VOLUME 9: INFRASTRUCTURE AND CONSTRUCTION PROCUREMENT

VOLUME 9:

INFRASTRUCTURE AND CONSTRUCTION

PROCUREMENT

Prepared for the North West Province

48. ALIGNMENT WITH SCM FOR GENERAL GOODS AND SERVICES

The SCM System provides for two parts addressing General Goods and Services and Infrastructure and Construction

Procurement. The latter has be read and applied together with the Standard for Construction Procurement and the Standard for

Infrastructure Procurement.

When applying the SCM System in relation to infrastructure and construction, this Module will have to be applied and aligned with

other parts of the SCM System as follows:

Terminology

Legislative Environment.

Overall Objectives.

Procurement principles.

Planning

SCM functions, unit ad capacity building

Authority to execute.

Roles and responsibilities.

SCM Governance.

Establishment and management of Bid Committees.

Needs analysis.

Database of suppliers.

Deviations.

Emergency procurement.

Organs of State.

Unsolicited bids.

Grants.

Contract management.

Asset Management.

Disposal Management.

Risk Management.

SCM Performance Review

Reporting of Supply Chain Management Information.

Safeguarding of SCM Information.

49. CIDB


Construction Industry Development Board Act (CIDBA), 2000 (Act 38 of 2000)

According to section 22 of the Bill of Rights in the Constitution, 1996, every citizen has the right to choose their trade,

occupation or profession freely.

Certain government Departments, for example the provincial Department of Transport and Public Works, are mandated to

deliver economic and social infrastructure, such as roads, school buildings, hospital buildings and general office buildings and

to maintain these immoveable assets. In the execution of its mandate such a government Department contracts with services

providers from the construction industry.

Although access to contract opportunities has been widely promoted by government, the sustainability of small contractors is

perceived to be jeopardised by, inter alia: some public sector employees that are not committed to procurement reform;

complicated tender documentation; lack of standardisation within the public sector and the awarding of contracts to the lowest

bidder that affects the sustainability of real contractors.

The Construction Industry Development Board (CIDB), a national body established by the CIDBA, 2000 is, inter alia,

responsible for developing the industry for the improved delivery of infrastructure to the South African public; working with all

stakeholders for the sustainable growth of construction enterprises and the best practice of employers, contractors and the

professions; identifying best practice and setting national standards; and promoting common and ethical standards for

construction delivery and contracts.

Taking a closer view at the powers, functions and duties of the CIDB in relation to SCM matters, one comes to the realisation

that this body affects the procurement processes of applicable government Departments significantly. The powers, functions

and duties include, inter alia, the following:

a. To provide strategic leadership, the CIDB must promote and implement policies, programmes and projects aimed

at, amongst others, procurement reform, standardisation and uniformity in procurement documentation, practices

and procedures.

b. To advance the uniform application of policy with regard to the construction industry, the CIDB must within the

framework of the procurement policy of government promote the standardisation of the procurement process with

regard to the construction industry.

c. To promote uniform and ethical standards within the construction industry, the CIDB must publish a code of

conduct for all construction related procurement and all participants involved in the procurement process.

Furthermore, the CIDB may in this context initiate, promote and implement national programmes and projects

aimed at the standardisation of procurement documentation, practices and procedures.

d. To promote sustainable growth of the construction industry and the participation of the emerging sector therein,


the CIDB may monitor national programmes aimed at amongst other procurement reform and standardisation

and uniformity in procurement documentation, practices and procedures.

Furthermore, the CIDBA, 2000 requires that the national Minister responsible for Public Works must prescribe the manner in

which public sector construction contracts may be invited, awarded and managed within the framework of the Register of

Contractors and within the framework of the policy on procurement. It also requires that every government Department, must,

subject to the policy on procurement, apply the Register of Contractors to its procurement process.

From the above it is clear that SCM is regulated by two main authorities, namely the National Treasury for general goods and

services and the Construction Industry Development Board for infrastructure procurement.

The CIDB also maintain its own website which provides for a:

a. Compendium of relevant Legislation

b. Application of the Construction Register

c. Compendium of relevant CIDB practice notes

Table 25-CIDB Compendium of Legislation

Act Name Act Number & Year Responsible Ministry Category

Abolition of Certain Title Conditions Act, 1999 Act 43 of 1999

Housing Specific to the Construction Industry

Adult Basic Education and Training Act, 2000 Act 52 of 2000

Education Other Relevant Legislation

Arbitration Act, 1965 Act 42 of 1965

Justice Other Relevant Legislation

Architectural Profession Act, 2000 Act 44 of 2000

Public Works Specific to the Construction Industry

Atmospheric Pollution Prevention Act, 1965 Act 45 of 1965

Environmental Affairs and Tourism Indirectly Impacting the Construction

Industry

Basic Conditions of Employment Act, 1997 Act 75 of 1997

Labour Directly Impacting the Construction Industry

Bill of Rights - Constitution of the Republic of South Africa (Chapter 2), 1996 Act 108 of 1996

Justice

Other Relevant Legislation

Board on Tarriffs and Trade Act, 1986 Act 107 of 1986

Trade and Industry Other Relevant Legislation

Broad-Based Black Economic Empowerment Act, 2003 Act 53 of 2003

Trade and Industry Directly Impacting the Construction Industry

Business Act, 1991 Act 71 of 1991

Trade and Industry Indirectly Impacting the Construction

Industry

Business Names Act, 1960 Act 27 of 1960


Close Corporations Act, 1984 Act 69 of 1984

Finance Indirectly Impacting the Construction

Industry

Communal Land Rights Act, 2004 Act 11 of 2004

Land Affairs Directly Impacting the Construction Industry

Communal Property Associations Act, 1996 Act 28 of 1996


Companies Act, 1973 Act 61 of 1973


Industry

Compensation for Occupational Injuries and Diseases Act, 1993 Act 130 of 1993


http://www.cidb.org.za/Compendium_Legislation/Legislation/act43of1999.pdf


















Competition Act, 1998 Act 89 of 1998

Trade and Industry Directly Impacting the Construction Industry

Constitution of the Republic of South Africa, 1996 Act 108 of 1996


Construction Industry Development Board Act, 2000 Act 38 of 2000


Consumer Affairs (Unfair Business Practices) Act, 1988 Act 71 of 1988


Industry

Convention on Agency in the International Sale of Goods Act, 1986 Act 4 of 1986


Conventional Penalties Act, 1962 Act 15 of 1962


Conversion of SASRIA Act, 1998 Act 134 of 1998

Justice Indirectly Impacting the Construction

Industry

Copyright Act, 1978 Act 98 of 1978


Council for the Built Environment Act, 2000 Act 43 of 2000


Counterfeit Goods Act, 1997 Act 37 of 1997


Credit Agreements Act, 1980 Act 75 of 1980


Industry

Customs and Excise Act, 1964 Act 91 of 1964

Customs and Excise Other Relevant Legislation

Deeds Registries Act, 1937 Act 47 of 1937


Designs Act, 1993 Act 195 of 1993


Industry

Development Facilitation Act, 1995 Act 67 of 1995

Trade and Industry Specific to the Construction Industry

Employment Equity Act, 1998 Act 55 of 1998


Engineering Profession Act, 2000 Act 46 of 2000


Environment Conservation Act, 1989 Act 73 of 1989

Environmental Affairs and Tourism Directly Impacting the Construction Industry

Estate Agency Affairs Act, 1976 Act 112 of 1976


Explosives Act, 2003 Act 15 of 2003

Safety and Security Directly Impacting the Construction Industry

Export Credit and Foreign Investments Insurance Act, 1957 Act 78 of 1957


Expropriation Act, 1975 Act 63 of 1975


Industry

Extension of Security of Tenure Act, 1997 Act 62 of 1997


Fencing Act, 1963 Act 31 of 1963


Further Education and Training Act, 1998 Act 98 of 1998


General and Further Education and Training Quality Assurance Act, 2001 Act 58 of 2001

