Following extensive engagement with government and private sector stakeholders, the Construction Industry Development Board (CIDB) has launched the Best Practice Standards, which set a benchmark for construction development and establish accepted performance indicators for an industry recently characterised by private sector collusion and allegations of improper construction permitting.
The standards, which kick-started Phase 2 of the Register of Contractors and Register of Projects, would precede the issuance of the Best Practice Contractor Recognition and Best Practice Project Assessment Schemes, and aimed to incorporate construction criteria and prescribe the developmental and transformational responsibilities of contractors working on public sector projects.
The CIDB stated at a launch ceremony, in Pretoria, on Tuesday that it intended to have the standards for the Best Practice Project Assessment Scheme regulated next year, making their application mandatory for public sector clients.
Currently, while only the CIDB Standard for Uniformity in Construction Procurement was mandatory in the public sector, the board also intended to recognise contractors in terms of the new standards for the Best Practise Contractor Recognition Scheme next year.
“This scheme must enable organs of State to manage risks on complex contracting strategies and promote contractor development,” commented CIDB chairperson Bafana Ndendwa.
Public Works Minister Thembelani Nxesi said at the launch that the success of government’s R1-trillion five-year infrastructure plan remained contingent on the timeous delivery of high-quality build projects by the private sector.
“All too often, we have seen examples of poor-quality construction, contractors failing to deliver, excessive price escalations and – dare I say it – collusion, which the CIDB estimates has cost the country around R4-billion a year,” he said.
Adding that government was dependent on the “vital” construction sector for job creation and growth, Nxesi called on construction firms to embrace the new standards in an effort to drive development and transformation.
“I call on all parties to cooperate with the CIDB as the body specifically charged by law to regulate and maintain ethical standards in the industry. Help them to do their job,” he said.
The Minister held that the Best Practice Standards were aimed at matching the needs of the client – in this case the State – with the abilities of the contractor and were expected to create some R5-billion of development support a year for small, medium-sized and micro enterprise contractors.
In addition, some 3 000 learning opportunities would be created a year on government construction projects.
Nxesi noted that, while the standards were currently voluntary, the Department of Public Works was working with the CIDB to introduce regulations that would render the standards mandatory on public sector projects by 2014.
“However, I encourage public sector clients, in particular, to adopt these standards now and incorporate them into their conditions of contract,” he added.
The newly gazetted construction standards comprised four benchmarks: the Standard for Uniformity in Construction Procurement, the Standard for Developing Skills through Infrastructure Contracts, the Standard for Indirect Targeting for Enterprise Development through Construction Works Contracts and the Standard for Contractor Performance Reports.
The Standard for Uniformity in Construction Procurement established requirements within the construction industry that were aimed at bringing about standardisation and uniformity in construction procurement documentation, practices and procedures.
First published as a regulation in 2004, it mandated public sector clients to use the CIDB Register of Contractors when awarding construction contracts, advertise construction tenders on the board’s online tender portal and register projects on the CIDB Register of Projects.
It further recommended the exclusive use of the New Engineering Contract, the General Conditions of Contract for Construction Works or contracts published by the Joint Buildings Contract Committee and the International Federation of Consulting Engineers.
The Standard for Developing Skills through Infrastructure Contracts provided for the workplace training of interns and the upskilling of company employees in programmes, which resulted in “nationally accredited outcomes”.
It mandated that 0.5% of the tender value of general building contracts and 0.25% of the tender value of civil engineering contracts be allocated to workplace training on public sector contracts in CIDB grades seven to nine.
Issued in terms of the CIDB Best Practice Project Assessment Scheme, the CIDB and the Department of Higher Education and Training aimed to establish the standard as mandatory on selected State contracts, including strategic infrastructure projects, by early next year.
Applicable to public sector contracts in CIDB grades seven to nine, the Standard for Indirect Targeting for Enterprise Development through Construction Works Contracts provided for the development of emerging contractors on public sector projects through subcontracting and joint ventures (JVs).
It required the lead partner or primary contractor to dedicate a minimum of 5% of the total project value to providing development support to the subcontractor or the JV partner.
Also targeted for implementation in 2014, the Standard for Contractor Performance Reports provided for a consistent method of assessment of the performance of contractor’s in CIDB grades two to nine, particularly in terms of time management, cost, quality, health and safety, site conditions and subcontractors.
“Contractor performance reports would also include a record of any breaches of contract, such as those resulting in the termination or cancelation of a contract, as well as noncompliance with mandatory CIDB best practices,” the board stated.
IN THE PIPELINE
In addition to the Best Practice Standards launched on Monday, two additional standards, namely the Minimum Requirements for Engaging Subcontractors on Construction Work Contracts and the Competence Standard for Contractors, were currently in development.
The first would require employers to verify in the tender document the existence of a written contract between the contractor and the subcontractor; confirm that subcontractors were in possession of a valid Tax Clearance Certificate and ensure that subcontractors complied with the requirements of the Skills Levies Act, the Unemployment Insurance Fund Act and the Compensation for Occupational Injuries and Diseases Act.
Meanwhile, the Competence Standard for Contractors provided for acceptable minimum competence standards for “running” a contracting enterprise and supervising building and construction works.
This standard would apply to contractors in the general building and civil engineering work classes, as well as to selected artisanal categories in the special works class.
Edited by: Tracy Hancock