Tender Documents to Help the Average Ant

Tender Documents to Help the Average Ant

Tender documents to help the Average Ant.

Every day, a small Ant arrives at work very early and starts work immediately. She produces a lot and she was happy.

The Chief, a Lion, was surprised to see that the ant was working without supervision. He thought if the Ant can produce so much without supervision, would she produce even more if she had a supervisor?

So he recruited a Cockroach who had extensive experience as a supervisor and who was famous for writing excellent reports.

The Cockroach’s first decision was to set up a clocking in attendance system. He also needed a secretary to help him write and type his reports and he recruited a Spider, who managed the archives and monitored all the phone calls. The Lion was delighted with the Cockroach’s reports and asked him to produce graphs to describe production rates and to analyse trends, so he could use them for presentations at board meetings.

So the Cockroach had to buy a new computer and a laser printer and recruited a Fly to manage the IT department.

The Ant, who had once been so productive, happy and relaxed, hated this new plethora of paperwork and meetings which used up most of her time.

The Lion came to the conclusion that it was time to nominate a person in charge of the department where the Ant worked.

The position was given to the Cicada, whose first decision was to buy a carpet and an ergonomic chair for his office. He also needed a personal assistant who he brought from his previous department, to help him prepare a “Work and Budget Control Strategic Optimisation Plan”.

The department where the Ant works is now a sad place, where nobody laughs anymore and everybody is upset. It was at this time the Cicada convinced the Lion Chief, of the absolute necessity to start a “Climactic Study of the Environment.”

Having reviewed the charges for running the Ant’s department, the Lion found out that the production was even less then before!

So he recruited the Owl, a prestigious and renowned consultant to carry out an audit and suggest solutions.

The Owl spent three months and came up with an enormous report and after several volumes it that concluded: “The department is overstaffed…”

Guess who the Lion fired first?

The Ant, of course, because she “ showed a lack of motivation and had a negative attitude.”

Adapted from: Aesop’s Fable/ CP’s Fables

Perhaps this story rings true for you and you are compelled on a daily basis to acquire and complete mountains of paperwork. Unfortunately we cannot change how many supervisors or departments you work within.

We are however hopeful that this secret repository of Tender documents will help you be more positive, effective and motivated in your workplace as well as keep you out of the line of fire from any Lions!

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About Taryn Duckham

I am a lover of marketing, customer centricity and the art of influence. Being able to effect this through analysis, content and front end design is part of my work, my great love of creatively solving problems that reach across as many parts of Leads 2 Business as I can.

T is for Tender

"T" is for Tender

 

There is much excitement when a Project Status moves into Tender Stage. This means the project is going out to tender – tender for construction! Whoop whoop! Things are happening, construction is going to commence shortly. If, however, the Project goes out to tender for the professionals the Project Status will remain in Procedural stage as this is a tender for professional services to conduct feasibility studies, EIA studies etc.

But, back to the tender for construction. This could be an invited tender and this is limited to preferred contractors only who are invited by the developer to tender on the contract. These tenders are very hard to obtain information about as they are, well, invited. “Invited” also translates as code for “big secret, don’t tell anybody anything!”

Open/public Tenders are published in newspapers and the media and these are open to general contractors who may only be limited by their CIDB grading. With publishing of the Tender notices comes site inspection dates (which are generally compulsory) and site attendance registers. The Tender closing date is perhaps the second most important date after the site attendance date. The Tender notices (DTA) that are listed on the Projects include a hyperlink which links the Project and Tender. Once the Tender has closed and the bids are in, bidders lists are then requested and if successfully obtained, the bidders list is attached to the DTA and the Project as a document.

On average, it takes about 3 – 4 months for Tenders to be awarded, (but it can take longer. Much longer in Africa). Once 3 months have passed, it is time to follow up on the Tenders and see if any awards have been made and this is when the fun begins.