Education

Other Relevant Legislation

Harbour Construction Act, 1972 Act 28 of 1972

Transport Specific to the Construction Industry

Hazardous Substances Act, 1973 Act 15 of 1973


Industry

Higher Education Act,1997 Act 101 of 1997


Housing Act, 1997 Act 107 of 1997


Housing Consumers Protection Measures Act, 1998 Act 95 of 1998


Housing Development Schemes for Retired Persons Act, 1988 Act 65 of 1988


Identification Act, 1997 Act 68 of 1997

Home Affairs Other Relevant Legislation




































Immigration Act, 2002 Act 13 of 2002


Import and Export Control Act, 1963 Act 45 of 1963


Income Tax Act, 1962 Act 58 of 1962


Industry

Industrial Development Act, 1940 Act 22 of 1940


Insider Trading Act, 1998 (Repealed) Act 135 of 1998


Industry

International Convention for Safe Containers Act, 1985 Act 11 of 1985


Labour Relations Act, 1995 Act 66 of 1995


Land Administration Act, 1995 Act 2 of 1995


Land Affairs Act, 1987 Act 101 of 1987


Land Survey Act, 1997 Act 8 of 1997


Landscape Architectural Profession Act, 2000 Act 45 of 2000


Local Government Transitional Act, 1993 Act 209 of 1993

Provincial and Local Government Directly Impacting the Construction Industry

Manufacturing Development Act, 1993 Act 187 of 1993


Measuring Units and National Measuring Standards Act, 1973 Act 76 of 1973


Medical Schemes Act, 1998 Act 131 of 1998

Health Indirectly Impacting the Construction

Industry

Merchandise Marks Act, 1941 Act 17 of 1941


Mine Health and Safety Act, 1996 Act 29 of 1996

Minerals and Energy Indirectly Impacting the Construction

Industry

Mineral and Petroleum Resources Development Act, 2002 Act 28 of 2002

Minerals and Energy Directly Impacting the Construction Industry

Municipal Demarcation Act, 1998 Act 27 of 1998


Municipal Finance Mangement Act, 2003 Act 56 of 2003


Industry

Municipal Property Rates Act, 2004 Act 6 of 2004

Provincial and Local Government Specific to the Construction Industry

Municipal Structures Act, 1998 Act 117 of 1998

Provincial and Local Government Specific to the Construction Industry

Municipal Systems Amendment Act, 2003 Act 44 of 2003


National Building Regulations and Building Standards Act, 1977 Act 103 of 1977


National Education Policy Act, 1996 Act 27 of 1996


National Empowerment Fund Act, 1998 Act 105 of 1998


National Environmental Management Act, 1998 Act 107 of 1998

Environmental Affairs and Tourism Directly Impacting the Construction Industry

National Health Act, 2003 Act 61 of 2003

Health Indirectly Impacting the Construction

Industry

National Heritage Resources Act, 1999 Act 25 of 1999

Arts Culture Science and

Technology Other Relevant Legislation

National Roads Act, 1971 Act 54 of 1971

Transport Directly Impacting the Construction Industry

National Small Enterprise Act, 1996 Act 102 of 1996


Industry

National Water Act, 1998 Act 36 of 1998


Industry

Occupational Health and Safety Act,1993 Act 85 of 1993 Directly Impacting the Construction Industry




































Labour

Patents Act, 1978 Act 57 of 1978


Physical Planning Act, 1991 Act 125 of 1991

Land Affairs Specific to the Construction Industry

Planning Profession Act, 2002 Act 36 of 2002


Preferential Procurement Policy Framework Act, 2000 Act 5 of 2000

Finance Directly Impacting the Construction Industry

Prevention and Combatting of Corrupt Activities Act, 1994 Act 12 of 2004


Industry

Prevention of Illegal Eviction from Unlawful Occupation of Land Act, 1998 Act 19 of 1998

Housing

Directly Impacting the Construction Industry

Professional and Technical Surveyors' Act, 1984 Act 40 of 1984


Project and Construction Management Professions Act, 2000 Act 48 of 2000


Promotion of Access to Information Act, 2000 Act 2 of 2000


Industry

Promotion of Administrative Justice Act, 2000 Act 3 of 2000


Industry

Promotion of Equality and Prevention of Unfair Discrimination Act, 2000 Act 4 of 2000


Industry

Property Time Sharing Control Act, 1983 Act 75 of 1983


Property Valuers Profession Act, 2000 Act 47 of 2000


Protected Disclosures Act, 2000 Act 26 of 2000


Protection of Businesses Act, 1978 Act 99 of 1978


Industry

Public Finance Management Act, 1999 Act 1 of 1999

Finance Directly Impacting the Construction Industry

Public Holidays Act, 1994 Act 36 of 1994


Public Protector Act, 1994 Act 23 of 1994


Industry

Quantity Surveying Profession Act, 2000 Act 49 of 2000


Reconstruction and Development Programme Fund Act, 1994 Act 7 of 1994

Without Portfolio Other Relevant Legislation

Regional Services Councils Act, 1985 Act 109 of 1985


Rental Housing Act, 1999 Act 50 of 1999


Sales and Service Matters Act, 1964 Act 25 of 1964


Scientific Research Council Act, 1988 Act 46 of 1988

Arts Culture Science and

Technology Directly Impacting the Construction Industry

Sectional Titles Act, 1986 Act 95 of 1986


Share Blocks Control Act, 1980 Act 59 of 1980


Short Term Insurance Act, 1998 Act 53 of 1998


Industry

Skills Development Act, 1998 Act 97 of 1998


Skills Development Levies Act, 1998 Act 9 of 1999


South African Citizenship Act, 1995 Act 88 of 1995


South African National Roads Agency Limited Act, 1998 Act 7 of 1998

Transport Directly Impacting the Construction Industry

South African Qualifications Authority Act, 1995 Act 58 of 1995

Education Directly Impacting the Construction Industry



































South African Revenue Service Act, 1997 Act 34 of 1997


Industry

Standards Act, 1993 Act 29 of 1993


State Land Disposal Act, 1961 Act 48 of 1961

Land Affairs Other Relevant Legislation

State Tender Board Act, 1968 Act 86 of 1968

Legislation that has been repealed Directly Impacting the Construction Industry

Town and Regional Planners Act, 1984 (Repealed) Act 19 of 1984

Legislation that has been repealed Specific to the Construction Industry

Trade Marks Act, 1993 Act 194 of 1993


Trade Metrology, 1973 Act 77 of 1973


Unemployment Insurance Act, 2001 Act 63 of 2001


Unemployment Insurance Contribution Act, 2002 Act 4 of 2002


Usury Act, 1968 Act 73 of 1968

Finance Other Relevant Legislation

Value Added Tax Act, 1991 Act 89 of 1991


Industry

Water Services Act, 1997 Act 108 of 1997


Industry

Construction Register

i-Tender is established by the Construction Industry Development Board (cidb) as part of the national Construction

Registers Service. It gives effect to the national Register of Projects and is electronically linked to the national Register of

Contractors.

iTender enables clients:

to advertise tenders on the ci b website automatically alerting contractors who are registered with cidb, by e-mail

and sms

to register projects by logging award of contracts on the same website

to comply easily with legislative requirements.

i-Tender is provided by the cidb to link supply and demand for the benefit of contractors and clients and to facilitate

construction procurement, client delivery and contractor development.

iTender is a fully electronic national information service.

The basic service is free to clients and registered contractors.

CIDB PRACTICE NOTES

Practice Note Name Description

Practice Note 1: Scaling up Delivery and Accelerating

Empowerment (version 1 - August 2006)

This Practice Note identifies systemic problems in scaling up delivery and accelerating empowerment, and

outlines fresh approaches in contracting strategies that increase the size and duration of contracts to

enable: 1. enhanced delivery and the efficient use of resources; 2. sustainable enterprise growth,

employment, workforce skills development and sustainable empowerment.

Practice Note 2: Correcting Arithmetical Errors in Tenders

(Version 3 – February 2008)

This Practice Note sets out the manner in which arithmetical corrections are to be made in the evaluation of

tenders in accordance with the cidb Standard Conditions of Tender.















Practice Note 3: Applying the Register of Contractors in

Construction Works Contracts (Version 2 -

February 2008)

This Practice Note identifies which contractors need to register, describes the categories of registration, the

contractor grading designations and establishes a step by step procedure to satisfy the requirements of the

regulations (as amended up to 23 November 2007) in relation to quotations, tenders and expressions of

interest.

Practice Note 4: Procuring Best Value in Construction Works

(Version 2 – February 2008)

This Practice Note describes the process that should be followed when seeking to optimise choices that are

made in order to obtain best value. It also outlines the range of options that are available to optimise

procurement outcomes.

Practice Note 5: Evaluating Tender Offers (Version 2 –

February 2008)

This Practice Note sets out the manner in which tender offers are to be evaluated in accordance with

Standard Conditions of Tender when using a competitive selection procedure

Practice Note 6: Competitive Selection of Professional

Service Providers (Version 2 – February

2008)

This Practice Note identifies the fundamental reasons for procuring professional services and the key

considerations in engaging professional service providers. It discusses professional registration with a

statutory body and identifies a number of differentiators between professionals and professional service

providers that form the cornerstone of any competitive selection process.

Practice Note 7: Subcontracting Arrangements (Version 1 -

May 2007)

This Practice Note examines the different types of subcontractors that are encountered in construction

works, namely nominated, selected and domestic. It presents an overview of the subcontracting provision of

the FIDIC, GCC 2004, JBCC Series 2000 and NEC3 standard forms of contract as well as the cidb

registration requirements and other public sector requirements

Practice Note 8: Consultation for Remuneration (Version 1 -

November 2007)

The practice note presents an overview of the different methods that are used to remunerate professional

service providers and indicates, where relevant, how such methods may be reduced to a comparative offer

to enable tenders to be compared.

Practice Note 9: Evaluation of Quality in Tender Submission

(Version 1 - November 2007)

This practice note provides an overview of the manner in which quality may be evaluated in tender

submissions, identifies the circumstances under which quality should be evaluated and provides a practical

procedure to do so.

Practice Note 10: Attaining Social and Economic Deliverables

(Version 1 - February 2008)

This Practice Note discusses a number of targeted procurement procedures relating to the measurement

and quantification of the participation of target groups, the provision of incentives for attaining key

performance indicators in the performance of a contract and the creation of contractual obligations to

engage target groups in the performance of the contract. It also outlines the approach adopted in the cibd

Specification for Social and Economic Deliverables in Construction Works Contracts for the delivery of a

wide range of social and economic deliverables including the employment of local resources, employment

opportunities for labour intensive works, business opportunities, enterprise support and development

programmes and skills development.

Practice Note 11: Programme Management Approach to

Delivery (Version 1 – February 2008)

This Practice Note discusses a delivery model using a programme management approach that enables

allocated budgets to be spent in a manner that results in construction works of an acceptable quality in

response to prioritised needs, whilst contributing to the regional social and economic agenda including

employment and skills development.

