CONSTRUCTION INDUSTRY DEVELOPMENT BOARD Umgeni Supplier Information Session Tuesday 27 September 2005 Presented by Ronnie Khoza development through partnership Construction Industry Development Board
What is the CIDB? Ø CIDB is a statutory body appointed by the National Minister of Public Works to drive a comprehensive industry development strategy in the country (CIDB Act 38 of 2000) development through partnership Construction Industry Development Board
Mandate of the CIDB Ø“to provide strategic leadership to construction industry stakeholders to stimulate growth, reform and improvement of the construction sector”. development through partnership Construction Industry Development Board
Ch. 3 of CIDB Act 38 of 2000 – Register Contractors Ø “. . establish a national Register of Contractors, which categorises contractors in a manner that facilitates public sector procurement and promotes contractor development” development through partnership Construction Industry Development Board
Register of Contractors Ø Legislative requirements for Register of Contracts Ø Register must categorise contractors in a manner that (16(1)): • facilitates public sector procurement • promotes contractor development. Ø A contractor may not undertake, carry out or complete any construction works or portion thereof for public sector contracts, awarded in terms of competitive tender or quotation, unless he or she is registered with the Board and holds a valid registration certificate issued by the Board. (18(1)) development through partnership Construction Industry Development Board
Exemptions Labour-Only Contractors Ø Bulk of materials being supplied by the employer Sub-Contractors Ø Sub-contractors are not required to register with the CIDB. Private Sector Contractors Ø Contractors who work only for the private sector are not required to register. NHBRC Contractors Ø Contractors who are registered with the NHBRC as home builders are exempt from registration provided that they only undertake the construction of homes. Joint Ventures Ø If all JV partners are registered, JV need not register Ø If all contractors registered, “effective” contractor grading designation calculated from the sum of the individual parameters. development through partnership Construction Industry Development Board
Objectives of the Register of Contractors Ø Support risk management in the tendering process; Ø Reduce administrative burden associated with the award of contracts; Ø Reduce tendering costs to both clients and contractors; development through partnership Construction Industry Development Board
Objectives of the Register of Contractors Ø Enable effective access by the emerging sector to work and development opportunity; Ø Assess performance of contractors in the execution of contracts and thus provide a performance record for contractors; Ø Regulate behaviour and promote minimum standards and best practice of contractors development through partnership Construction Industry Development Board
Registration Process of Contractors • Collect Registration Forms : • CIDB Help Desk? ; and • Download from the CIDB Website. • Completion of Forms • Complete the forms, attach all the documentation, pay the fees and submit the forms to the CIDB for processing development through partnership Construction Industry Development Board
Registration Process of Contractors • Acknowledgement of Receipt of application • CIDB will acknowledge the receipt of the application for registration • Processing of Forms • Within 21 days CIDB will process the forms (provided that all the documentation have been submitted by the Contractor). development through partnership Construction Industry Development Board
Classes of Construction for Contractor Registration Ø CE = Ø EE = Ø GB = Ø ME = Ø SW= Civil Engineering Electrical Engineering General Building Mechanical Engineering Specialist Works development through partnership Construction Industry Development Board
Documentation requirements • • • Proof of Payment Proof of payment (Bank deposit slip or internet transfer print-out) Tax Clearance Certificate Original and Valid Tax Clearance Certificate Previous Contracts (5 years) Documentary proof by the employer of contracts completed during the last five years. development through partnership Construction Industry Development Board
Documentation Requirements • • • Financial statements- Grade 5 upwards Audited financial statements for the past two years (for 5 and above). VAT Returns- Grades 3 & 4 VAT Returns for the past two years for those enterprises that do not have audited financial statements and are applying for contractor designation 3 & 4. Sponsorships All financial sponsorships or credit facilities development through partnership Construction Industry Development Board
Documentation Requirements • Legal entity • • Certified Copies of enterprise registration documents Identification Documents • • Certified copies of all enterprise principals Work Permits • Work permits of all principals / residents of foreign descent development through partnership Construction Industry Development Board
Documentation Requirements • Special Requirements • Electrical contractor’s- ECBSA Registration Certificate (where applicable). • NHBRC Registration applicable) number (Where development through partnership Construction Industry Development Board
Payment for Registration • Registration Fees • • Administration Fees • R 250 to R 750 per contractor Annual Fees • R 200 to R 40 000 per contractor. development through partnership Construction Industry Development Board
Schedule of Fees Contractor Grading Designation Maximum Value that a Contractor is considered capable of handling Annual Fee for the Administratio highest Contractor n Fee for each Grading grade Designation 1 R 200 000 R 250 R 200 2 R 500 000 R 250 3 R 1, 500 000 R 750 R 300 4 R 3, 000 R 750 R 800 5 R 5, 000 R 750 R 1, 500 6 R 10, 000 R 750 R 3, 000 7 R 30, 000 R 750 R 8, 000 8 R 100, 000 R 750 R 25, 000 9 Unlimited R 750 R 40, 000 development through partnership Construction Industry Development Board
Payment for Registration • Contractors to pay directly at the Bank. • Proof of payment to be submitted with the Registration Forms. • Without the payment, the CIDB will not be able to process the applications. development through partnership Construction Industry Development Board
CIDB Grading of Contractors • The Grades indicate the size of contracts a contractor is capable of undertaking within specified categories of construction works. • Determine the capability of enterprises in terms of financial and works capability. development through partnership Construction Industry Development Board
