construction industry development board development through partnership implementing the cidb...

Construction Industry Development Board

development through partnership

Implementing the CIDB Standard for Uniformity in Construction Procurement

3a

Aligning SCM processes to facilitate implementation



STANDARDIZED CONSTRUCTION PROCUREMENT DOCUMENTS FOR

ENGINEERING AND CONSTRUCTION WORKS

NB Employers should develop their own standardised procurement document using this generic document as a base.

STANDARDIZED PROCUREMENT DOCUMENTS FOR ENGINEERING AND CONSTRUCTION WORKS



Principal activities associated with the procurement process1 Establish what is to be procured2 Decide on procurement strategies3 Solicit tender offers4 Evaluate tender offers5 Award contract6 Administer contracts and confirm compliance with requirements

A need triggers the procurement process

Provision of works, services, supplies

concludes the procurement process

Components of a procurement system

Methods

Procedures

Policy



Outline of procurement process

1. Establish what is to be procured

• Clarify what is to be procured

2. Decide on procurement strategies

• Determine how the procurement is to take place

3. Solicit tender offers

• Solicit tender offers in terms of a set of procedures

@cidb



4. Evaluate tender offers

• Evaluate tender offers in terms of undertakings and parameters established in procurement documents.

5. Award contract

• Enter into contract with the successful tenderer.

6. Administer contract and confirm compliance with requirements

• Act in terms of the contract and confirm that procurement is in accordance with all requirements.Register award and cancellation, if any on cidb website



2. Advertise using iTender, indicating approximate contractor grading requirements

Registers & Procurement Interactions

1. Establish

what is to be

procured

5. Award contract

2. Determine Procurement

strategy

3. Solicit tender

offers

3.a Tender Offers by

contractors

4. Tender Evaluation

& Contractor selection

6. Manage contractor

3. Validate CIDB Registration

4. Validate Contractor GradeReg Con

5. Register Award

Reg Proj6. Register Completion (optional)

1. Determine approximate contractor grading requirements e.g 5 GB



Activity 1: Establish what is to be procured

• Prepare broad scope of work for procurement

• Estimate financial value of proposed procurement

Control point : Obtain permission to start with the procurement process



Activity 2: Decide on procurement strategies

Establish applicable

•preferential procurement policy

•contract and pricing strategy

•targeting strategy

•procurement procedure Control point: obtain approval for procurement strategies that are to be adopted

What BEE goals are to be pursued?

How are the risks, liabilities and obligations of the

parties to be structured?How is the contractor to be

paid?

What procedure is required to solicit tender offers?

What are the preferencing arrangements?



Choosing a procurement strategy is similar to developing a business plan

In cases where procurement is routine and occurs regularly, standard procedures can be developed and used.

NB Procurement documents need to be aligned with chosen procurement strategy



Activity 3: Solicit tender offers

• Prepare procurement documents

• Invite contractors to submit tender offers (or expressions of interest) advertise on

• Receive tender offers (or expressions of interest)

• Evaluate expressions of interests

• Prepare evaluation report on short listing process

• Invite tender offers from short list

Control points

•obtain approval for procurement documents

•confirm that budget in place

Control point : confirm short-list

Procurement procedure



A procurement system may be considered to be transparent if:

• the terms upon which the procurement process are to be conducted and the criteria upon which any decisions are to be made are properly documented and made widely available;

• the eventual procurement award decision, and where appropriate, any intermediate decisions, is made publicly available as are the reasons given for these decisions; and

• it is possible to verify that the documented procedures and criteria were indeed applied.