Practice Note 12 Competitive Negotiation Procedure This practice note sets out the manner in which tender offers are to be evaluated in accordance with these

Standard Conditions of Tender when using a competitive negotiation procedure.

Practice Note 13: Identifying a Construction Works Contract

(Version 1 - February 2008)

This Practice Note provides guidance on establishing when the register of contractors is to be applied and

identifies which types of construction works contracts are exempted from the application of the Register of

Contractors

Practice Note 14: Selecting a Contractor on a Competitive

Basis (Version 2 - October 2008)

This Practice Note provides guidance on the selection of appropriate criteria for the evaluation of a tender

and the development of pre- qualification criteria to limit the number of submissions that are evaluated and

to minimise the risk that those tenderers who obtain the highest ranking or highest score in the evaluation

process are not qualified to perform the contract



Practice Note 15: Framework Agreements (Version 2 –

October 2008)

This practice note outlines the nature and features of framework agreements, describes the essential

elements of and the selection procedures associated with and identifies the forms of contract that are best

suited to such contracts.

Practice Note 16: Advance Payment (Version 1 – November

2008)

Outlines the provisions for advance payment made in the JBCC Series 2000, FIDIC and NEC forms of

contracts and provides additional conditions of contract for inclusion in GCC 2004 to enable advance

payment to be made in terms of this form of contract.

Practice Note 17: Securing Supplies of Critical Plant and

Materials (Version 1 – November 2008)

This Practice Note identifies the risks to be managed and proposes a number of strategies to mitigate these

risks.

Practice note 18: Cancellation of Tenders (Version 1 - June

2009)

This Practice Note describes the circumstances under which cancelled tenders may be reissued

Practice Note 19: Streamlining Payment Processes (Version 1

- June 2009)

This practice note reviews the three phases of the payment cycle, namely certification, authorisation and

processing, and examines the flow of funds between the client Departments and the implementing agents.

It suggests how organs of state can streamline their certification, authorisation and payment processes to

effect payment to contractors within the stipulated time as per the contract

Practice Note 20: Applying the Register of Contractors to

Fencing (Version 1 - July 2010)

Fences and walls are required to enclose, protect or to divide a space or property. Such construction works

can fall into a number of classes of construction works. This practice notes provides practical guidance on

the identification of an appropriate class of construction works to apply the register of contractors to such

works.

Practice Note 21: Bills of Quantities (Version 1 - August 2010) Bills of Quantities (BoQ) are the most common form of pricing strategy used where the contractor

undertakes construction works on the basis of full designs issued by the employer. This practice note

outlines what a bill of quantities is and provides a recommended procedure for evaluating tenders where the

prices are based on a BoQ. The recommended procedure suggests that a priced BoQ is not included in the

tender submission and is only called for from the highest ranked or scoring tenderer during the tender

evaluation process so that the acceptability of the rates can be confirmed prior to the award of a contract

Practice Note 22a: cidb Infrastructure Gateway System - An

Overview (Version 1 - September 2010)

The cidb Infrastructure Gateway System provides a number of control points (gates) in the infrastructure life

cycle where a decision is required before proceeding from one stage to another. This practice note outlines

the case for and an overview of the gates and stages in the cidb Infrastructure Gateway System.

Practice Note 22b cidb Infrastructure Gateway System -

Stages (Version 1 - August 2010)

The delivery and maintenance of infrastructure needs to be managed and controlled in a logical, methodical

and auditable manner.This practice note outlines the cidb Infrastructure Gateway System which provides a

number of control points (gates) in the infrastructure life cycle where a decision is required before

proceeding from one stage to another. Such decisions need to be based on information that is provided and

if correctly done, provides assurance that a project involving the design and construction, refurbishment or

alteration of infrastructure, the rehabilitation of infrastructure, or the performance of preventative, corrective,

scheduled or routine maintenance remains within agreed mandates, aligns with the purpose for which it was

conceived and can progress successfully from one stage to the next.

Practice Note 23: Construction Procurement Strategy

(Version 1 - September 2010)

Construction procurement strategy is the combination of the delivery management strategy, contracting

arrangements and procurement arrangements for a particular procurement. It necessitates that a number of

choices be made from the available options. A construction procurement strategy can be developed for a

single project, a programme of projects or a portfolio of projects to identify the best way of achieving

objectives and value for money, whilst taking into account risks and constraints. This practice note outlines

a a methodology to develop construction procurement strategies at a portfolio, programme or project level.

Practice Note 24: Managing Construction Procurement

Process (Version 1 - September 2010)

This practice note highlights the legislative requirements for managing and controlling procurement

processes and suggests how construction procurement processes should be controlled. It also

recommends a number of procurement gates within the procurement process



Practice Note 27: Practice Note 27: Contracting and Pricing

Strategies for Works (Version 1 - August

2011)

This practice note outlines the range of contracting and pricings strategies that are available and indicates

when it is appropriate to apply such strategies]

Practice Note 28: Practice Note 28: Objectives Linked to

Infrastructure Delivery (Version 1 -

December 2011)

This practicCDPs).e note indicates the nature of a number of objectives that are encountered in the CIDB

Infrastructure Gateway System and the development of a construction procurement strategy.

Practice Note 29 Allocating Sustainable Work Opportunities

to Contractor Development Programmes

(Version 1 – July 2012

This practice note aims to demystify perceptions around set ‘asides’ and ‘ringfencing’ which may hinder

provision of work opportunities to contractors enrolled within Contractor Development Programmes

Practice Note 30: Blacklisting of Contractors for Non-

Performance (May 2013)

This Practice Note discusses actions that organs of state can take against contractors for non-performance.

The Practice Note concludes that all issues of non-performance of contractors on contracts issued by

organs of state should first be dealt with in terms of the contractual procedures between the employer and

the contractor, and should thereafter be referred to the cidb in terms of a potential breach of the cidb Code

of Conduct and not as blacklisting of the contractor on the National Treasury database of restricted

suppliers in terms of Section 13 of the Preferential Procurement Regulations (June 2011).

50. IDMS AND CONSTRUCTION PROCUREMENT PROCESS

System

The Infrastructure Delivery Management System (IDMS) is a government management system for planning, budgeting,

procurement, delivery, maintenance, operation, monitoring and evaluation of infrastructure. It comprises a set of interrelating or

interacting elements that establish processes which transform inputs into outputs.

The IDMS comprises the following systems:

a. an infrastructure planning system;

b. an infrastructure gateway systems (IGS);

c. a construction procurement system (CPS);

d. a programme and project management system;

e. an operations and maintenance system

Risks are managed within each of these systems.

The IDMS is designed to be linked to the Medium Term Expenditure Framework (MTEF). It has a strong focus on outcomes, value

for money and the effective and efficient functioning of the procurement and delivery management system in compliance with

relevant legislation. It includes a supply chain management system (SCM) and can be readily integrated into the various systems

that accounting officers and accounting authorities are required to implement.

Infrastructure and Construction procurement processes, methods and procedures:


The following read with the relevant SANS, CIDBA prescripts and the relevant PTI’s and Standards describe processes,

methods and procedures for the establishment within the DEPARTMENT of a construction and infrastructure

procurement system that is fair, equitable, transparent, competitive and cost- effective and:

describes generic procurement processes around which an organization may develop its procurement system;

establishes minimum requirements for the conduct of an organization's employees, agents, board members and office

bearers when engaging in procurement;

establishes the framework for the development of an organization's procurement policy including any preferential

procurement policy;

establishes generic methods and procedures for procurements including those pertaining to disposals; and

provides standard conditions of tender and conditions for the calling for expressions of interest.

Normative references

The following standards contain provisions which, through reference in this text, constitute provisions for infrastructure and

construction procurement. All standards are subject to revision and, since any reference to a standard is deemed to be a

reference to the latest edition of that standard, parties to agreements based on this standard are encouraged to take steps to

ensure the use of the most recent editions of the standards indicated below. Information on currently valid national and

international standards can be obtained from Standards South Africa.

SANS 1914-1, Targeted construction procurement - Part 1: Participation of targeted enterprises.

SANS 1914-2, Targeted construction procurement - Part 2: Participation of targeted partners in joint ventures.

SANS 1914-3, Targeted construction procurement - Part 3: Participation of targeted enterprises and targeted partners in joint ventures.

SANS 1914-4, Targeted construction procurement - Part 4: Participation of targeted enterprises and targeted labor (local resources).

SANS 1914-5, Targeted construction procurement - Part 5: Participation of targeted labor.

SANS 1914-6, Targeted construction procurement - Part 6: Participation of targeted enterprises in concession contracts.

SANS 10396, Implementing preferential construction procurement policies using targeted procurement procedures.

SANS 10403, Formatting and compilation of construction procurement documents.