Grading Criteria n Financial Capability n Criterion A Minimum Average Annual Turnover – over 2 Yrs n Criterion B Largest construction works contract by value – over 5 Yrs n Criterion C Employable capital (NAVxr)+ S development through partnership Construction Industry Development Board
Financial Capability Criteria Designation & Tender Value Range Designation Track Record past two Yrs Current Financial Capability Max Value Min Ave- Value Min- of Contract Annual Turn largest Employable that a over in the contract in Capital + contractor is last two 2 Yrs. the last Guarantees considered (Rand) 2 y. RS (Track capable of record) financing (Rand) No Requirement Newly constituted enterprise Min employable capital (Rand) 1 200 000 No Requirement 2 500 000 No Requirement or 80000 or 60 000 3 1 500 000 or 780 000 260 000 or 195 000 325 000 4 3 000 or 2 400 000 800 000 or 600 000 1 000 5 5 000 4 800 000 1 600 000 1 200 000 2 000 6 10 000 9 000 3 000 2 250 000 3 750 000 7 30 000 24 000 8 000 6 000 10 000 8 100 000 78 000 26 000 19 500 000 32 500 000 9 No limit 240 000 80 000 60 000 100 000 development through partnership Construction Industry Development Board
Grading Criteria n Works Capability n Criterion D Number of full time qualified personnel n Criterion E Specific requirements for the category – applying For, e. g. ECBSA Certificate. n Criterion F Track record in Works capability over 5 years development through partnership Construction Industry Development Board
Qualified Persons Contractor Grading Designation Maximum Value Of Contract X 1000 Registered in terms of a built environment profession Act Registered in terms of the SAPCMP Act or the Engineering Profession Act GB Specialist CE EE ME 1 200 - - - 2 500 - - - 3 1 500 - - - 4 3 000 - - - 5 5 000 - - - 6 10 000 - 1 1 7 30 000 1 2 2 8 100 000 2 3 3 9 No limit 3 4 4 development through partnership Construction Industry Development Board
Grading Categories Contractor Grading Designation Maximum Contract Value 1 R 200 000 2 R 500 000 3 R 1, 500 000 4 R 3, 000 5 R 5, 000 6 R 10, 000 7 R 30, 000 8 R 100, 000 9 Unlimited development through partnership Construction Industry Development Board
Contractor Grading Designation Contract value Type of work 5 The single number represents a contractor’s capability to undertake a contract in a particular class of construction works with a specified tender value range. CE Two letters depict the class of construction works in which a contractor is registered. development through partnership Construction Industry Development Board
Potentially emerging contractors The Act provides for “emerging enterprise” i. e. an enterprise which is owned, managed and controlled by previously disadvantaged persons and which is overcoming business impediments arising from the legacy of apartheid. Contractors may apply to the Board to be registered as potentially emerging enterprise. Clause 25(8) CIDB Regulations- Potentially Emerging Enterprises may be awarded contracts in one contractor grading designation level higher than what they are registered in provided that the employer: • is satisfied that such a contractor has the potential to develop and qualify to be registered in that higher grade; and • ensures that financial, management or other support is provided to that contractor to enable the contractor to successfully execute that contract. development through partnership Construction Industry Development Board
Possible Contact Areas Planning purposes Contract award- check CIDB Reg Con Motivate service required Supply tender Information to tenderes Tenderer Prepares tender Receive tenders Contractor selection Reg Proj Award contract Manage contractor Award, Interim, Practical & Final Completion Register a Project development through partnership Construction Industry Development Board
Implementation dates of Register of Contractors Client site Implementation date Limpopo Provincial Department of Public Works 15 Oct 2004 e. Thekwini Metropolitan Council 14 Jan 2005 National Department of Public Works (all regions) and All Provincial Departments 30 Aug 2005 All Other National Departments other than the National DPW 30 Sep 2005 Every Public Entity 30 Nov 2005 development through partnership Construction Industry Development Board
Implementation dates of Register of Contractors Client site Implementation Dates Local Government Institutions Metropolitan Municipalities (except e. Thekwini Metropolitan Municipality) 15 March 2006 High Capacity Municipalities 30 April 2006 Medium Capacity Municipalities 30 July 2006 Low Capacity Municipalities 30 Nov 2006 development through partnership Construction Industry Development Board
Private Sector Projects All Private sector projects Greater than or Equal to R 3. 0 m – 30 August 2005 development through partnership Construction Industry Development Board
Transitional arrangements The regulations permit the Board to relax any of the criteria contained in the regulations in the transitional period up to 15 November 2007. The Board has published a number of relaxations in the manner in which a contractor is assessed and has significantly reduced the values published in the regulations for annual average turnover, highest value of contract completed and employable capital associated with all designations. development through partnership Construction Industry Development Board
Designation Maximum value of contract X 1000 1 2 3 200 500 1 500 4 3 000 5 6 5 000 10 000 7 8 9 30 000 100 000 No limit Min average turnover of last 2 years x 1000 0 0 Min contract Employable value over capital last five X 1000 years X 1000 0 80 or 0 50 or 260 150 1 500 or 800 300 2 500 1 600 500 6 000 3 000 1 500 18 000 70 000 210 000 8 000 26 000 80 000 4 500 18 000 54 000 750 Values in Regulations Construction Industry Development Board development through partnership
Joint ventures (transitional arrangements) Designation Deemed to satisfy joint venture arrangements 3 4 3 x designation 2 3 x designation 3 5 2 x designation 4 1 x designation 4 + 2 designation 3 2 x designation 5 1 x designation 5 + 2 x designation 4 6 7 2 x designation 6 1 x designation 6 + 2 x designation 5 8 9 3 x designation 7 3 x designation 8 development through partnership Construction Industry Development Board
THANK YOU! development through partnership Construction Industry Development Board
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