Standardised procurement documentsTendering procedures

T1.1 Tender Notice and Invitation to Tender

T1.2 Tender Data

Returnable documents

T2.1 List of Returnable Documents

T2.2 Returnable Schedules

Part 1: Agreements and contract data

C1.1 Offer and Acceptance

C1.2 Contract Data

Part 2: Pricing data

C2.1 Pricing Instructions

C2.2 Activity Schedule / Bill of Quantities

Part 3: C3 Scope of Work

Part 4: C4 Site information

Example in CIDB Standard for Uniformity

Examples in CIDB Standard of Uniformity

CIDB Standard conditions of tender

CIDB Standard of Uniformity

Standard Industry Form of Contract with contract specific data

Project specific

SANS 10403 (SANS 1921, SANS 2001 and 1914)

Project specific (SANS 10403)



T1.1 Tender Notice and Invitation to Tender (sample)Tenders are invited for the provision of . . . . . . . The Employer is …………..The physical address for collection of tender documents is: …………... Documents may be collected during working hours after 09:00 on …..A non-refundable tender deposit of R……payable by cheque made out in favour of the Employer is required on collection of the tender documents. Queries relating to the issues of these documents may be addressed to Mr/Ms . . . . ., Tel No. . . . . . . , Fax No. . . . . . . e mail . . . . . . A compulsory pre tender meeting with representatives of the Employer will take place at . . . . . . on . . . . .. starting at . . . . hrs. The closing time for receipt of tenders is . . . . . . hrs on . . . . . . .Requirements for sealing, addressing, delivery, opening and assessment of tenders are stated in the Tender Data.

@cidb generates this notice



T1.2 Tender Data

The conditions of tender are the Standard Conditions of Tender as contained in Annex F of the CIDB Standard for Uniformity in Construction Procurement.The standard conditions of tender for procurements make several references to the tender data for details that apply specifically to this tender. The tender data shall have precedence in the interpretation of any ambiguity or inconsistency between it and the standard conditions of tender.Each item of data given below is cross-referenced to the clause in the standard conditions of tender to which it mainly applies.

Clause number

F.1.1 The employer is ………



Annex F Standard conditions of tender

CIDB Standard for Uniformity in Construction Procurement

1 General• Tender Documents• Interpretation• Communication and employer’s agent• The employer’s right to accept or reject any

tender offer 2 Tenderer’s obligations

3 Employer’s undertakingsNB Conditions facilitate compliance with several

requirements of MFMA - SCM Regulations

Impacts on SCM processes



Tenderer’s obligationsEligibility Cost of tenderingCheck documents Confidentiality and

copyright of documentsReference documents Acknowledge addendaSite visit and clarification meeting Seek clarificationInsurance Pricing the tender offerAlterations to documents Alternative tenders Information and data to Submitting a tender offer be completed in all respectsClosing time Tender offer validityClarification of tender offer after Provide other materialsubmission Submit securities, Inspections, tests and analysis bonds, policies, etc.Check final draft Return of other tender documents Certificates



The Employer’s undertakingsRespond to clarification Issue AddendaReturn late tender offers Opening of tender

submissionsTwo-envelope system Non-disclosureGrounds for rejection and Disqualification Test for responsivenessArithmetical errors Clarification of a tender

offerEvaluation of tender offers Insurance provided by

the employerAcceptance of tender offer Notice to unsuccessful

tenderersPrepare contract documents Issue final contractComplete adjudicator's Provide copies of the contract contracts



List of returnable documents

Returnable Schedules required for tender evaluation purposes

Other documents required for tender evaluation purposes

Tax Clearance Certificate / Application for a Tax Clearance Certificate

Returnable Schedules that will be incorporated into the contract

Preference schedules

Other schedules and affidavits that will be incorporated into the contract




Preferencing schedules

Annex D: Direct Preferencing

Annex E: Participation Goals

BEE



Standard returnable documents

-Compulsory Enterprise Questionnaire

Requires tenderers to:

Provide name , VAT, Tax, Company and CIDB registration numbers

Record involvement of principals in the service of the state (current and within the last 12 months)

Record of spouses, children and parents in the service of the state

NB Facilitates compliance with SCM Regulation 21 c) re the compelling of tenderers to declare any conflict of interest and provide certain particulars




C1.1 Form of offer and acceptance

1 Offer

2 Acceptance

Schedule of deviations

Note: Tenderer signs offer and employer signs acceptance to form the contract.

