Activating the Registers within Construction Procurement 1b

1. Activating the Registers within Construction Procurement1b

2. A generic procurement process Activity 1: Establish what is to be procured Activity 2: Decide on procurement strategies Activity 3: Solicit tender offers Activity 4: Evaluate tender offers Activity 5: Award contract Activity 6: Administer contracts and confirm compliance

3. Registers & Procurement Interactions 3. Validate CIDB Registration 1. Determine approximate contractors grading requirements e.g 5 GB Reg Con 4. Validate Contractor Grade 1. Establish what is to be procured 2. Determine Procurement strategy 3. Solicit tender offers 3.a Tender Offers by contractors 4. Tender Evaluation & Contractor selection 5. Award contract 6. Manage contractor 2. Advertise using iTender, indicating approximate contractor grading requirements Reg Proj 5. Register Award 6. Register Completion (optional)

4. A generic procurement process Assess market capacity & BEE opportunities using RoC Activity 1: Establish what is to be procured Activity 2: Decide on procurement strategies Activity 3: Solicit tender offers Apply register of contractors Activity 4: Evaluate tender offers Activity 5: Award contract Register of projects Activity 6: Administer contracts and confirm compliance

5. Development of registered contractors / Broad based black economic empowerment • The information stored in the registers • enables gaps in contracting capacity to be identified • provides market intelligence; and • facilitates the appropriate targeting and integration of development initiatives Assess market capacity & BEE opportunities using RoC

6. Development of registered contractors • Employers should provide registered contractors with work opportunities so that they can be sustainable& improve their contractor grading designation by: • 1 providing packages of projects to provide continuity; • 2 implementing targeted development programmes to support potentially emerging contractors; • 3 offering preferences to contractors who undertake to enter into joint ventures with or subcontract portions of the works to such contractors; and • 4 requiring a prime contractor to subcontract defined portions of the works to such contractors • 5 Provide term contracts e.g. for maintenance • Can also provide a preference for a particular contractor grading designation

7. 1Identify preferably one, but not more than two, class(es) of construction works that best describes the works to be performed. • CE = civil engineering • EE = electrical engineering • GB = General building • ME = Mechanical Engineering • Specialist works • eg concrete fencing may be CE or GB • 2Estimate the tender value including value added tax • say R 4,5 million Prepare procurement documents

8. 3Determine the approximate contractor grading designation based on the selected class(es) of construction works and estimated tender value Prepare procurement documents Class of construction works 5 C E 4,5 m Tender value range Alternatively5GB 5CE/GB Not permitted

9. Consideration: Estimating requirements for contractor grading designations where value is close to limit of tender value range Estimated value +20% or less Upper limit of tender value range limit Adopt lower contractor grading designation (no prejudice) Example: Estimate = R5,3 million ≤ 1,2 x R5,0 = R6,0 Use designation 5 (R3,0 to R5,0)

10. Consideration: • Grading designations for construction works taking place over an agreed number of years • Base estimated tender value on annual value where work: • is on an “as and when required” basis eg pipelines; • of a routine nature e.g. road maintenance; or • grouped into identifiable and similar components where commencement of the next component is dependent on the completion of the previous one eg the building of a limited number of class room blocks where a block is substantially complete before embarking on the construction of a subsequent block

11. Invite contractors to submit tender offers • 4Notify tenderers of contractor grading designation requirements in invitations to tender Notice and Invitation to Tender It is estimated that tenderers should have a CIDB contractor grading of 5CE or 5GB higher. or It is estimated that tenderers should have a CIDB contractor grading of 5CE or 5GB or higher. 4CE or 4GB potentially emerging enterprises who satisfy criteria stated in the Tender Data may submit tender offers. (Wording for calls for expressions of interest also available) CIDB Standard for Uniformity in Construction Procurement

12. Prepare procurement documents • 5State requirements for contractor grading designation in tender data in the form of eligibility criteria Tender data Only those tenderers who are registered with the CIDB, or are capable of being so prior to the evaluation of submissions, in a contractor grading designation equal to or higher than a contractor grading designation determined in accordance with the sum tendered, or a value determined in accordance with Regulation 25 (1B) or 25(7A) of the Construction Industry Development Regulations, for a CEor GB class of construction work, are eligible to have their tenders evaluated. Joint ventures are eligible to submit tenders provided that….. (Wording for PE potentially emerging contractors also available in Standard for Uniformity)