AS WELL AS THE FOLLOWING BEST PRACTICE LIBRARY REFERENCES FROM THE CIDBA: Best practice guidelines - Procurement policies, procedures and practices


Practice Guide A1 (1001): The Procurement Cycle (Second edition - September 2005)

Practice Guide A2 (1002): Applying the procurement prescripts of the CIDB in the Public Sector (Fourth edition -

September 2005)

Practice Guide A3 (1003): Evaluating Tenders Offers (Second edition - September 2005)

Practice Guide A4 (1004): Evaluating Quality in Tender Submissions (Second edition - August 2006)

Practice Guide A5 (1005): Managing Construction Procurement Risks (First edition - March 2004)

Practice Guide A6 (1006): Applying the Registers to Construction Procurement (Third edition 2006)

Practice Guide A7 (1035): The procurement of professional services (First edition - September 2005)

Practice Guide A8 (1036): Procurement Measures to Develop Registered Contractors (First edition - September 2005)

Preferencing

Practice Guide B1 (1007): Formulating and Implementing Preferential Procurement Policies (First edition - March 2004)

Practice Guide B2 (1008): Methods and Procedures for Implementing Preferential Procurement Policies (First edition -

March 2004)

Procurement documentation

Practice Guide C1 (1009): Preparing Procurement Documents (Second edition - September 2005)

Practice Guide C2 (1010): Choosing an appropriate Form of Contract for Engineering and Construction Works (Second

edition - September 2005)

Practice Guide C3 (1011): Adjudication (Second edition - September 2005)

Joint venture and subcontracting arrangements

Practice Guide D1 (1012): Subcontracting Arrangements (First edition - March 2004)

Practice guide D2 (1013): Joint Venture Arrangements (First edition - March 2004)

a. The following table details the different procurement processes relevant for infrastructure and construction

procurement:

Table 26 - Standard procurement procedures

Designation Description

Negotiated procedure Tender offers are solicited from a single tenderer.

Nominated procedure Tenderers that satisfy prescribed criteria are entered into an electronic database. Tenderers are invited to submit tender offers based on search criteria and their position in the database. Tenderers are repositioned in the database upon appointment or upon submission of a tender offer.

Open procedure Tenderers may submit tender offers in response to an advertisement by the organization.

Qualified procedure A call for expressions of interest is advertised and thereafter only those tenderers who have expressed interest, satisfy objective criteria and who are selected to submit tender offers, are invited to do so.

http://www.cidb.org.za/Documents/PDM/Best_Pract_Guide/proc_pol_procedures_practices/best_pract_guide_a1_1001_proc_cycle.pdf

http://www.cidb.org.za/Documents/PDM/Best_Pract_Guide/proc_pol_procedures_practices/best_pract_guide_a2_1002_applying_procurement_prescripts.pdf

http://www.cidb.org.za/Documents/PDM/Best_Pract_Guide/proc_pol_procedures_practices/best_pract_guide_a3_1003_evaluating_tender_offers.pdf

http://www.cidb.org.za/Documents/PDM/Best_Pract_Guide/proc_pol_procedures_practices/best_pract_guide_a4_1004_evaluating_quality_in_tender_submissions.pdf

http://www.cidb.org.za/Documents/PDM/Best_Pract_Guide/proc_pol_procedures_practices/best_pract_guide_a5_1005_managing_construction_procurement_risks.pdf

http://www.cidb.org.za/Documents/PDM/Best_Pract_Guide/proc_pol_procedures_practices/qbest_pract_guide_a6_1006_app_the_reg_to_constr_proc.pdf

http://www.cidb.org.za/Documents/PDM/Best_Pract_Guide/proc_pol_procedures_practices/best_pract_guide_a7_1035_the_proc_of_prof_services.pdf

http://www.cidb.org.za/Documents/PDM/Best_Pract_Guide/proc_pol_procedures_practices/best_pract_guide_a8_1036_proct_measures_to_dev_reg_contr.pdf

http://www.cidb.org.za/Documents/PDM/Best_Pract_Guide/bpg_pref/best_pract_guide_b1_1007_formu_and_imp_pref_proc_pol.pdf

http://www.cidb.org.za/Documents/PDM/Best_Pract_Guide/bpg_pref/best_pract_guide_b2_1008_methods_and_proc_for_imp_pref_proc_pol.pdf

http://www.cidb.org.za/Documents/PDM/Best_Pract_Guide/proc_documentation/best_pract_guide_c1_1009_preparing_procurement_documents.pdf

http://www.cidb.org.za/Documents/PDM/Best_Pract_Guide/proc_documentation/best_pract_guide_c2_1010_choosing_an_appropriate_form_of_contract_for_engineers.pdf

http://www.cidb.org.za/Documents/PDM/Best_Pract_Guide/proc_documentation/best_pract_guide_c3_1011_adjudication.pdf

http://www.cidb.org.za/Documents/PDM/Best_Pract_Guide/jv_subcontract_arrange/best_pract_guide_d1_1012_subcontracting_arrangements.pdf

http://www.cidb.org.za/Documents/PDM/Best_Pract_Guide/jv_subcontract_arrange/best_pract_guide_d2_1013_joint_venture_arrangements.pdf


Designation Description

Quotation procedure Tender offers are solicited from not less than three tenderers in any manner the organization chooses, subject to the procedures being fair, equitable, transparent, competitive and cost-effective.

Proposal procedure using the two-envelope system

Tenderers submit technical and financial proposals in two envelopes. The financial proposal is only opened should the technical proposal be found to be acceptable.

Proposal procedure using the two-stage system

Non-financial proposals are called for. Tender offers are then invited from those tenderers that submit acceptable proposals based on revised procurement documents. Alternatively, a contract is negotiated with the tenderer scoring the highest number of evaluation points.

Shopping procedure Written or verbal offers are solicited in respect of readily available supplies obtained from three sources. The supplies are purchased from the source providing the lowest price once it is confirmed in writing.

Preparing for procurement

Each time the DEPARTMENT undertakes a procurement, it shall commence by establishing a) the broad scope of work

associated with the procurement,

i. the need and justification for the procurement,

ii. the estimated market-related costs and benefits of the procurement,

iii. the resources and expertise available for the management, administration and supervision of the procurement,

iv. the risks associated with the procurement,

v. the public authorities, if any, which need to be consulted in connection with the procurement, g) the preferential

procurement policies, if any, which shall apply to the contract, or project,

vi. the appropriate contract and pricing strategy,

vii. the appropriate targeting strategy,

viii. the appropriate procurement procedure(s), and

ix. the funding source for the contract or project

Tender offers may not be solicited unless and until:

i. the necessary resources to administer the contract or project have been obtained or put in place,

ii. all the necessary organizational approvals for the project or contract have been obtained,

iii. appropriate approval has been obtained for the selected contract and pricing strategy, for the procurement

procedure, and where a preferential procurement policy is to be pursued, for the targeting strategy,

iv. all necessary feasibility studies and preliminary investigations, commensurate with the selected contract strategy

have been completed,

v. all the necessary and appropriate procurement documents have been prepared,


vi. the need for the procurement, the financial and technical viability of the proposed procurement, and the

DEPARTMENT’s firm intention of proceeding with the procurement is confirmed, and

vii. the funding for or the arrangements for the financing of the contract or project are in place.

Line function officials shall keep written records of all decisions and determinations made as well as the reasons and details

relating thereto.

General rules:

a. As a general rule, consultants that are commissioned to prepare a scope of work for a particular procurement shall be

precluded from submitting tender offers for that procurement.

b. Tenderers may submit tenders as a joint venture, provided that, before the contract is awarded to the joint venture,

all the partners enter into a joint venture agreement which jointly and severally binds the partners to perform the

contract. However, where the qualified procedure is used, short-listed respondents who elect to enter joint ventures

after the short-listing stage shall, if required in terms of the tender data, obtain the organization's permission to do so.

c. In the event that a tender is not awarded for reasons other than that all non-financial proposals solicited in the

proposal procedure fail to comply with the requirements, the DEPARTMENT shall not call for fresh tenders covering

substantially the same scope of work within six months of the closing date of the original tender.

d. Any negotiations or discussions with respondents or tenderers shall be conducted in an open, competitive,

transparent and fair manner.

e. The DEPARTMENT shall be justified in rejecting all tender submissions only if such submissions are non-responsive

and are unsuitable either because they do not fully comply with requirements or involve costs substantially higher than

the budget.

Procurement documentation

a. Procurement documents shall be prepared in accordance with the DEPARTMENT's SCM System and the provisions of

the CIDBA.

b. Any eligibility criteria introduced into the tender data shall not introduce criteria additional to those prescribed by the

CIDBA and shall generally be based on the demonstration of the following, as necessary:

i. professional and technical qualifications;

ii. professional and technical competence;

iii. financial resources;

iv. equipment and other physical facilities;

v. managerial capacity, reliability, experience; and

vi. reputation.


c. Calls for expressions of interest shall be prepared in accordance with the provisions of the CIDBA and incorporate, by

reference, the standard conditions for the calling for expressions of interest as provided by the CIDBA as Best Practice

Guides. Where submissions are used to establish a tenderer's eligibility to submit a tender offer, respondents shall be

requested in such documents to demonstrate their qualifications in relation to the appropriate requirements as

prescribed.

d. Procurement documents shall be prepared in English, unless directed otherwise.

e. The form of offer and acceptance shall be incorporated into procurement documents with minimal contract-specific

amendments.

f. The schedule of deviations should only be provided where the DEPARTMENT requires an audit trail of the amendments

to the procurement document agreed to before the formation of a contract. NOTE: The form of offer and acceptance

becomes an agreement when accepted unconditionally by both parties.

g. The scope of work shall, wherever possible, be described in terms of performance rather than the design of descriptive

characteristics, and b) based on national or international standards, where such exist.

h. Contract requirements in the form of specifications, plans, drawings, designs, testing and test methods, packaging,

marking or labelling or conformity certification shall not create trade barriers. Reference to any particular trade mark,

name, patent, design, type, specific origin or producer shall not be made unless there is no other sufficiently precise or

intelligible way of describing the characteristics of the work. Such reference shall be accompanied by the words "or

equivalent".

i. The evaluation criteria, including the weightings attached to any points scoring system, shall be stated in the

procurement documents.

j. Procurement documents shall contain provisions for

i. price adjustments, should the contract period exceed one year, and

ii. interest, at the contractor's bank prime interest rate, on monies due to the contractor, which are not paid within 30 d

of being due, to deter late payment.

k. Contracts should preferably provide for the resolution of disputes by adjudication in accordance with the principles

prescribed.

l. Contracts involving reimbursements on the basis of time and costs or on the basis of cost plus a fee for profit and

overheads shall be structured such that:

i. expenditure can be readily audited,

ii. reimbursable costs are at market or competitively tendered prices,

iii. the end costs of the contract can be continuously tracked and reported on at regular intervals, and

iv. within a short time after the completion of the contract, the final contract amount is known and can be settled.


m. Requirements for delivery periods that are incorporated into procurement documents shall be consistent with the

organization's reasonable needs and shall take into account factors such as the complexity of the intended procurement

and realistic time frames for completing the work.