It involves phoning the contact(s) listed on the Tender, usually in the Procurement Department and hoping they are willing to release details of the awarded company. When phoning African countries, this could involve many calls and being transferred to several different people and then finally being told…. “No, you cannot have the award details”. So, I wait (after all, “good things come to those who wait”) and try again in another couple of weeks or months depending on the forcefulness of the ‘No’. Sometimes, I get lucky and if the Project is big enough to warrant media attention, and an article appears in a local newspaper giving details of the awarded company I am able to update the award details on our database.  Alternatively, more phone calls and emails, until eventually (sometimes only once construction has commenced) a kind person will relent and give me the award information. Other times, sadly I am not so lucky……

But I digress …… back to getting the award information….

When obtaining the award information, it is important to get the spelling of the awarded company’s name correct, usually using the NATO phonetic spelling which is: Alpha for A, Bravo for B, C for Charlie etc. However, it appears that not everyone is able to recall this list when it comes to spelling and in Africa there appears to be many variations to this list, including the use of animal names – and I have had some more unusual phonetic names, including “J” …. for Giraffe and “A” for ….Umbrella!! Really!?!

T is for Tenacious, E is for Excellent, N is for Never giving up, D is for Diligent, E is for Enduring and R is for Relentless: T E N D E R

 

 

 

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About Marlaine Andersen

I have been working for Leads 2 Business, in the Private Projects Department, for 10 years this July. I am Deputy HoD for Private Projects. Researching mining projects and projects through-out the African continent are my areas of research and I find them most interesting.

Is there Value in attending Tendering Workshops?

Is there Value in attending Tendering Workshops?

The question raised is similar to that for all other types of training where prospects question the wisdom of attending workshops. Depending on who’s answering the question, that in itself is a debatable one. If I were to be the one asking this question I would look for the following background checks on those offering the training.

Firstly, you have to look at the facilitators’ track record and here we are not referring to academic qualifications but for how many years has the person been presenting on the aspects of tendering. Secondly, you would have to request a Course Outline to determine as to whether the topics covered will indeed be in line with your expectations and thirdly, to check what kind of feedback past delegates’ are giving on the facilitators ability to bring the subject matter across in a manner that made them “happy”. I would say, that once you’ve ticked off all the boxes, then we are halfway there in answering the above question.

In essence it now becomes an issue as to what one should expect of such a workshop or training seminar. In the main, the facilitator has to cover the key legal aspects around the subject of tendering as well as bringing in other enabling legislation since the topic of tendering in itself is not a stand-alone issue. Depending on who one tenders for i.e. local, provincial or national government, parastatals or state owned enterprises, you need to be made aware by the facilitator that the applicable tendering-legislation has relevance to all these different spheres of government. Further, the facilitator needs to explain the different and various “stumbling blocks” found within the broader scope of the tendering process.

Primarily, those tendering for government contracts are challenged with submitting compliant bids since only those bids that are considered to be compliant will “graduate” to the short-list from which they will choose the successful bidder. The facilitator will also have to cover the aspects of the different committees systems, their structure, role and functions as well as how tenders are scored through the different point systems. Issues like the key pillars of tendering; BBBEE and sub-contracting, firm and non-firm pricing must also be covered in explaining the over-arching process of tendering.

Completing tender documents are not really open to varied interpretation since each bid document must consist of most of the 9 prescribed forms or returnables as issued by the national treasury. One of the areas that must be covered is the “declaration of interests” since delegates must be advised that by getting things wrong on this form could have serious legal repercussions such as being accused of what I call “inadvertent fraudulent declarations”. Also, the aspects of when to submit fixed prices and non-fixed prices coupled with the limitations on sub-contracting and the general conditions of contract, are also key issues to be dealt with in the workshop.

Overall, if you are happy that these key points will be covered in the workshop, then the answer to the above question should be in the “affirmative”

Gerrit is the Lead-Advisor at Taranisco Advisory CC and is contactable at advisor@taranis.co.za or www.taranis.co.za

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About Gerrit Davids

Gerrit Davids is the Lead Advisor at Taranis Co Advisory with more than 20 years experience in government procurement regulations and having trained more than 2000 people on how to submit compliant tenders.

Why are Professionals reluctant to hand out a BoQ?

Why are Professionals reluctant to hand out a BoQ?

 

Disclaimer: Please take note that this is my opinion and none of the comments below are intended to cause offence and do not point to any professional in particular.

