CIDB Construction Registers Service 1a

1. CIDB Construction Registers Service 1a

2. Introduction: • Register of contractors • Register of projects • When do registers apply

3. What is the Construction Registers Service? • The Construction Registers Service is made up of the: • National Register of Contractors • National Register of Projects

4. CIDB Act empowers the Board to establish a register of : • Contractors • Suppliers • Manufacturers • Service providers in the construction industry (cidb has started the development of a register for professional service providers)

5. CIDB National Registers The CIDB Act tasks the Board to: • establish and maintain a national Register of Contractors which facilitates public sector procurement • establish and maintain the Register of Projects that will drive industry development objectives

6. Register of Contractors • The register is to: • support risk management in the tendering process; • reduce the administrative burden associated with the award of contracts; • reduce tendering costs to both clients and contractors; • enable effective access by the emerging sector to work and development opportunity; • assess the performance of contractors in the execution of contracts and thus provide a performance record for contractors; • regulate the behaviour and promote minimum standards and best practice of contractors;

7. Register of Contractors • store and provide data on the size and distribution of contractors operating within the industry and the volume, nature, performance and development of contractors and target groups; and • provides access by the private sector and thus also facilitate private sector procurement. Application Register of contractors is to be applied in all public sector construction works contracts which exceed R30 000 including VAT

8. Design of the Register of Contractors Register those that have the potential (capability) to undertake a contract of a given size, based on track records NB cannot register currentresource capacity of a contractor as it depends on the number of contracts that are being performed simultaneously Don’t register contractors who are under restrictions from doing business with the public sector eg. name appears on the register of tender defaulters, no tax clearance certificates

9. Contractor grading designation e.g. 5 CE Tender Value + Type of work 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. Two letters depict the class of construction works in which a contractor is registered.

10. Tender Value Ranges

11. Classes of construction works CE = civil engineering EE = electrical engineering GB = General building ME = Mechanical Engineering Specialist works (SA to SP)

12. Specialist works SA Alarms, security and access control systems SB Asphalt works (supply and lay) SC Building excavations, shaft sinking & lateral earth support SD Corrosion protection (cathodic, anodic and electrolytic) SE Demolition and blasting SF Fire prevention and protection systems SG Glazing, curtain walls and shop fronts SH Landscaping, irrigation and horticultural works SI Lifts, escalators and travellators SJ Piling and specialized foundations for buildings &structures SK Road markings and signage SL Structural steelwork fabrication and erection SM Timber buildings and structures SN Waterproofing using specialist systems. SO Water supply and drainage for buildings (wet services) SP Building of Homes in terms of NHBRC scheme

13. Financial capability • Relates to: • financial history (turnover) • the value of completed contracts ;and • the amount of working capital that can be mustered to sustain a contract (i.e. employable capital). • Employable capitalis determined by the liquid cash resources available to the contractor, including bank balances, loans that may be leveraged and any .financial sponsorships.

14. Employable capital = (NAV x r) + s where: NAV is the nett asset value (sum of the contractor’s assets less the sum of the contractor’s liabilities) for the two years immediately preceding an application contained in the summarised financial statements certified by an auditor, or in the case of a close corporation, the accounting officer; “r” is the bank rating factor (A & B = 3, C = 2, D to H = 1) “s” is the total value of financial sponsorship (any financial support from another party that contributes to the value of the applicant’s employable capital) that is acceptable to the CIDB.

15. or or or Values in Regulations

16. Works capability • Relates to: • largest contract undertaken in a class of construction works • the number of professionals employed • the fulfillment of relevant statutory requirements.

17. Largest contract over last five years

18. Qualified persons

19. Statutory requirements • A contractor must be in possession of an electrical contractor license issued by ECBSA for the Electrical Engineering class of construction works • be registered as a Home Builder with the NHBRC for the SP class of construction works.