Requirements relating to quality:

a. The manner in which quality is to be ensured shall be incorporated in procurement documents using one or

more of the following methods:

i. the full and unambiguous specification of requirements in the scope of work;

ii. taking cognizance of whole-life costing in the financial evaluation of tender offers;

iii. where exceptional quality is required, making use of the qualified procurement procedure and ensuring that

respondents who are invited to submit tender offers are, suitably qualified to do so;

iv. requiring tenderers to submit plans for monitoring and applying quality management principles in the

performance of their contracts;

v. introducing quality into the eligibility criteria;

vi. establishing a category of preference for quality in the evaluation of tenders; or

vii. evaluating selected quality criteria as an integral part of the tender offer

b. Quality may only be introduced into the evaluation of tender submissions where it is required to achieve policy

objectives in terms of the DEPARTMENT’s SCM Strategy or it is justifiable in terms of procurement outcomes.

c. Quality measures shall not promote captive markets and should result in quality that is appropriate to comply with

user requirements as opposed to the best quality available.

d. Quality should be based on one or more of the criteria listed in table 2, appropriate to the category of contract.

e. Social considerations, such as the composition of workforces in terms of race, gender or disability, shall not be

included in quality criteria.

Table 27- below depicts some generic quality criteria that may be applied:

Category of contract Description of quality criteria

Engineering and construction works

Quality control practices and procedures which ensure compliance with stated employer's requirements

Availability of resources

Capacity to mobilize own and subcontracting resources

Availability of skills to manage and perform the contract (assigned personnel) Quality achievements on previous contracts of a similar nature Previous works of a similar nature

Life-cycle costs


Category of contract Description of quality criteria

Services (including professional services)

Response to (ability to relate to) the proposed scope of work/project design which establishes the manner in which the respondent or tenderer intends to perform the contract

Adequacy of proposed work plan and proposed methodology

Organization, logistics and support resources

Availability of resources

Managerial ability appropriate to the size and nature of work

Control procedures

Qualifications and competence of the key staff (assigned personnel) in relation to the scope of work

Demonstrated experience in comparable projects

Demonstrated experience with respect to specific aspects of the project

Experience (familiarity) in the region, or similar regions

Performance record in similar projects

Quality assurance systems which ensure compliance with stated employer's requirements

Communication/facilitation skills

Sound knowledge of the employer's policies or work procedures (or both) Transfer of knowledge

Supplies Attainment of quality standards e.g. quality marks

Quality assurance systems which ensure compliance with stated employer's requirements

Capacity to deliver

Periods for delivery

Availability of service and spare parts

Safety and environmental benefits

Solicitation of tender offers

a. Tender offers shall be solicited in accordance with the DEPARTMENT SCM System and the CIDBA prescripts.

b. Time frames associated with the procurement procedures may only be relaxed where they cannot be adhered to due

to the presence of, or the imminent risk of, an extreme or emergency situation arising from one or more of the

following:

i. human injury or death;

ii. human suffering or deprivation of human rights

iii. serious damage to property or financial loss;

iv. livestock or animal injury, suffering or death;

v. serious environmental damage or degradation; or

vi. interruption of essential services.

c. Where the time frames are relaxed, the reason for doing so shall be recorded for audit purposes.

Advertisements

Advertisements shall be published in English, unless directed otherwise, in a manner that enables a wide spectrum of suitably

qualified and eligible tenderers to access the opportunities that are presented.


The notice and invitation to submit tender offers shall, as a minimum, contain the following information, as appropriate:

a) the tender, project or contract reference number;

b) the title of the proposed contract or project;

c) a brief description of the supplies, services or engineering and construction works which are required;

d) the closing date, place and time for submission of tenders;

e) the date and time of the compulsory site inspection or briefing session, if any; and f) the time and place for collecting


The notice and invitation to submit expressions of interest shall include the following information:

a) the tender, project or contract reference number, if applicable;

b) the title of the proposed contract or the project;

c) a brief description of the supplies, services or engineering and construction works which are required;

d) the closing date, place and time for expressions of interest;

e) the objective selection criteria for short-listing firms to submit tender offers or entry to an electronic database;

f) the date and time of the compulsory briefing session, if any; and g) the time and place for collecting the procurement

documentation.

Tender procedures

a. Tender boxes should preferably be accessible 24 hours a day, 7 days a week.

b. Tenderers shall either be required to pay a non-refundable amount for procurement documents approximately

equivalent to the cost of reproducing such documents or be issued with documents free of charge. Where non-

refundable amounts for procurement documents are provided for, such documents shall be made available for

inspection by tenderers.

c. Those persons responsible for procuring on behalf of the DEPARTMENT shall, except in the negotiated or disposal

procedures, not contact individual tenderers who are submitting or likely to submit tender offers before the receipt of

tenders. Should it be necessary in exceptional circumstances to do so, it shall be done in a manner which does not

obligate the DEPARTMENT, compromise the competitive position of others or give any unfair advantage to those who

were contacted.

d. Persons responsible for soliciting tender offers shall respond to any request by a tenderer for clarification regarding

the procurement documents within a reasonable time before the deadline for the submission or extend the deadline in

order to do so.

e. If for any reason those responsible for soliciting tender submissions before the deadline for tender submissions,

determine to modify the procurement documents, they shall do so by issuing an addendum that shall be

communicated to all prospective tenderers that have drawn procurement documents only if such an addendum can be

communicated in advance of the closing date and tenderers can be given reasonable time to react to the contents of


such an addendum. Should this not be possible, the addendum shall either not be issued, or the closing date for tender

offers or expressions of interest shall be postponed to enable the addendum to be issued.

f. Minutes of any briefing meeting that might be convened shall be taken, recording all requests for clarification received

and responses thereto, without identifying the sources of the requests. The minutes of such meetings shall be

promptly distributed to those attending the meetings and, if necessary, to all tenderers who draw procurement

documents.

g. Where bills of quantities are utilized, tenderers shall be required to tender a sum for their tender offer with or without

provision for price adjustment. The tendered sum shall not be adjusted for any arithmetical errors in computing

amounts or carrying forward summated amounts; rather rates or extensions shall be adjusted to arrive at the tendered

sum.

Table 28.: Identification of designated persons to undertake specific tender procedure activities:

Clause Action required of designated person Designated person

4.1 General requirements

4.1.3 Receive reports on irregular expenditure and fruitless and wasteful expenditure Chief Financial Officer

4.2 Conduct of those engaged in construction procurement processes or procedures

4.2.2.1 Receive disclosure of interest in any contract that is to be awarded Refer to SCM Delegations

4.2.2.4c) Grant permission for a person who prepares a procurement document or part thereof to submit a tender

for work associated with such documents

Construction Procurement Committee

4.2.5.6 Receive reports of any incidences of a person who directly or indirectly offers a gratification to improperly

influence in any way a procurement process, procedure or decision

Refer to SCM Delegations

4.2.6.1 Receive reports on any alleged irregular conduct including any alleged fraud or corruption. Refer to SCM Delegations

4.2.6.2 Report breaches of the CIDB code of conduct or alleged irregular conduct to the appropriate authority Refer to SCM Delegations

4.2.7 Preparation of report for placing a contractor under restrictions Refer to SCM Delegations

4.3.3a) Preparation of documents which have a value below the threshold for quotations Refer to SCM Delegations

4.3.3c) Invitation of quotations Refer to SCM Delegations

4.3.3d) Evaluation of quotations and the preparation of recommendations for award Refer to SCM Delegations

4.4 Roles and responsibilities in relation to the procurement processes, activities and controls

4.4.2.1 Appoint a Documentation Review Team Refer to SCM Delegations

4.4.2.2d)

4.4.2.3b)

Approve additional clauses or variations to the standard clauses in the conditions of contract, conditions

of tender or conditions for the calling for expressions of interest not provided for in the Institution approved

templates


4.4.2.6 Receive documentation from Documentation Review Panel for archiving Refer to SCM Delegations

4.4.3.1 Appoint an Evaluation Panel Refer to SCM Delegations

4.4.3.3 Communicate with tenderers and respondents during the procurement process. Refer to SCM Delegations

4.4.4.6 Receive from the Construction Procurement Committee a copy of the Construction Procurement

Committee’s decisions




4.4.4.7 Receive from the Construction Procurement Committee a decision for the use of the negotiated procedure

in an emergency.


4.4.4.8 Submit a motivation for an urgent decision from the Construction Procurement Committee which cannot

be held over to the next meeting.