 

Ok, as someone (who is not a contractor / tenderer / sub-contractor / vendor etc.) who has to obtain electronic bills of quantities from professionals, I have to state unequivocally, that I do not understand why all bills of quantities are not available in an electronic format. I understand that those electronic bills may only be available to the contractors who are tendering on the contract, but I believe there should still be electronic bills.

 

Some of the reasons we are given are:

1. Client does not want the electronic bill released.

2. Bill is only released to the tenderers who have purchased the tender document and attended the site inspection.

3. Bill is only released to everyone who attended the site inspection.

4. There are no electronic bills.

5. The consultant does not want his format available for anyone to copy.

6. There are some people who will try to tender on the contract without having purchased the tender documents.

 

My thoughts on these reasons are:

1. Why not? Does the client not realise that the electronic format is easier for redistribution to vendors, suppliers and sub-contractors? It is easier to re-incorporate the prices that are received back and makes it easier to compile prices. If it is easier for the contractor (and by extension, the vendors, suppliers and sub-contractors) to gather the prices, make sense of them and fill in the tender document, then it is probably going to mean that the client will receive better bids.

2. I have no problem with this reason, but in favour of making it easier for us to obtain the electronic bill, it would be great if you would provide us with the name of the person you sent it to at the specific contracting company, so that we can advise our contact at that company, who they need to contact in order for them to provide us with the electronic bill.

3. Please see point 2 above.

4. This is rather difficult to believe as there are various programs (WinQS, Bill, CCS, excel, etc.) which are available for use. Adobe is also used and although not optimal, it is definitely preferred over a scanned file any day.

5. Sorry to say, but most bills are in the same format already, irrespective of who the consultant was that drew it up.

6. So what? If they hand in an electronic copy of the bill or even, a printed out version of the bill, so what? The tender state clearly that only the filled in ORIGINAL tender documents will be accepted as a valid bid. Therefore, any and all bids submitted that are not filled in original tender documents should be void and it shouldn’t affect any of the other tenderers submissions.

 

In conclusion, the reasons we are requesting an electronic bill of quantities are:

 

A. Our subscribers (contractors), who are tendering on this contract (therefore they will purchase the tender documents and attend the site inspection), would like us to upload the bill on our Electronic Pricing System so that they can send it out to their suppliers / vendors / sub-contractors.

B. A vendor / supplier / subcontractor is interested in seeing if anything is on the bill that they supply or do, so that they can supply the contractors who are tendering on this project with prices (this is usually helped by an accompanying site register, so that they know who to submit their prices to…hint hint)

 

This should be a win-win situation for everyone concerned, so please, please be nice and provide electronic BoQ’s (even if it is just to the contractors:)).

 

 

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About Cecile Van Deventer

I joined the L2Q Team in 2006, as a L2Q Support Assistant and have been the HOD since 2010. I supervise L2Q Bills, Daily Tender Bills, Control Lists and Directory.

Evolution of a Project

Evolution of a Construction Project

How Project stages are broken down.

 

Over the eight plus years I have worked at L2B I have spoken to many  people who have wanted me to explain,

 

“Where do I ‘fit’ into a Project?”

 

i.e. where would my point of benefit be? How does Leads 2 Business classify Project stages? It makes sense to me that someone would want to know how it works because it helps them find their place in the puzzle.

 

As an introduction, our Projects Department are a wonderful bunch. Generally, if you need anything, the Projects Department is the place you would find it. Often referred to as the ‘crystal ball’ department, they seem to have a knack for sourcing information where others may fail.  This occasionally results in a couple of laughs, but has also included interesting incidents such as receiving phonecalls from subscribers wanting to know which direction the wind is blowing on site in Burkino Faso (which incidentally was sourced and sent to the subscriber).  Simply put, they move mountains to get what is needed. But I digress…

A Project is divided up into different stages where different Companies would get involved. These are broken down on the Leads 2 Business system as follows:

 

Conceptual Phase

Very early stage in the Project :–  This involves the Clients intention, Developers Prosposals, the Feasibility study and Anchor tenants express interest.

