L2B Blog: CIDB Grading (How it works)

CIDB Grading (How it works)

CIDB Grading (How it works)

 

Today, I will be chatting about CIDB and how it works. Yes, I know…CIDB, what? Let me assure you that when I first started at Leads 2 Business I had no clue what CIDB was, what it stood for or how it even worked. Rest assured though, I will go slow.

 

Definition: CIDB

Construction Industry Development Board. Big words, I know, but all it means Construction companies that are required to be registered to CIDB for numerous types of construction work. That is correct. So if you are an owner of a Construction Company and you are applying for tenders, you need to be registered under the Construction Industry Development Board in order to qualify for the necessary requirements for a tender.

 

Many times in the Construction Industry, when Municipalities are advertising tenders, one of the requirements are being registered under CIDB.

Alright, now that we know what CIDB is, let us have a look at the CIDB Class of Construction works that fall under CIDB. There are about twenty different Classes of Construction Works. Do not worry…I will not bore you with all the details. I am simply going to list them:

Class of Construction Works:
  1. GB – General Building
  2. CE – Civil Engineering
  3. EB – Electrical Engineering Works – Building
  4. EP – Electrical Engineering Works – Infrastructure
  5. ME – Mechanical Engineering
  6. SB – Asphalt Works (Supply and Lay)
  7. SC – Building Excavations, shaft sinking, lateral earth ear support
  8. SD – Corrosion Protection (cathodic, anodic and electrolytic)
  9. SE – Demolition and Blasting
  10. SF – Fire prevention and Protective systems
  11. SG – Glazing, curtain walls and shoplifts
  12. SH – Landscaping, irrigation and horticulture works
  13. SI – Lifts, escalators and travellators (installation, commissioning and maintenance)
  14. SJ – Piling and Specialised foundations for buildings and structures
  15. SK – Road marking and signage
  16. SL – Structural steelwork fabrication and erection
  17. SM – Timber buildings and structures
  18. SN – Waterproofing of basements, roofs and walls using specialised systems
  19. SO – Water Supply and drainage for building (wet services, plumbing)
  20. SQ – Steel security fencing or precast concrete

 

Now we are going to take a look at the Values of the Rating for CIDB gradings.

Here they are:

CIDB 1: R 0 – R 200.000

CIDB 2: R 200.00 – R 650.00

CIDB 3: R650.00 – R 2 Million

CIDB 4: R 2 Million – R 4 Million

CIDB 5: R 4 Million – R 6.5 Million

CIDB 6: R 6.5 Million – R 13 Million

CIDB 7: R 13 Million – R 40 Million

CIDB 8: R 40 Million – R 130 Million

CIDB 9: R130 Million Plus

Okay, that was quite a mouthful. The Class of Construction works is basically an indication of what your business does.

Now we will take a look at how your company determines their grading. This is called the Grading Designation Calculator and can be done on the CIDB Website. All that is required of your business is the financial documents. Well, you are looking at your Profit and Loss for the Financial Year, the largest contract value that was awarded to your company and you will also need the capital value of the business.

Below is an example of a how a Grading Designartion Calculator is done. Trust me, it really simple and just takes a few minutes:

 

 

Please note that the CIDB is only for Construction Companies that do Construction work for non–residential areas. That would be your Office Buildings, General Building and Maintenace of government property (Hospitals, Fire Stations, Municipal Buildings, etc).

Construction companies that deal with Residential areas, your company has to be registered under the National Home Building Council (NHBRC). The NHBRC is very different from CIDB in the sense that, the Construction Company has to prove to the NHBRC the number of houses they have built to date.

To register on CIDB, it is very simple. All you need to do is submit an application and select the applicable Grade. The construction company also needs to indicate the maximum value of work permissible in their registered grading level. There are different requirements for track record and financial capability depending on the grades and classes. The application criteria need to meet both the requirements in order to satisfy the grading assessment criteria. The CIDB Provincial Offices offer free help desk support to contractors.

The application only takes 21 working days to be registered. The 21 day waiting period is the turnaround time for applications that are complete and compliant with the requirements of the grade the contractor is applying for. Grade 1 applicants only take 48 hours to be processed and for registration to reflect on CIDB. Once the 21 working days have passed and the contractor is compliant, the contractor is then registered on the CIDB website and now have access to tender opportunities that are in their CIDB grading. In order to register you can go to the CIDB Website:

 

Note: Your registration expires after 3 years

 

CIDB also publishes tenders that have been awarded on the system. That would mean if a contractor has applied for a specific tender, and once that tender has been awarded, one of the first places it gets published is on the CIDB website. Here, the name of the Awarded Company has listed as well as the contract value and the contract period. Below is an example of what the Award Information looks like:

 

 

Alright, so that concludes my discussion for the day. I must admit that it was quite fun sharing my information with you today. I can only hope that somewhere out there, a subscriber has learned something new today, I know I did.