4.4.6.3.2 Submit a motivation for not conducting a competition amongst framework contractors Refer to SCM Delegations

4.4.6.3 Receive notification of an award of a contract through a negotiated procedure Refer to SCM Delegations

4.4.7.1.1 Prepare a procurement plan for submission to the Provincial Treasury Refer to SCM Delegations

4.4.7.1.2 Approval of procurement plan Accounting officer

4.4.7.2.1 Preparation of submission to the Provincial Treasury of particulars before advertising a tender above a

threshold


4.4.7.2.2 Audit tenders above a threshold Official from internal audit

4.4.7.2.3 Audit task, batch or package orders above a threshold Official from internal audit

4.4.7.2.4 Issue audit certificates Official from internal audit

4.4.7.3.2 Prepare and submit motivation to the Provincial Treasury for increase in contract or task, batch or

package order value above a threshold.


4.5 Complaints and challenges

4.5.1 Receive complaints regarding the construction procurement system Refer to SCM Delegations

4.5.2 Investigate all complaints regarding the procurement system Refer to SCM Delegations

4.5.3 Receive request to appoint a tender dispute adjudicator Refer to SCM Delegations

4.5.3b) Receive deposit for tender adjudicator’s fee Refer to SCM Delegations

4.7 Usage of standard procurement procedures

4.7.1.4 Motivate the reasons for pursuing the negotiation procedure or for approaching a confined market Refer to SCM Delegations

4.7.1.5 Pursue a negotiated procedure in an emergency without prior approval Refer to SCM Delegations

4.7.1.5 Describe the circumstances surrounding the extreme or emergency situation that gave rise to the use of the negotiation procedure and submit together with this report an explanation for acceptance by the Construction Procurement Committee


4.7.1.6 Motivate the reasons for pursuing the proposal procedure using the two-envelope system or the proposal procedure using the two-stage system for prior approval.


4.7.2.10 Approve conditionally or unconditionally a request from the accounting officer or accounting authority of an organ of state to make use of a framework contract entered into with the institution

Accounting officer upon the recommendation of the Construction Procurement Committee

4.7.2.11 Receive notification of the issuing by an organ of state of the award and completion of task, batch or

package orders together with the total of prices at the start and end of such orders.


4.7.2.12 Provide any organ of state that is granted permission to make use of the institution’s framework contract

with a copy of the contract and any templates for the issuing of quotations or task, batch, or package

order and any other relevant information pertaining to the use of the framework contract


4.7.5.1 Receive unsolicited proposals Refer to SCM Delegations

4.7.5.2 Receive report or recommendations on unsolicited proposals

Accounting officer

4.8 Procurement documents

4.8.1.5 Approve the amendment to a contract Accounting officer

4.8.2.4 Approve the inclusion of additional clauses or variations to the standard clauses in the contract data other Refer to SCM Delegations



than the standard clauses provided in the approved standardised documents.

4.8.6.3 Grant permission for the provision of advanced payments to contractors. Chief Financial Officer

4.8.10.2

4.8.10.3

4.8.10.5

Determine minimum levels of insurance if the default values are insufficient Chief Financial Officer

4.8.12 Waiving of the institution’s intellectual property rights Refer to SCM Delegations

4.8.13.1 Grant permission for the referral of a dispute to an adjudicator Refer to SCM Delegations

4.8.13.2 Provide advice on how to respond to a dispute raised by a contractor Refer to SCM Delegations

4.8.13.3 Provide advice on resolving a matter by arbitration Refer to SCM Delegations

4.9 Calls for expressions of interest and invitations to submit tender offers

4.9.2.1 Determine that a shorter period for advertising in the Government Tender Bulletin is warranted Accounting officer

4.9.3.2 Maintain a register of procurement documents not issued via a website Refer to SCM Delegations

4.9.5.2 Ensure that the procurement documents state the closing date and time for submissions and the physical

location of the tender box .


4.9.5.3 Ensure that all tenderers and respondents who obtained procurement documents are timeously advised

of any change in the closing time and date

Agent identified in submission data or tender data of procurement documents

4.9.5.5 Keep key for tender box and open box on stipulated closing date. Refer to SCM Delegations

4.9.6.1 Appoint an Opening Panel Refer to SCM Delegations

4.9.10.1 Provide written reasons for actions taken Refer to SCM Delegations

4.10.2.2 Ensure that supplier database forms are fully completed as soon as possible Refer to SCM Delegations

4.11 Administration of contracts

4.11.1.3 Obtain in accordance with the requirements of the contract, all performance bonds, insurance certificates

and the like, log and monitor the expiry date of each document and arrange for the originals to be stored

in a fire proof safe.


4.11.2.2.1 Directing that performance reports are required where contract values are different to the standard values. Refer to SCM Delegations

4.11.2.2.2 Develop a performance report Refer to SCM Delegations

4.11.2.2.3 Issue the contractor with the performance criteria, weightings and scores Refer to SCM Delegations

4.11.2.2.4 Evaluate a contractor’s performance Refer to SCM Delegations

4.11.2.2.6 Completion of an evaluation report Refer to SCM Delegations

4.11.2.2.7 Delegate an independent official to review a contractor’s score Refer to SCM Delegations

4.11.3.1 Prepare a motivation to authorise increases in the total of prices excluding price adjustment for inflation in

excess of the amounts stated


Receipt of tender submissions

Tender submissions, save for those solicited in terms of the quotation procedure, shall only be accepted for evaluation when they

are, in accordance with the procurement documents,

i. submitted in sealed envelopes,


ii. annotated with the required particulars, and

iii. placed in the nominated tender box or delivered to the specified place for receipt of tender submissions.

a. Tender submissions in the quotation procedures should normally be in accordance with the provisions of the

DEPARTMENT SCM System.

b. Tender submissions shall be returned unopened (unless it is necessary to open a tender submission to obtain a

forwarding address) when:

i. the tender submission is received after the closing time for tenders,

ii. the tender submission is received by a method other than the method prescribed in the procurement

documents, or

iii. only one tender submission is received and the I BEC decides to call for fresh tender submissions.

Opening of tender submissions

a. All tender submissions shall, unless there are justifiable reasons not to do so, be opened in public, or in the presence

of those tenderers who made submissions or their representatives, immediately after the closing time for receipt of

tender submissions. Where this is impossible, arrangements shall be made to ensure that no fu rther submissions are

received and that such submissions are not tampered with in any way before their opening. Such tender submissions

should be opened not more than one week after the closing time for tenders, in the presence of not less than two

persons representing the DEPARTMENT and one other person who is independent of the organization, named in the


b. All tender submissions shall each be given a mark of authenticity upon opening and on every page as proof that the

tender submission was received before the closing time.

c. After opening each tender submission the person responsible for overseeing the opening of tender submissions shall

record for each tender offer, including all alternative tender offers, as relevant:

i. the name of the tenderer,

ii. the total of prices,

iii. contract data that have a bearing on the tendered price e.g. time for completion, settlement discounts, price

adjustment, and

iv. preferences claimed (specific goals and evaluation points claimed).

d. Where contracts are not awarded in totality to a single tenderer, the recording of the total of prices is not required.

Where defined portions of contracts may be awarded to multiple tenderers and such portions can be readily totaled

in the tender submission, those totals should be recorded.

Evaluation of tender submissions – refer to Bid Committee Process in Volume 1


a. Disqualification of tenderers

A tenderer (and his tender submission) may be disqualified where it is determined that there has been an effort by that

tenderer to influence the processing of tender submissions or if it is established that such tenderer engaged in corrupt

or fraudulent practices.

b. Test for responsiveness

The evaluation of tender submissions shall commence with a determination as to whether or not each tender submission

properly received is responsive. A responsive tender submission is one which:

i. complies with the requirements of the tender data;

ii. has been properly and fully completed and signed; and

iii. conforms to all the terms, conditions, and specifications of the procurement documents without material deviation or

qualification which, in the organization's opinion, would

detrimentally affect the scope, quality, or performance of the works, services or supply identified in the

scope of work,

change the employer's or the tenderer's risks and responsibilities under the contract, or

affect the competitive position of other tenderers presenting responsive tenders, if it were to be rectified.

Non-responsive tender submissions shall not be subsequently made responsive by correction or withdrawal of the

non-conforming deviation or reservation.

c. Arithmetical errors

Responsive tender offers shall be checked for arithmetical errors. Such errors shall be corrected in the following manner:

i. Where there is a discrepancy between the amounts in figures and in words, the amount in words shall govern.

ii. If a bill of quantities or schedule of prices applies and there is an error in the line item total resulting from the product of

the unit rate and the quantity, the line item total shall govern and the rate shall be corrected.

iii. Where there is an obviously gross misplacement of the decimal point in the unit rate, the line item total as quoted shall

govern, and the unit rate shall be corrected.

iv. Where there is an error in the total of the prices, either as a result of other corrections required by this checking

process or in the tenderer's addition of prices, the total of the prices shall govern and the tenderer will be asked to

revise selected item prices (and their rates if a bill of quantities applies) to achieve the tendered total of the prices.

d. Ranking and scoring of responsive tenderers

Tender submissions shall not be evaluated against any criteria that are not disclosed in the procurement documents.


Each responsive tender offer shall be reduced to a comparative offer and shall be evaluated using the prescribed

procedure associated with the method nominated in the tender data. A record shall be kept of all the tender evaluation

points that are awarded to every tenderer making a tender submission.