The schedule of deviations records the items that have changed between offer and acceptance

Impacts on SCM processes



1.The agreement comes into effect on the date when the tenderer receives the signed agreement (offer and acceptance), complete with schedule of deviations.

2.The tenderer (now contractor) has a specified number of working days from the date of receipt of signed agreement to advise the employer why he cannot accept the contents of this agreement (eg schedule of deviations does not reflect what was agreed) , failing which agreement constitutes a binding contract between the parties.

Principles



Option 1- tenderer comes in and collects signed contract

Option 2- employer submits documentation to a courier-to-counter delivery / counter-to-counter delivery / door-to-counter delivery /door-to-door delivery /courier service

On what date does the contract come into effect?

When tenderer receives the signed agreement

2 working days after the employer submits the signed agreement to the service provider, provided that the employer notifies the tenderer of the tracking number within 24 hours of such submission



C1.2 Contract DataExample

The General Conditions of Contract for Construction Works (2004) published by the South African Institution of Civil Engineering, is applicable to this contract.

Copies of these conditions of contract may be obtained from the South African Institution of Civil Engineering (tel 011-805 5947)

Part 1: Contract Data completed by the Employer(see guidance on essential data and optional data provided in GCC 2004)Part 2: Contract Data completed by the Contractor(see guidance on essential data and optional data provided in GCC 2004)



Part 2 :Pricing Data

Formulate around the pricing strategy that is adopted, typically Bill of Quantities.

Other strategies include:

Activity schedules

Cost reimbursable Target cost

Time-based contract Retainer and / or contingency contract

Percentage contract Indefinite Delivery Contract

Note: The terms of payment and the provisions for price adjustment for inflation, if applicable, are established in the contract data.



C2.1 Pricing Instructions The method of measurement published by the South African

Bureau of Standards in clause 8 of the Standardised Specifications for Civil Engineering Construction is applicable, subject to the variations and amendments contained in the section “Applicable SABS 1200 standardised specifications”.

Descriptions in the Schedule of Quantities are abbreviated and comply generally with those in the Standardised Specifications. Clause 8 of each Standardised Specification, read together with the relevant clauses of the Scope of Work, set out what ancillary or associated activities are included in the rates for the operations specified. Should any requirements of the measurement and payment clause of the applicable Standardised Specification, or the Scope of Work, conflict with the terms of the Schedule, the requirements of the Standardised Specification or Scope of Work, as applicable, shall prevail.



Bill of quantitiesItem.

Ref Description Unit Quantity

Rate Price

Total for section carried forward to the summary of Bill



The Scope of Work specifies and describes the engineering and construction works which are to be provided and any other requirements and constraints relating to the manner in which the contract work is to be performed

e.g. 1. building will be occupied during upgrading

2. Other contractors will be on site simultaneously



The Standard for Uniformity in Construction Procurement (see clause 4.4.7) requires that the scope of work shall, wherever possible be:

a) described in terms of performance rather than the design or

descriptive characteristics, andb) based on national or international

standards, where such exist.e.g. the building shall maintain

an ambient day time temperature of 20 to 24 degrees



SANS 1921 family of standards for Construction and Management RequirementsConstruction

Works specificationsPlant and materialsConstruction EquipmentExisting servicesSite establishmentSite usagePermits and way leavesAlterations, additions, extensions and modifications to existing worksInspection of adjoining propertiesWater for construction purposesSurvey control and setting out of the works

ManagementManagement of the worksHealth and safety

Each part of SANS 1921 standardizes an aspect of requirements

separation ofmanagement from

construction



SANS 1921 family of standards for Construction and Management requirements for Works Contracts