 

Sources:

http://registers.cidb.org.za/PublicContractors/GradingDesignationCalc

http://registers.cidb.org.za/PublicTenders/TenderSearch

http://www.cidb.org.za/publications/Pages/Application-Forms.aspx

 

 

If you are interested in becoming one of our subscribers, please visit our website.

To view notes with screenshots on how to use our website, please visit our Wiki site.

To view more articles, please visit our blog.

 

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About Lauren Davids

I am a Content Researcher for the Western Cape Region in the Tenders South Africa Department.

Tenders by CIDB – What do you need to get the job?

What do you need to get the job?

cidb-what-you-need-to-get-the-job

The Construction Industry Development Board (cidb) – a Schedule 3A public entity – was established by Act of Parliament (Act 38 of 2000) to promote a regulatory and developmental framework that builds:

  • Construction industry delivery capability for South Africa’s social and economic growth.
  • A proudly South African construction industry that delivers to globally competitive standards.

The cidb’s focus is on

  • Sustainable growth, capacity development and empowerment
  • Improved industry performance and best practice
  • A transformed industry, underpinned by consistent and ethical procurement practices
    Enhanced value to clients and society

 

Construction companies is South Africa are required to register with the CIDB for various classes of construction works, if they want to be awarded Government tenders, and are assigned ratings based on their financial capability. CIDB ratings, when required, are listed on tender notices and perform two functions: The most obvious being that if a company is not registered in that particular rating or class of work then that company can not be awarded that contract (unless they form a Joint Venture); and the second is that the Rating gives a estimated value for the contract concerned. This is helpful for subcontractors to determine whether it is worth their while to approach those companies tendering.

 

Below is a breakdown of the various Construction works and how the various ratings are determined:

 

Class of Construction Works

 

GB General Building

CE Civil Engineering

EB Electrical Engineering Works – Building

EP Electrical Engineering Works – Infrastructure

ME Mechanical Engineering

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 horticulture works

SI Lifts, escalators and travellators (installation, commissioning and maintenance)

SJ Piling and specialised foundations for building and structures

SK Road markings and signage

SL Structural steelwork fabrication and erection

SM Timber buildings and structures

SN Waterproofing of basements, roofs and walls using specialist systems

SO Water supply and drainage for buildings (wet services, plumbing)

SQ Steel security fencing or precast concrete

 

Class of Construction Works

 

Civil Engineering (CE): Construction Works primarily concerned with materials such as steel, concrete, earth and rock and their application in the development, extension, installation, maintenance, removal, renovation, alteration, or dismantling of building and engineering infrastructure.

Basic Work Types: Water, sewerage, roads, railways, harbours and transport, urban development and municipal services.

Examples: Structures such as cooling tower, bridge culvert, dam, grand stand, road, railway, reservoir, runway, swimming pool, silo or tunnel. The results of operations such as dredging, earthworks and geotechnical processes. Township services, water treatment and supply, sewerage works, sanitation, soil conservation works, irrigation works, storm-water and drainage works, coastal  works, ports, harbours, airports and pipelines.

 

Electrical Engineering Works – Building (EB): Construction Works that are primarily concerned with the installation, extension, modification or repair of electrical installations in or on any premises used for the transmission of electricity from a point of control to a point of consumption, including any article forming part of such an installation

Basic Work Types: All electrical equipment forming an integral and permanent part of buildings and/or structures, including any wiring, cable jointing and laying and electrical overhead line construction.

Examples: Electrical installations in buildings. Electrical reticulations within a plot of land (erf) or building site. Standby plant and uninterrupted power supply. Verification and certification of electrical installations on premises.

 

Electrical Engineering Works – Infrastructure (EP): Construction Works that are primarily concerned with development, extension, installation, removal, renovation, alteration or dismantling of engineering infrastructure: a) relating to the generation, transmission and distribution of electricity; or b) which cannot be classified as EB.

Basic Work Types: Electrical power generation, transmission, control and distribution equipment and systems

Examples: Power generation. Street and area lighting. Substations and protection systems. Township reticulations. Transmission lines

 

General Building Works (GB): Construction Works that: a) are primarily concerned with the development, extension, installation, renewal, renovation, alteration, or dismantling of a permanent shelter for its occupants or contents; or b) cannot be categorised in terms of the definitions provided for civil engineering works, electrical engineering works, mechanical engineering works, or specialist works.