13. Determine whether or not tender offers are responsive • Look up each tenderer’s contractor grading designation on the register. Evaluate only those tenderers who have not tendered above their tender value range, except where the sum tendered is just above the limit of their range. 4 R 3 000 000 5 R 5 000 000 6 R 10 000 000 Example: Tenderer cgd tendered amount A 5 R 5,6 million B 6 R 6,5 million C 6 R 7,0 million D 5 R 8,0 million E 4 R 6,2 million Declare as non-responsive

14. “Capable of being so registered” An employer may evaluate a tender received from an unregistered tenderer, only if such a tenderer satisfies all the requirements for registration in a particular grade. Note: Evaluation commences with the reduction of tender offers to a comparative basis The onus is on the employer to be satisfied that the contractor is capable of being registered. Tip – get a copy of contractor’s CIDB application to evaluate whether the contractor is likely to meet the requirements for registration in the required category.

15. Determine whether or not tender offers are responsive • 7Declare as non-responsive all tenders received from: • a) registered contractors who tender above their designated tender value range, except where the margin by which the tender value range is exceeded is reasonable; or • b) unregistered contractors who are not considered as being capable of being registered in the required contractor grading designation prior to the evaluation of tenders.

16. Determine whether or not tender offers are responsive • 8 Decide in the case of a tenderer who tenders above his tender value range if: • i) the amount by which the tendered sum exceeds the tender value range is reasonable; • ii) the award of a contract to such a contractor does not impose any undue risk. Example: Tenderer cgd tendered amount A 5 R 5,6 million B 6 R 6,5 million C 6 R 7,0 million Employer can award contract to tenderer A if satisfied that tenderer has sufficient capability and capacity

17. Determine whether or not a contract can be awarded to a responsive tenderer • 9 Determine if there are any reasons for not awarding a contract • may be subject to restrictions • must have the capability and capacity to perform the contract. • must have legal capacity to enter into the contract. • must be solvent • must satisfy all legal requirements. • may be disqualified due to conflicts of interest.

18. Perform a risk analysis. • 10Ascertain if any of the following, as relevant, presents an unacceptable commercial risk : • unduly high or lowtendered • rates or amounts in the tender offer; • c) contract data provided by the tenderer; or • d) the content of tender returnables which are to be included in the contract.

19. Confirm recommendation contained in the tender evaluation report 11 Confirm that tenderer is on the register and is in possession of required contractor grading designation

20. Formally accept tender offer Register contract award with 21 working days of acceptance of offer, indicating if the regulations relating to the awarding of a contract outside of a contractors cgd were applied Capture contract completion / termination data • Submit report within one month of: • issue of practical completion certificate; • making last (final) payment to contractor in terms of the contract; • canceling or terminating contract; or • renewing a contract.

21. Register of Projects (deemed to satisfy) Notify contractors 1 Advertise tenders on i-Tender@cidb 2 Award contract 3 Cancel tender or cidb website 4. Cancellation of contract

22. How to get started? Obtain employer number Register Employer and Users Form P1

23. What needs to happen on and after d-day? • Register of contractors • Register of projects

24. Register of contractors The contractor grading designation must be applied in all tender advertisements for engineering and construction works and in the procurement documents relating to such works. Register of projects The register of projects must be applied to all construction contracts awarded

25. Using the CIDB website / i-tender service • Confirm the grading / registration / application status of contractors • Obtain information on the numbers and profiles of registered contractors • Establish the contractor grading designation of JVs • Advertise tenders / expressions of interest • Cancel tenders • Report on the award and cancellation of contracts • View advertisements / awards / cancellations

26. Verification process

27. Contact persons Please contact the following people at the CIDB for: Procurement related issues Nomaphoso Mkhonza Lerato Molefe Contractor Registration issues: Wisane Maluleke Busang Tjale Tel: 0860 10 33 53

28. Thank You