Part 1 General engineering and construction works

Part 2 Accommodation of traffic on public roads

Part 3 Structural steelwork

Part 4 Third-party management support in works contracts

Part 5 Earthworks activities which are to be performed by hand

Part 6 HIV/AIDS Awareness

EPWP requirement



Under development

SANS 2001 family of Construction Works Standards Site clearance Earthworks Earthworks (small Earthworks (pipe trenches) Earthworks (small dams) works)Gabions and pitching Earthworks (roads, Earthworks (railway Structural aluminum work subgrade) sidings)Piling Concrete (small works)) Concrete (structural)Precast concrete (structural) Prestressed concrete Installation of Masonry walling Foundations for masonry glazing in window Cladding and sheeting walls and door framesFixing of roofs tiles and Structural steel work Structural steelwork Sheeting Corrosion protection of (sundry items)Structural timberwork structural steelwork Timber flooringMedium pressure pipelines Bedding (pipes) Cable ducts Sewers Stormwater drainage Erf connections Pipe jacking Cement –mortar lining (water) Roads (general) of pipes and pipelines Subbase Base Bituminous surface Asphalt base and Segmented paving treatment surfacing Kerbing and channeling Ancillary roadworks Base-heavy Base (light pavement structure) Supply of crushed stone base pavement Railway sidings (trackwork) Cement plaster structures



Part 4 : Site Information

Describe the site and access to the site as at the time of tender to enable the tenderer to price his tender offer and to decide upon his method of working and programming.

examples

1. report on founding conditions

2. Building will be occupied during upgrading contract

NB Forms basis of claims if situation is different from what is described.



Activity 4: Evaluate tender offers

• Open and record tender offers received

• Determine whether or not tenders offers are complete

• Determine whether or not tender offers are responsive

• Evaluate tender submissions

• Perform a risk analysis on preferred tenderer.

• Prepare a tender evaluation reportControl point: Confirm recommendations contained in the tender evaluation report.



Standard Conditions of Tender: employer’s undertakings

Opening of tenders

• Record particulars

-name of tenderer

-the total of prices

-preferences claimed

• Make information available

to interested parties

F.3.5.2

Register contractaward

cidb website




Disqualify tenderer if corrupt or fraudulent practices are detected

F.3.7

Links to Code of Conduct




Test for responsiveness

A responsive tender submission is one whicha) satisfies the requirement of the tender data;b) has been properly and fully completed and signed; andc) 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.

F.3.8

SCM processes




Arithmetical errors

Check responsive tender offers for arithmetical errors, correcting them in the following manner:•Amount in words govern.•In a bill of quantities (or schedule of quantities or schedule of rates) the line total applies and the rate shall be corrected. Where there is an obviously gross misplacement of the decimal point in the unit rate, the unit rate will be corrected.•The total of the prices applies 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.

F.3.9

SCM processes



Ranking and scoring of responsive tenderers

Do so in terms of method nominated in Tender Data

F.3.11

SCM processes



Method 1: Financial offere.g. emergency

1) Rank tender offers from the most favourable to the least favourable comparative offer.

2) Recommend highest ranked tenderer for the award of the contract, unless there are compelling and justifiable reasons not to do so.



Method 2:Financial offer and preferences

1) Score tender evaluation points for financial offer.

2) Confirm that tenderers are eligible for the preferences claimed and if so, score tender evaluation points for preferencing

3) Calculate total tender evaluation points.

4) Rank tender offers from the highest number of tender evaluation points to the lowest.

5) Recommend tenderer with the highest number of tender evaluation points for the award of the contract, unless there are compelling and justifiable reasons not to do so.



Method 3:Financial offer and

quality (when appropriate)

1) Score quality, reject all tender offers that fail to score the minimum number of points for quality stated in the Tender data, if any.




5) Recommend tenderer with the highest number of tender evaluation points for the award of the contract, , unless there are compelling and justifiable reasons not to do so.



Method 4: Financial offer, quality and preferences

1) Score quality, reject all tender offers that fail to score the minimum number of points for quality stated in the Tender data, if any.


3) Confirm that tenderers are eligible for the preferences claimed, and if so, score tender evaluation points for preferencing.