Basic Work Types: Building and ancillary works other than those categorised as: Civil engineering works; Electrical engineering works; Mechanical engineering works; Specialist works.

Examples: Buildings for domestic, industrial, institutional or commercial occupancies. Car ports. Stores. Walls.

 

Mechanical Engineering Works (ME): Construction Works that are primarily concerned with the development, extension, installation, removal, alteration, renewal of engineering infrastructure for gas transmission and distribution, solid waste disposal, heating, ventilation and cooling, chemical works, metallurgical works, manufacturing, food processing and materials handling.

Basic Work Types: Machine systems including those relating to the environment of building interiors. Gas transmission and distribution systems. Pipelines. Materials handling, lifting machinery, heating, ventilation and cooling, pumps. Continuous process systems, chemical works, metallurgical works, manufacturing, food processing such as that in concentrator machinery and apparatus, oil and gas wells, smelters, cyanide plants, acid plants, metallurgical machinery, equipment and apparatus, and works necessary for the beneficiation of metals, minerals, rocks, petroleum and organic substances or other chemical processes.

Examples: Air-conditioning and mechanical ventilation. Boiler installations and steam distribution. Central heating. Centralised hot water generation. Compressed air, gas and vacuum installations. Conveyor and materials handling installations. Continuous process systems involving chemical works, metallurgical works, oil and gas wells, acid plants, metallurgical machinery, equipment and apparatus, and works necessary for the beneficiation of metals, minerals, rocks, petroleum and organic substance and other chemical processes. Dust and sawdust extraction. Kitchen equipment. Laundry equipment. Refrigeration and cold rooms. Waste handling systems (including compactors)

 

Specialist Works

 

SB: The extension, installation, repair, maintenance or renewal, or removal of asphalt.

SJ: The development, installation, removal, or dismantling, as relevant, of piles and other specialised foundations for buildings and structures.

SC: The development, extension, installation, removal and dismantling, as relevant, associated with building excavations, shaft sinking and lateral earth support.

SK: The installation, renewal, removal, alteration or dismantling, as relevant, of road markings and signage.

SD: The development, extension, installation, repair, renewal, removal or alteration of corrosion protection systems (cathodic, anodic and electrolytic).

SL: The development, extension, installation, renewal, removal, renovation, alteration or dismantling of structural steelwork and scaffolding.

SE: Demolition of buildings and engineering infrastructure and blasting.

SM: Timber buildings and structures.

SF: The development, extension, installation, renewal, removal, renovation, alteration or dismantling of fire prevention and protection infrastructure (drencher and sprinkler systems and fire installation).

SN: The extension, installation, repair, maintenance, renewal, removal, renovation or alteration, as relevant, of the waterproofing of basements, roofs and walls using specialist systems.

SG: The development, extension, installation, renewal, removal, renovation, alteration or dismantling of glazing, curtain walls and shop fronts.

SO: The development, extension, installation, renewal, removal, alteration, or dismantling or demolition of water installations and soil and waste water drainage associated with buildings (wet services and plumbing).

SH: The development, extension, installation, maintenance, renewal, removal, alteration or dismantling, as relevant, of landscaping, irrigation and horticultural works.

SQ: The development, extension, installation, repairs, dismantling of precast walls, installation of wire perimeter fencing, diamond perimeter fencing, palisade steel fencing with posts and stay at intervals.

SI: The development, extension, installation, repair, maintenance, renewal, removal, renovation, alteration or dismantling of lifts, escalators, travellators and hoisting machinery

 

How contractor grading designations are determined

 

Your contractor grading designation is determined by your financial capability and your works capability.

 

Your financial capability relates to your financial history (turnover), and the amount of working capital you can muster to sustain a contract, i.e. available capital. Available capital is the sum of total equity, retained income, shareholders or member’s loans and any form of acceptable financial sponsorship.

 

Your works capability is determined by the largest contract you have undertaken and completed in your class of construction works (completed during the 5 years immediately preceding the application).

 

Your contractor grading designation will be used by Government (national, provincial, municipal and state owned enterprises) to qualify your tender to be considered for a particular construction works contract. For example: if you are registered as a 5CE, you will be considered for public sector civil engineering works contracts of a value not exceeding R6.5 million. You may register for different classes of works, for example, you may be registered as a 5CE and as an 8ME. This means that you will also be considered for public sector mechanical engineering works contracts of a value not exceeding R130 million.