 

Procedural Phase

EIA Consultant is appointed :– This encompasses the basic design, EIA process, Geotechnical study, rezoning, licensing, invited list, Expression Of Interest  and Professionals appointment.

 

Design Phase

This involves the detailed design of the project including the Bill of Quantities.

 

Tender Phase

This involves the project going out to Tender, whether public, private and the negotiations involved.

 

Awarded Phase

The Main Contractor, Subcontractors and Suppliers are awarded.  There is potential that there is a delay between the award and the commencement of the project.

 

Underway Phase

The Main Contractor is on site and Construction is underway.

 

Complete Phase

The Project has reached completion.

 

So now the picture becomes a little clearer. You can see who is involved in the different stages and plan how you would like to contact them and when to market your services or products.   For a more detailed description of where the different fields are involved and where your points of benefit are you can click here.
Feel free to contact us should you have any questions.  We are happy to answer them and to assist.  You can mail Support@L2B.co.za or call 086 083 6337.

 

 

 

 

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About Carmen Barends

Social Media adventurer exploring new frontiers and learning how to survive. Tongue in cheek and mischief are the order of any good day topped with a sprinkling of laughter.

Nightmare on Tender Street

Bills of Quantity (BOQ) Monsters

 

A story of how bidding used to work

 

Early Monday morning I walk into my office. On my desk are three bound documents, I shake my head in disbelief. Right on cue, my boss walks in the door. I point at the documents and ask: “I wasn’t aware of any other tenders for this month?” He replies: “We received them Saturday morning, they close in a week, 9 days and 14 days respectively, I want the prices back for all three in four days’ time.” He walks into his office and closes the door. I am left alone by my desk, feeling like I am about to be suffocated.

 

Four days! Only four days! Do I look like a miracle worker?!

 

I shake my head, roll my shoulders and try to calm down. There is no time for histrionics right now, I have to get these tenders out and priced back to my boss in four days. First thing I do is look at the tenders to ascertain the areas where the work will take place. Ok, two of them I can send to the same vendors for prices as they are in close proximity, this will cut my work by a third. Feeling a little bit better, I start typing up the cover letters for each tender. Once complete and printed, I take the first tender document and remove the fasteners holding the tender document together (luckily the two tenders that are close together, I can unbind. Unfortunately, the last tender I will have to copy each page of the bill and they will probably have that blinking black line obscuring the item numbers. Ugh!). I start sorting the pages of the bill into the different trades I need to send to; of course some of the pages will be required for different trades as well. I then grab our vendor list and start looking for vendors in the required area. Once I have compiled the necessary list of every vendor I will be sending to, I realise that due to the project being rural, I am going to have to fax almost every vendor, as there is only one that has an email address. Great! Just great!

 

I look at the clock; it is 11:10 am. There is enough time to at least fax a few before I am supposed to go to lunch, although it looked like it was going to be a sandwich eaten on the go. With a heavy sigh, I pick up the different piles and trudge over to the fax machine. The light blinks, indicating that I need to replace the ink cartridge, I grunt. Now, I have to go find a replacement cartridge, as the stupid fax won’t work until I have replaced the cartridge. Some days, I really hate my job! I open the supply cabinet, rummage through the piles and finally spot the cartridge right in the back. I cut open the package and cross back to the fax, trying to remember the steps in replacing the cartridge, wishing for the millionth time that we could get an upgraded fax/printer machine. I finally wrangle the old cartridge out and insert the new one. Ok, time to fax. I grab the first pile, position the papers and pick up my list of vendors; I enter the first number and press send. The first two pages go through with no issue, the third page never emerges and the fax starts emitting a high pitched shriek, with lights flashing. Page jam, fantastic. I open the machine compartment, do a scan of the areas where the paper can be stuck and see at least three pages in different locations. I grab the first one and pull it out quite smoothly, the second one I can’t get hold, so I take a pair of tweezers from my handbag and finally manage to get it out. I reach for the third one, manage a good grip and start pulling, it won’t budge. Grimacing, I reset my foot, take the page in a two-handed grip and yank with all my might.