20. FINANCIAL CAPABILITY WORKS CAPABILITY • Criterion A • Minimum Average Annual Turnover – over 2 Yrs • Criterion B • Largest construction works contract by value – over 5 Yrs • Criterion C • Employable capital(NAVxr)+ S • Criterion D • Requisite number of full time equivalent qualified personnel • Criterion E • Satisfy the specific requirements for the category - applying for • Criterion F • Largest construction works contract in class of works applied for Criteria applied to each class of works applied for

21. Newly constituted enterprise (less than 2 years of turnover ) • greater of: • assessment for one year; or • employable capital only (higher requirement) • Joint venture • If all contractors registered, “effective” contractor grading designation calculated from the sum of the individual parameters. • NB CIDB calculator available on www.cidb.org.za

22. Exemptions Contractors who are registered with the NHBRC as home builders are exempt from registration provided that they only undertake the construction of homes Labour Only Contractors who undertake substantially labour only contracts are exempt NB Contractors who work only for the private sector are not required to registered

23. Categories of Registration Current • Contractor Grading Designation • Status of Contractor – Potentially Emerging Enterprise Future • Best Practice Contractor Recognition Scheme • Status of recognition of the progress of a contractor in terms of any BEE Programme Note:TRACK RECORD – Grade 1 Contractors in who have executed a contract in excess of R10 000 are registered as having a “track record” (TR)

24. 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 • Potentially emerging enterprises may be awarded contracts in one contractor grading designation level higher that what they are registered in provided that the employer: • is satisfied that such a contractor has the potential to develop • ensures that financial, management or other support is provided to that contractor to enable the contractor to successfully execute that contract.

25. Contractor registration application process • Contractor completes registration form and submits along with supporting doc’s and proof of payment of fees • 21 working day processing period • Registration valid for three years • Annual update

26. Transitional arrangements The regulations permit the Board torelaxany 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.

27. or or or Values in Relaxations

28. Joint ventures (transitional arrangements)

29. Contractor Fees • Administration fee payable per class of works • Annual fee only for highest class of works registered in

30. Contractor Fees

31. Register of projects • The purpose is to: • gather information on the nature, value and distribution of projects; and • provide the basis for a best practice project assessment scheme to promote the performance of public and private sector clients in the development of the construction industry.

32. Legislative requirements for Register of Projects • Register must categorises contractors in a manner that (16(1)): • facilitates public sector procurement • promotes contractor development. • 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))

33. Legal requirement An employer must, within 21 working days from the date on which a contractor’s offer to perform a construction works contract is accepted in writing by the employer, apply on the approved form to the Board for the registration of every project, consisting of a single construction works contract, of which the contract value exceeds a value determined by the Minister by notice in the Gazette. Public sector above R 200 000 Private sector above R 3,0 million (NHBRC homes exempt) See Relaxation

34. Reporting requirements • Within one month of: • award of the contract • issue of practical completion certificate • settling all amounts owing to the contractor in accordance with the contract, as determined by the employer(final completion) • renewal, cancellation or termination of contract • entering into arbitration or litigation • Also notify the Board regarding the nature of financial and management support provided to potentially emerging enterprises and the benefit derived therefrom. See Relaxation

35. Client Fees See Relaxation • Project Registration • R 750 – Flat fee • Fee must be paid on date of registration or in advance in relation to a number of projects that are to be registered by that client, for a period agreed on with the Board.

36. Transitional arrangements (public sector) • Regulations are deemed to be satisfied up to 15 November 2007 in the public sector if the following is undertaken on the CIDB website: • advertise competitive tenders ( ) • register award of tender (cidb website); and • register award of non-competitive tenders and • cancellations on the cidb website • Batched registration (electronic data file) may be made at least monthly • Project Registration Fee is waived! @cidb

37. @cidb i-Tender@cidb Tender TN2005/2/56 available from (client) for 2CE Closing 5/26/2005 Call 0124189500 • facilitates notification of contractors using: • - SMS (short messaging system) • - e.mail and • - Internet (search engine) www.cidb.org.za • allows tenders to be advertised and awards to be reported on

38. Implementation dates for the Registers

39. Implementation dates for the register of projects for contracts above R200 000 (public sector)

40. Note: • The transitional arrangements are that up to 15 Nov 2007: • private sector projects must be registered on the CIDB website (award and cancellation) • fees are waived • Batched registration may be at least quarterly • (private sector may make use of i-tender@cidb service • (optional))

41. Thank You