Quality shall be scored for each of the criteria stated in the tender data. Each member of the evaluation panel shall score each

and every criterion independently. The scores shall thereafter be averaged and retained for auditing purposes.

Preferences shall be scored using a method prescribed by the PPPFA and its Regulations as stated in the tender data. The

scores shall thereafter be averaged and retained for auditing purposes.

Unrealistic financial offers (i.e., where it is not economically possible to perform the contract at that price) distort the scoring of

price. In cases where a tenderer has tendered a favourable unrealistic financial offer, the evaluator should ascertain whether or

not there is a valid reason for the tender price being unrealistic. This will necessitate that the tenderer be interviewed. If there is

no valid reason, the tender offer should be eliminated from further consideration.

Financial offers, preferences and quality, as relevant, shall be scored to two decimal places. Where two or more tender offers

score an equal number of tender evaluation points, the tenderer who is recommended for the award of the contract shall be the

tenderer with the highest number of a) preference points, and b) functionality points.

Risk assessment

Compliance with the provisions of the DEPARTMENT SCM System, Volume 8, shall be confirmed in respect of the highest

ranked tenderer or the tenderer scoring the highest number of tender evaluation points. In the event of non-compliance,

compliance shall be established in respect of the next highest ranked tenderer or tenderer scoring the next highest points. The

process shall be repeated until a tenderer who complies with such requirements is identified.

A risk analysis shall be performed on the tender submission of the highest ranked tenderer or tenderer who scores the highest

number of tender evaluation points to ascertain if any of the following, as relevant, present an unacceptable commercial risk

to the DEPARTMENT:

i. unduly high or unduly low tendered rates or amounts in the tender offer;

ii. contract data provided by the tenderer; or

iii. the content of tender returnables which are to be included in the contract.

The tenderer shall be approached to amend any part of his tender submission that might, in the opinion of the IBEC, present an

unacceptable commercial risk, provided that such negotiations do not affect the competitive position of the tenderer. Failure to

make unacceptable commercial risks acceptable to the organization might be sufficient grounds for the DEPARTMENT to reject

the tender.


Clarifications shall be obtained from a tenderer on any matter that could give rise to ambiguity in a contract arising from the

tender offer.

The reasons for overlooking or rejecting a tender offer shall be recorded for audit purposes.

Negotiations with tenderers

Communication with tenderers shall only take place for the purpose of clarification and not for negotiation, save for that provided

for in the DEPARTMENT SCM System.

Tender evaluation report

A tender evaluation report shall be prepared for all procurement undertaken (except where not required in terms of the

organizations procurement policy) and shall, as a minimum, contain:

i. the contract number and description,

ii. an outline of the procurement strategy that was adopted, i.e. the targeting, contracting and pricing strategy

and the procurement procedure, as relevant,

iii. the tender validity expiry date and the tender closing date,

iv. the date of advertisement and the place where advertised,

v. the method of tender evaluation,

vi. the number of tenders received and the number of responsive tenders, and

vii. the name of the recommended tenderer and key aspects of the recommended tenderer's offer,

viii. the cost estimate (budget) prepared ahead of the tender,

ix. the parameters used for scoring tenderers and the score assigned to each tenderer in respect of each component of

the evaluation that is evaluated, and

x. the reasons for rejecting or overlooking a tenderer.

Table 28: Typical content of an evaluation report relating to the solicitation of tender offers

Section Typical content

1 Summary Provide an overview of the parameters associated with the solicitation of the tender, preferably in tabular form, including the following:

Contract / Project / Tender no.

Contract description

Contract duration

Purpose of tender

Contracting strategy

Pricing strategy

Form of contract

Targeting strategy

Procurement procedure

Method of tender evaluation

Tender validity expiry date

Alternative tenders (not permitted or state conditions under which permitted)

Media in which advertisement placed, if not a nominated or qualified competitive selection procedure or a restricted competitive negotiations procedure


Section Typical content

Date of advertisement, if not a nominated or qualified competitive selection procedure or a restricted competitive negotiations procedure

Date from which documents were available

Details of clarification meeting including date and place, if any

Tender closing date

Number and title of addenda issued

Number of tenders received

Number of responsive tenders

Recommended tender(s)

Cost estimate (budget) or in the case of framework agreement, estimated value of all task , batch or package orders which are likely to be awarded during the term of the contract

Lowest responsive and realistic tender used for comparative purposes (tender price, specific goals etc.).

2 An overview of the

tender evaluation

process

Provide an overview of the procurement process indicating the eligibility criteria that was applied and the evaluation criteria. State specific

goals and points relating to preferences as well as any quality evaluation criteria, prompts for judgement and weightings relating thereto.

Reproduce the list of returnable documents.

Provide an overview as to how the quality aspects of the tender were scored.

Record that those involved in the evaluation of tenders have no conflicts of interest or have declared any conflict of interest that they may

have and the nature of such conflict.

3 Tender evaluation

process

3.1 Tender offers received

List the tender offers that were received.

Describe any noteworthy events regarding the opening of submissions e.g. the returning of late tenders and the declaring of submissions non-responsive on the grounds that they were not received in the prescribed manner. 3.2 Completeness of tenders received

Compare tender submissions received against list of returnable documents. State if any tender submissions received were incomplete and

indicate what was not complete. Indicate what steps were taken to make incomplete tenders complete only where this does not affect the

competitive position of the tenderer in question. List communications with tenderers.

Confirm if tenderers took into account addenda, if any, in their tender submission

3.3 Responsiveness of tenderers Identify which of the tenders received were non-responsive and provide clear reasons for declaring such tenders to be non-responsive. 3.4 Evaluation of tender offers Record the manner in which tenderers were reduced to a common basis. Record preferably in a tabular form:

the scores for each of the evaluation criteria.

the total score (excluding those who failed to score above a threshold).

the fee percentages applied Defined Cost that were tendered if applicable Provide reasons for not granting a preference or considering a financial offer to be unrealistically low. 3.5 Reasons for disqualification on the grounds of corrupt or fraudulent practice State reasons if applicable. 3.6 Compliance with legal requirements Confirm that tenderers are not barred from participation, tax matters are in order, is registered etc. 3.6 Acceptability of preferred tenderer State any reasons why the tenderer with the highest points should not be considered for the award of the tender e.g. commercial risk, restrictions, lack of capability and capacity, legal impediments, etc. Also state any arithmetical corrections that have been made.

4 Outcome

of the evaluation

Make a recommendation for the award of the tender and state any qualifications to such award.

5 Confirmation of

recommendations

Make provision for the recommendations for the award of the tender to be confirmed or amended by the Construction Procurement

Committee.

Award of contracts

A contract shall not be awarded to a tenderer who:


i. is under restrictions, or has principals who are under restrictions, preventing him/them from participating in the

organization's procurement,

ii. cannot demonstrate that he possesses the necessary professional and technical qualifications, professional and

technical competence, financial resources, equipment and other physical facilities, managerial capability, reliability,

experience and reputation, and the personnel, to perform the contract,

iii. does not have the legal capacity to enter into the contract,

iv. is insolvent, in receivership, bankrupt or being wound up, has his affairs administered by a court or a judicial officer,

has suspended his business activities, or is subject to legal proceedings in respect of any of the foregoing,

v. does not comply with the legal requirements, if any, stated in the organization's procurement policy, and

vi. might not be able to perform the contract in the best interest of the organization owing to conflicts of interest.

A tender can be rejected on technical grounds (a), (c), (d) and (e) or for not having the capability and capacity to undertake the

work (b). There are no other grounds for declining a tender apart for (f) or for a breach of the standard conditions of tender.

The DEPARTMENT may decline to contract with tenderers who are not in good standing insofar as a piece of legislation is

concerned, e.g. their tax obligations.

Conflicts of interest can arise from prior or current obligations to other organizations. They might also arise where a contractor

provides supplies or engineering and construction works to a particular project and is then called upon to provide professional

services relating to that project.

Contracts shall be signed as soon as possible after the contract is awarded by the person authorized to do so in terms of the

organization's procurement policy. It is sufficient to merely sign the acceptance portion of the form of offer and acceptance, where

provided, to accept the tender offer. The initialling of each page is not required to give effect to the contract. This practice might,

however, assist in identifying the contract between the parties during the discovery phase of litigation proceedings.

The final draft contract shall be prepared and issued to the successful tenderer for acceptance as soon as possible after

the date of the employer's signing of the form of offer and acceptance, and where relevant, the signing of the schedule of

deviations.

The contract shall be compiled from the procurement documents issued to tenderers and the returnable documents in accordance

with the provisions of the DEPARTMENT SCM System and shall, as relevant, take account of:

i. addenda issued during the tender period, b) the content of returnable documents, and

ii. any revisions agreed between the employer and the successful tenderer.

Table 29- depicts the relevant contract forms available in the DEPARTMENT:

Form of contract Code Usage


Form of contract Code Usage

CIDB

Standard professional service contract SPSC Professional services

FIDIC

Short Form of Contract Green

Book

Building or engineering works of relatively small capital value or for relatively simple or repetitive work or work of

short duration. Use for design by employer or contractor designed works.

Conditions of Contract for Construction

for Building and Engineering Works

designed by the Employer

Red

Book

Building or engineering works designed by the employer. (The works may include some elements of contractor

designed works)

Conditions of Contract for Plant and

Design-Build for Electrical and

Mechanical Plant and for Building and

Engineering Works, designed by the

Contractor

Yellow

Book

The provision of electrical or mechanical plant and the design and construction of building or engineering works.