 

Chaos erupts! It’s like the machine is possessed. It’s spewing paper everywhere and then a black rain joins in coating everything in ink, including me. I try to fight my way to the machine, guarding my face with my hands, finally getting to the power cord and reach to push the power button…I wake up in a cold sweat, bolting upright, gasping for breath. I shakily reach up to push my hair off my sweating face. It’s only a nightmare, it’s not real. I exhale and feeling calm again, turn onto my side and close my eyes. Thank goodness I subscribe to Leads 2 Quotes.

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About Cecile Van Deventer

I joined the L2Q Team in 2006, as a L2Q Support Assistant and have been the HOD since 2010. I supervise L2Q Bills, Daily Tender Bills, Control Lists and Directory.

How does early project development benefit me and my company?

Early Private Project Construction Benefits

 

I have to revert back to the dictionary again and break that heading down, just the keywords, those are the important ones:

  • Early: Dictionary.com says “in or during the first part of a period of time, a course of action, a series of events”,
  • Benefit and its dictionary.com definition is: “Something that promotes or enhances well-being; an advantage”.

 

So, I could change the heading to: How does a course of action involving developments promote myself and my company? Conceptual is the earliest stage that we add new projects, normally this entails various studies that still need to be done, business plans, feasibility studies etc. This is an opportunity for everyone, might be a little early for the contractor to start sharpening his tools but he will know about this development and can follow the progress through the early stages while waiting to pounce when it’s his turn but if your forte is turning an idea into a viable business plan, this could be your moment. Procedural is still pretty early and here is when environmental studies will be done. There is a strong possibility that a professional team has not been appointed yet and this is where the Project Managers, Developers, Engineers, Quantity Surveyors and Architects can ply their trade and promote themselves as to why they would be the best person for the job. Design is a little later but still early enough in the game and perhaps the rest the professional team is still being sourced….this is your cue, call the contact that is listed on the project and promote you and your company should your profession not be listed. Today could be your day. We let you know about the opportunity as early as possible and being proactive you would use the opportunity to benefit you and your company.

 

For more information on Leads 2 Business, please visit www.L2B.co.za

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About Debbie Wessels

Juggling a energetic, full of surprises life, working full time with two teenagers and hoping to still be sane and normal by the time I retire.

What is the difference between a Tender and a Project?

What is the Difference between a Tender & a Project?

This is one of the most asked questions that I have received over the years. What is the difference between a Tender and a Project?  So I thought I would break it down as best as I understand it.

A Tender is is put out for supply of services or products where various entities can bid to be awarded the contract. This is one phase in a Project life cycle and generally happens over a short period of time e.g. two to three weeks.

A Project is the full life cycle from Conceptual stage to Completion/Postponement/Cancellation.

The stages of a project could be broken up as follows:

Conceptual stage is the beginning phase of the project.

Client / Developer – Feasibility Process – Securing Funding – Request for Proposal – Procedural stage involves obtaining various approvals and authorisations. Basic Design – Geotechnical Study – Licensing – EIA Process – Property Rezoning – Professionals.

Design & Tender

This stage involves detailed design, the tender process and bill pricing. The majority of the Project Professionals have been appointed at this stage. Bidding Contractors’ details are listed under Bidders. Detailed Design – Expression of Interest – Negotiation – Tender – Anchor Tenant – Invited List.

Awarded & Underway

The main contractor and subcontractors have been awarded and construction is underway.

Complete/Postponed/Cancelled

Practical completion is nearing the end or is structurally complete. The project is on hold for various reasons.
All this information is captured on our system in an accessible manner for our subscribers so they can keep up to date and put their business’s in the right position to take advantage of the opportunities that exist.

This is a very basic explanation, I know.  If you want to add to it, please feel  free to provide feedback for those reading.

.

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About Carmen Barends

Social Media adventurer exploring new frontiers and learning how to survive. Tongue in cheek and mischief are the order of any good day topped with a sprinkling of laughter.

What do I need to complete a Tender?

What do I need to complete a Tender?

Being an author on a blog certainly stretches you. Our Company started a blog this year to reach out to people and try address some of the questions we encounter in an informal manner.  It is harder than it looks.  We have some staff who are amazing authors and in doing so make it look so easy.  It isn’t you know.  But it does give you the opportunity to expand your skills somewhat.

