statements for the immediate past two years. The most critical information is the contractor’s annual turnover during this period. To determine grading the cidb will consider the contractor’s best annual turnover of the two years.

The following are turnover requirements in the different grades.

GRADE

Best annual turnover

Available capital

2

-

-

3

R1 000 000

R100 000

4

R2 000 000

R200 000

5

R3 250 000

R650 000

6

R6 500 000

R1 300 000

7

R20 000 000

R4 000 000

8

R65 000 000

R13 000 000

9

R200 000 000

R40 000 000

The cidb allows a contractor to use sponsorship as a measure to boost capital requirements if the contractors’ turnover falls short. A financial sponsorship is a guarantee or surety by a 3rd party to cover liabilities should the contractor be unable to meet its financial obligations.

Sponsorship may be provided by a financial institution or anybody else. If the sponsor is not a financial institution its sponsorship may not exceed 15% of its net asset value. There are further provisions if the sponsor is also a shareholder in the company.

Click here to view the checklist of registration requirements in the different grades.