GCC

General conditions of contract for

construction contracts (2010)

GCC Engineering and construction works, including any level of design responsibility.

JBCC Series 2000

JBCC Principal Building Agreement

(Edition 5)

PBA Buildings and related site works designed by the employer

JBCC Minor Works Agreement (Edition

4)

MWA Buildings and related site works of simple content designed by the employer

NEC3

NEC3 Engineering and Construction

Contract

ECC Engineering and construction works, including any level of design responsibility.

NEC3 Engineering and Construction

Short Contract

ECSC Engineering and construction works which do not require sophisticated management techniques, comprise

straightforward work and impose only low risks on both the employer and contractor.

NEC3 Professional Services Contract PSC Professional services, such as engineering, design or consultancy advice

NEC3 Term Service Contract TSC Manage and provide a service over a period of time

NEC3 Term Service Short Contract TSSC Manage and provide a service over a period of time or provide a service, which does not require sophisticated

management techniques, comprises straightforward work and imposes only low risks on both the employer and

contractor

NEC3 Supply Contract SC Local and international procurement of high value goods and related services including design

NEC3 Supply Short Contract SSC Local and international procurement of goods under a single order or on a batch order basis and is suitable for

use with contracts which do not require sophisticated management techniques and impose only low risks on both

the Purchaser and the Supplier.

After the successful tenderer has received the employer's notice of acceptance, all other tenderers shall be notified that their

tender offers have not been accepted by post, telefax or other electronic method, or by publication of the name of the successful

tenderer on a website or in an accessible publication, as appropriate.

The details of every contract awarded shall be recorded. This record shall include:

i. the contract reference number,

ii. a description of the work,

iii. the contract price,


iv. preferences claimed,

v. tender evaluation points awarded,

vi. the price of the tender offer used for comparative purposes where preferences were applied in the evaluation of

tenders, and

vii. the name and address of the successful tenderer.

The following details of every contract that is awarded should be made known to interested parties upon request after the

successful tenderer has received the employer's notice of acceptance:

i. the contract reference number;

ii. a description of the procurement;

iii. the total contract price or price for a portion thereof, if relevant;

iv. tender evaluation points awarded, if any; and

v. e) the name of the successful tenderer.

If the tenderer is unable, unwilling or fails to enter into the contract, the contract shall be offered to the tenderer with the next

highest number of tender evaluation points if acceptable to the BEC and BAC, and so on until the contract is awarded;

provided, however, that the procurement remains cost-effective and such tender offers are still valid.

In situations where no contract is awarded, the DEPARTMENT shall review the procurement requirements and procurement

procedures and begin the procurement process again, unless there are compelling reasons not to do so.

Contract administration

Every tenderer awarded a contract shall complete that contract in accordance with its terms and requirements. In the event that

the organization determines that the contractor's performance is unsatisfactory due to circumstances within a contractor's

control, the organization may take whatever actions or impose whatever sanctions it deems appropriate in accordance

with the provisions of the contract and as directed by the DEPARTMENT SCM System, Volume 4.

The DEPARTMENT or its agents shall monitor the contractor's performance under the contract to ensure that the requisite

quality standards are attained and the requirements are satisfied, and shall certify compliance upon completion of the contract.

Where, through unforeseeable circumstances, it is necessary to increase the quantum of work or to perform additional work

within the broad scope of the contract, the contractor may be instructed to perform such work under the contract provided that

the final contract amount is not above the percentage contained in the organization's procurement policy, excluding any

provision for price adjustment, at the time that the contract is awarded. Work in excess of this limit shall not be undertaken

without the express permission of the organization's executive.


If, at any point during the term of a contract, it is terminated or cancelled by either the contractor or the organization, a

record of the reasons for this cancellation/termination shall be made.

Upon completion of a contract, a record of the key performance indicators relating to time, cost and the attainment of goals

associated with a preferential procurement policy pertaining to that contract should be made.

Resolution of disputes arising from a contract

Disputes shall be resolved in accordance with the provisions of the contract. This shall not, however, preclude the parties from

settling their differences using alternative means such as expert determination, mediation and conciliation, failing which the

dispute shall be resolved in terms of the contract.

51. DEPARTURES

Departures may be made from the methods and procedures provided in the DEPARTMENT SCM System with the approval as

directed.

Table 30: Procurement processes

# Sub-Activity Designated person

Activity 1: Establish what is to be procured (Applies only to goods and services not addressed in a construction procurement strategy)

1.1 Prepare broad scope of work for procurement As per SCM Delegations

1.2 Estimate financial value of proposed procurement As per SCM Delegations

1.3 PG1 Obtain permission to start with the procurement process As per SCM Delegations

Activity 2A: Decide on procurement strategy (Applies only to goods or services not included in a construction procurement strategy)

2.1 Establish opportunities for promoting secondary procurement policies, if any As per SCM Delegations

2.2 Establish contracting and pricing strategy As per SCM Delegations

2.3 Establish targeting strategy As per SCM Delegations

2.4 Establish procurement procedure As per SCM Delegations

2.5 PG2 Obtain approval for procurement strategies that are to be adopted As per SCM Delegations

Activity 3: Solicit tender offers

3.1 Prepare procurement documents As per SCM Delegations

3.2 PG3 Obtain approval for procurement documents As per SCM Delegations

3.3 PG4 Confirm that budgets are in place As per SCM Delegations

3.4 Invite tenderers or

respondents to submit

tender offers or

expressions of interest

As per SCM Delegations To be determined by institution

As per SCM Delegations Assigned procurement leader

Communicate with tenderers or respondents up until closing time for submissions As per SCM Delegations

Advertise tenders or calls for expressions of interest on CIDB website As per SCM Delegations

3.5 Receive tender offers or expressions of interest To be determined by institution



3.6 Open and record expressions of interest received Opening Panel

3.7 Evaluate expressions of interest Evaluation Panel

3.8 Prepare evaluation report on short-listing process Evaluation Panel

3.9 PG5 Confirm shortlist Construction Procurement

Committee

3.10 Invite tender offers from short-

listed tenderers

Invite tender offers from shortlisted tenderers As per SCM Delegations

Communicate with tenderers up until closing time for submissions As per SCM Delegations

Activity 4: Evaluate tender offers

4.1 Open and record tender offers received Opening Panel

4.2 Determine whether or not tender offers are complete Evaluation Panel

4.3 Determine whether or not tender offers are responsive Evaluation Panel

4.4 Evaluate tender submissions Evaluation Panel

4.5 Perform a risk analysis Evaluation Panel

4.6 Prepare a tender evaluation report Evaluation Panel

4.7 PG 6 Confirm recommendation contained in the tender evaluation report where the transaction for a particular

procedure is greater than the thresholds contained in Table B4.

Construction Procurement

Committee

Activity 5: Award contract

5.1 Notify successful tenderer and unsuccessful tenderers of outcome As per SCM Delegations

5.2 Compile contract document As per SCM Delegations

5.3 Audit tender process Internal audit

5.4 PG7 Formally accept tender offer As per SCM Delegations

5.5 Capture contract award data As per SCM Delegations

5.6 Register on supplier database As per SCM Delegations

Activity 6: Administer contracts and confirm compliance with requirements

6.1 Administer contract in accordance with the terms and provisions of the contract As per SCM Delegations

6.2 Ensure compliance with requirements As per SCM Delegations

6.3 Capture contract completion/ termination data As per SCM Delegations

6.4 PG8A Obtain approval to waive penalties or

low performance damages.

As per SCM Delegations To be determined by institution

Approve waiver of penalties or low performance damages. Construction Procurement

Committee

6.5

PG8B

Obtain approval to notify and refer a

dispute to an adjudicator

Outline the essence of the dispute and the reasons for wishing to

refer the dispute to an adjudicator.

As per SCM Delegations

Approve referral for a dispute to an adjudicator. As per SCM Delegations

6.6

PG8C

Obtain approval for events which in

terms of the contract increase the total

of prices or the time for Completion by

more than 1%.

(NOTE: Designated person may

increase values in terms of the

contract up to 1% but not beyond this

Finalise submission for increases in the total of prices or time for

completion in terms of the contract


Grant permission to approve an increase in prices or time in terms

of the contract if the total of prices does not exceed the total of

prices at award by more than the amounts stated in Table B8 or

the time for completion at award by more than 20%,




value)

6.7

PG8D

Obtain approval to exceed the total of

prices at award by the amounts stated

in Annexure B or the time for

completion at award by more than

20%

Prepare motivation for exceeding the total of prices at award by

more than the amounts stated in Table B8 or the time for

completion at award by more than 20%, setting out the precise

reasons for the increase in the cost of goods, services or works.


Approve amount or time overruns. As per SCM Delegations

6.8

PG8E

Obtain approval to cancel or terminate

a contract

Prepare motivation to terminate or cancel a contract and obtain

advice as necessary from the Legal Advisor (National Mandates)


Approve termination or cancellation of contract As per SCM Delegations


6.9

PG8F

Obtain approval to amend a contract Formulate proposed amendment to the contract and formulate a

motivation to do so


Approve proposed amendment to the contract As per SCM Delegations

6.9 Finalise contract As per SCM Delegations

6.10 Capture contract completion / termination data for construction works contracts. As per SCM Delegations

VOLUME 9: INFRASTRUCTURE AND CONSTRUCTION PROCUREMENT

Documents

Transcript of VOLUME 9: INFRASTRUCTURE AND CONSTRUCTION PROCUREMENT