That being said, one of the questions I encounter is “What do I need to Complete a Tender?”  There doesn’t seem to be a one-stop shop for all the tender documentation needed (if there is and I haven’t located it, please share, I would love to know).  So we have attempted to locate some tips of the trade from some websites and list some of the documentation needed.  Also find the link to our blog below the article where we have a list of all the electronic documents we could find.  So here goes….

Step-by-step guide to tendering for government

Get registered with relevant departments on their database.

Goods and services:

For tenders under R30 000 the relevant government department will usually approach three registered providers for a quote
Tenders of more than R30 000 must generally be advertised to all subscribers
Tenders over R20 0000 must be advertised and formally adjudicated
Building and engineering:

Tenders over R2-million have to be adjudicated and formally advertised
Tenders below R2-million are seen as minor and under R100 000 as micro

How do I know my business is ready to tender?

If it’s a registered business
If it has a good banking record and relationship with suppliers and clients
If it is able to deliver on all specifications
If there is no possible conflict of interest with the government body or anyone adjudicating on the tender application, in the form of directorships or shareholding or family relationships
If the business has the required cash flow
If there are qualified staff
If employees are registered with the Department of Labour
A sole trader or partnership can tender – however, the business must be licensed or registered with the relevant local authority, must have a bank account and must have up-to-date tax clearance

Keys to success:

Complete tender documentation in full
Ensure the business is properly registered and licensed, and that taxes have been paid
Preference points will be given to previously disadvantaged individuals (PDI) or women. Generally, for tenders over R50 000, 80% will be adjudicated on price and 20% on PDI or gender status. For tenders over R500 000, the 90% to 10% price system applies
Price plays an important role and the most expensive tenders are likely to be excluded first. Keep in mind that some costs can change, such as labour, material and equipment and this needs to be factored in

Tender documents must contain:

A VAT registration number

  • Any proof of product guarantee – like SABS or ISO marks of quality
  • Permits for goods not made in South Africa and prices for goods must be supplied
  • A number of forms need to be completed for national and provincial government tenders. These include:
  • Invitation to bid, in which the company agrees to be bound by terms and conditions of tender (eg Form ST 36)
  • Official cover page of the tender document; (eg Form ST 8)
  • Tax clearance certificate (eg Form ST 5)
  • One form requires: closing date, tender number, price, delivery period (eg Form ST 7)
  • Preference point certificate to highlight if there are previously disadvantaged candidates (eg Form ST 11)
  • A declaration of interest – businesses are required to declare relationships with members of the tender board or government. A list of these forms can be found on: (eg Form ST 12)

Have you been accepted or rejected?

The Tender Board will notify companies as to whether they have been accepted. It’s important to note that sometimes this can take some time and may not leave unsuccessful companies time to appeal, so experts approached by Corruption Watch advise keeping in contact with the government department and checking on the status of the tender process.

The departments or parastatals are not required to list on their websites who has been appointed, which many feel is a weakness, particularly for small businesses.

Objections:

Companies can also object to the department or government entity if they feel the period for application is not sufficient, or they may request a copy of the decision by the tender board.

For a further blog article with links to the various documents, click here.

 

 

 

Some helpful websites:

http://www.l2b.co.za/ProductInformation/Proformas

http://www.seda.org.za/MyBusiness/Factsheets/Pages/HowdoItender.aspx

http://www.westerncape.gov.za/tenders/how_to_tender

Source information:

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About Carmen Barends

Social Media adventurer exploring new frontiers and learning how to survive. Tongue in cheek and mischief are the order of any good day topped with a sprinkling of laughter.

Who needs to register for Construction Industry Development Board (CIDB)?

Who needs to register for Construction Industry Development Board (CIDB)?

GUIDELINES FOR CONTRACTOR REGISTRATION

Who must apply?
All contractors seeking to participate in public sector infrastructure delivery must be registered on
the cidb Register of Contractors.