 

Determining Financial Capability

The specific requirements that need to be satisfied in respect of the contractor grading designation being applied for, depending on the contractor grading designation applied for, financial capability will be determined from:

  • best turnover from the two financial years immediately preceding the application;
  • the available capital that you are able to mobilise;
  • the contractor must satisfy all the criteria relating to financial capability.

 

 

Determining Works Capability

The specific requirements that you need to satisfy in respect of the contractor grading designation applied are:

 

Designation

Grade 2: Must have completed a contract with the value of not less than R130 000.

Grade 3: Must have completed a contract with the value of not less than R450 000 and either have best turnover not less than R1 000 000 or have available capital not less than R100 000.

Grade 4: Must have completed a contract with the value of not less than R900 000 and either have best  turnover not less than R2 000 000 or have available capital not less than R200 000.

Grade 5 and higher: Must have works and financial capability not less than that tabulated in Table C(i) below, for the  contractor grading designation applied for.

 

Determining Financial Capability

 

 

Potentially Emerging Enterprises

 

A registered, potentially emerging contractor may be awarded a contract at one level higher than the enterprise’s registered contractor grading designation, if the client or 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 – in the context of a targeted development programme

  • to enable the contractor to successfully execute that contract.

 

Joint Ventures

 

A joint venture is a grouping of two or more contractors who jointly undertake to perform a construction works contract.

 

Any enterprise that tenders or enters into a contract for construction works with the public sector, must be registered.

Once-off joint ventures do not have to register. Each partner of the joint venture must be separately registered and the lead partner must have a contractor grading designation not lower than one level below the required grading designation in the class of construction works under consideration.

 

The contractor grading designation for a once-off joint venture is assessed by the client, based on:

 

the sum of the best annual turnover of all the members of the joint venture;

the sum of the available capital of all the members of the joint venture; and

The cidb has developed a calculator to enable assessment of joint ventures. This calculator is available on the cidb website at www.cidb.org.za

 

Leads 2 Business subscribers have the option to filter by CIDB ratings as well as set up their Advisory settings, so they only receive the Ratings that they are interested in. My advice in this regard, would be to go “one above and one below”. The idea of the CIDB ratings is progression. New companies start out with a CIDB 1 and as the company grows in experience and financial standing, they would progress up the ratings. So a subscriber would select “one above” (as in a Rating above their current Rating) and select “one below” to make sure that they are notified of any tenders where only the PE (Potentially Emerging) rating has been specified on the tender. Keeping an eye on the next rung up the ladder, but ensuring your foot is still firmly in place on the rung below (if you like metaphors).

 

 

Examples of  tender notices of various CIDB Ratings and Classes:

 

CIDB 1: Upgrading of School Ablution Facilities – DTA 609616

CIDB 2: Supply, Deliver and Erect 6000m wire Barbed Wire Fencing for Bambanani co-op – DTA 609446

CIDB 3: Construction of a bridge at Alberton Campus – DTA 609447

CIDB 4: Construction of a large Ablution block at Thusego Intermediate School – DTA 609710

CIDB 5: Replacement and Maintenance of Traffic Signal Equipment  – DTA 609486

CIDB 6: Resurface and Upgrade Boksburg Athletics Grounds – DTA 609500

CIDB 7: Upgrade and Extension of the Warrenton WTP (Civil, Mechanical, Electrical and C&I) – DTA 609603

CIDB 8: Reseal of National Route N1 Section 29 between Km 70 and Musina – DTA 608049

CIDB 9: Observatory Forensic Pathology Laboratory: Replacement – DTA 609086

 

 

CIDB http://www.cidb.org.za

 

cidb HELPLINE

086 100 2432

 

Construction Industry Development Board Act, 2000 (Act No 38 of 2000) http://www.cidb.org.za/publications/Pages/Legislation.aspx

 

Application for Contractor Registration Grade 1 (July 2016)

http://www.cidb.org.za/publications/Documents/Application%20for%20Contractor%20Registration%20Grade%201%20(July%202016).pdf

 

Application for Contractor Registration Grade 2 – 9 (July 2016)

http://www.cidb.org.za/publications/Documents/Application%20for%20Contractor%20Registration%20Grade%202%20-%209%20(July%202016).pdf

If you are interested in becoming one of our subscribers, please visit our website.
To view notes with screenshots on how to use our website, please visit our Wiki site.
To view more articles, please visit our blog.

Please follow and like us:

About Claire Donaldson

I started working at Leads 2 Business in February 2005, and have served as Head of Department of Daily Tenders from 2007 until the present. I oversee both the Daily Tenders South Africa and Africa Departments.