6) Recommend tenderer with the highest number of tender evaluation points for the award of the contract.



Highest price (or discount)

))(

(1m

m

P

PP

))(

(1m

m

P

PP

Lowest price (or percentage commission/fee)

Pm = comparative offer of the most favourable

P = comparative offer of the offer being scored

F.3.11.2



Scoring price and preference

Ps = 80 (1- (Pt – Pmin)) Pmin

WherePs = Points scored for financial offer of tender under considerationPt = Rand value of financial offer under consideration Pmin = Rand value of lowest acceptable financial offer

Total points

= Points for financial offer + points for preference

or 90 depending upon the value



Scoring financial offer, quality and preference

Quality scorescore for quality (Sq) using the following formula:

Sq = W2 x So/Ms

where W2 is the percentage score given to quality (remainder allocated to financial offer eg 60% quality and 40% to financial offer)So is the score for quality allocated to the submission under considerationMs is the maximum possible score for quality in respect of a submission



Financial offer

Score financial offer using the following formula:

Ss = Pmin X W3 or (1- (Pt – Pmin)) X W3 Pt Pmin

Where Ss = the percentage scored for price of the tender

submission under consideration;Pmin = the lowest acceptable tender submission Pt = the price of the tender submission under

considerationW3 = percentage allocated for price

Note: negative numbers result if Pt > 2 x P min



Preferential Procurement Policy Framework Act

Act does not make reference to functionality. The regulations, however, do. The Act only provides for tender price + preference.

• Total points not equal to price + quality + preference

• Total points equals tender price (combination of points for quality and financial offer) + preference



Combine quality and financial offerThe score for quality and financial offer is to be combined, before the addition of the score for

preference, as follows:

WC = W3 x (1+(S-Sm)) Sm

Where W3 is the number of tender evaluation points for quality and financial offer and equals 80 / 90S is the sum of score for quality and financial offer of the submission under consideration Sm is sum of the score for quality and financial offer of the submission scoring the highest number of points

Standard method



Risk analysis

Does any of the following present an unacceptable commercial risk?:

a)unduly high or unduly low tendered rates or amounts in the tender offer;

b)contract data provided by the tenderer; or

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

If so overlook tenderer (justifiable reason)



Tenderers (reasons for not awarding):

• may not be subject to restrictions eg listed on Register of Tender Defaulters

• must have the capability and capacity to perform the contract.

• must have legal capacity to enter into the contract.

• must be solvent• must satisfy all legal requirements, eg no

tax clearance.• may be disqualified due to conflicts of

interest.



Tender evaluation report

Prepare report as per employer’s requirements

Remember that written reasons must be given for decisions taken. State reasons for rejecting a tender so that tender evaluation committee can confirm / overturn decisions.



Activity 5: Award contract

• Notify successful tenderer and unsuccessful tenderers

of outcome

• Compile contract document

• Capture contract award data

Control point:

formally accept tender offer

Contract concluded

Suitable point for capturing of data pertaining to the

procurement




Form of offer and acceptance

1 Offer

2 Acceptance

Schedule of deviations

Note: Tenderer signs offer and employer signs acceptance to form the contract.

The schedule of deviations records the items that have changed between offer and acceptance

Employer signs acceptance

portion



Register contractAward

cidb website

Register of projects

(deemed to satisfy provisions)



Activity 6: Administer contracts and confirm compliance with requirements

• Administer contract in accordance with the terms and

provisions of the contract

• Ensure compliance with requirements

Control point: capture contract completion / termination data

Register cancellation of contract

cidb website



Contact personsPlease contact the following people at the

CIDB for: Procurement related issues Nomaphoso Mkhonza Lerato Molefe

Contractor Registration issues: Wisane Maluleke Busang Tjale

Tel: 0860 10 33 53



Thank You

construction industry development board development through partnership implementing the cidb...

Documents

procurement strategies

procurement process

nb procurement documents

tender offers

procurement process

tender t1

tender notice

cidb slide