Contractors who are exempted from registration are:
• Home builders, unless they also wish to tender for other kinds of public sector construction work.
• Those who undertake contracts consisting substantially of the provision of labour.
• Those who undertake contracts consisting substantially of the provision of supplies.

Why register?
According to the cidb Act 38 of 2000 no public sector client may award construction contracts to
a contractor who is not registered. The Register grades and categorises contractors according to
their capability to carry out construction projects. There are 9 different grading levels according to
which contractors can be registered. A grade determines the maximum Rand value of a project as
well as the type of construction works a contractor is capable to perform.
Can a contractor be registered in different grades?
A contractor may apply to be graded in one or several grades. However a contractor can only be registered in 1 grade per class of works.

Providing sufficient evidence to support your application
The CIDB evaluates applications for grading and registration based on evidence of works and financial capability provided by the
contractor. Evidence is then used to determine which grade and class of works a company qualifies for. Once a grade has been
determined and approved by the Board a contractor is then able to tender for construction contracts within the approved grade. Should a contractor fail to provide sufficient evidence to support the grade applied for the cidb will determine an appropriate grade based on the information at its disposal.
A contractor has the right to appeal the decision of the cidb.

To determine grading the cidb evaluates a contractor’s financial and works capability.

A. Financial capability requirements:

To determine financial capability the cidb takes into consideration:

1. The best annual turnover over the two financial years immediately preceding the application and available capital.
2. Available capital. The cidb calculates available capital by adding any financial sponsorship to the sum of the net asset value of a
contractor as indicated in the most recent financial statements. Net Asset Value is the difference between the total assets and total
liabilities of a company as reflected in the company’s most recent financial statements.
3. Financial sponsorship. Financial sponsorship must be a collectable financial guarantee by one person (a sponsor) to another, (the
beneficiary).

Financial sponsorship must be:

• A determined amount to support operations of the contractor concerned in order to complete projects. Any sponsorship from another
• company other than a financial institution may not exceed 15% of the sponsor’s net asset value;
• Available to the beneficiary as and when required;
• If applicable, it must be available to a third person, such as a bank, to advance funds or such as a supplier, to advance a line of credit;
• If applicable, it must be in a form acceptable to any financial institution in South Africa as defined in the Financial Services Board Act,
• 97 of 1990; and

Please note that:
a) where the sponsor is a registered contractor or owns 50 percent or more of the applicant contractor, sponsorship may constitute
up to 100 percent of the total required available capital;
b) where the sponsor is not a registered contractor and owns 25 percent or more of the applicant contractor, sponsorship may not
exceed 75 percent of the total required available capital; and
c) where the contractor is not a registered contractor and the sponsor owns less than 25 percent of the applicant contractor,
sponsorship may not exceed 50 percent of the total required available capital.

B. Works capability requirements explained:

Works capability is determined by:

• The largest contract undertaken and completed in the relevant class of construction works within the 5 years immediately preceding
the application;
• The total number of full time registered professionals employed
• The fulfilment of relevant statutory requirements.

Types of grading methods used:
There are two methods that a contractor’s grade may be assessed on:

• Method A is based on financial capacity and works capability and is applicable to all grades.

• Method B is based on available capital and the number of registered professionals employed and is only applicable for grades 5 – 9.
(There are no turnover and track record requirements for Method B). The requirement for available capital and registered professionals
for Method B is higher than the requirement for Method A.

• The contractor must employ the minimum number of registered professionals permanently (full time) or the equivalent number of
persons on a part time basis (totalling 40 hours a week).
• The “full-time equivalent” means that, for example, two part time engineers, each working 20 hours a week, would equal one
full-time engineer.
• A registered professional is recognised by virtue of his or her training and experience as having the necessary qualifications to undertake
construction works in a specific class. All registered professionals (e.g. architects, quantity surveyors, etc.) employed by a contractor are
required to be registered with relevant built environment councils.

Source information:
http://www.cidb.org.za/documents/kc/cidb_publications/brochures/brochure_contractor_registration_guidelines.pdf

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About George Harris

I started my incredible journey at Leads 2 Business in 2006. I am the Content Director, custodian of an amazing research team responsible for unearthing hidden gems of information.

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