Construction Industry Development Board Act, 2000 (Act No. 38 of 2000)

Notices

Best Practice Project Assessment Scheme: Standard for Contract Participation Goals for Targeting Enterprises and Labour through Construction Works Contracts

4. General
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4.1Target Areas

 

The target areas that may be used in terms of this Standard shall be restricted to the following geographic areas:

(a)one or more Provinces;
(b)one or more Metropolitan and District Municipalities;
(c)one or more Local Municipalities; or
(d)one or more Wards that are wholly located within an area within a predefined radius of the construction activity.

 

4.2Enterprises Categories

 

The enterprise categories that may be used in terms of this Standard shall equate to the enterprise categories defined in the most recent Sector Code of Good Practice issued under the Broad-Based Black Economic Empowerment Act relevant to the enterprise being targeted.

 

Informative: The enterprise categories in terms of the draft Construction Sector Code (June 2016) are given in Table 1.

 

Table 1. Enterprise Categories

Enterprise Category

Total Turnover

(less than)

Approximate cidb Grade

for Contractors

Large Enterprise

greater than Grade 7

Qualifying Small Enterprise (QSE)

R50m pa

Grade 6 to 7

Exempt Micro Enterprise (EME)

R10m pa

less than Grade 6

 

4.3        Skills Categories

 

The skills categories for labour that may be used in terms of this Standard shall be restricted to the categories given in Table 2.

 

Table 2. Skills Categories

Skills Category

Definition

Skilled

Typically craft or skilled occupations where the employee is capable of working efficiently and exercising considerable independent judgement and of discharging his/her duties with responsibility. He/she must possess a thorough and comprehensive knowledge of the trade, craft or industry in which he/she is employed.

Semi-skilled

Typically operator occupations where the employee does work generally of defined routine nature wherein the major requirement is not so much of the judgment, skill and but for proper discharge of duties assigned to him/her or relatively narrow job and where important decisions made by others. His/her work is thus limited to the performance of routine operations of limited scope.

Unskilled

Typically elementary occupations where the employee does operations that involve the performance of simple duties, which require the experience of little or no independent judgment or previous experience although familiarity with the occupational environment is necessary. His/her work may thus require in addition to physical exertion familiarity with variety of articles or goods.

 

4.4Designated Groups

 

Unless otherwise permissible in terms of procurement regulation or the PPPFA, the designated groups that may be used in terms of this Standard for defining the ownership and/or control of targeted enterprises shall be restricted to1,2:

(a)        black people who:

(i)are citizens of the Republic of South Africa by birth or descent; or
(ii)became citizens of the Republic of South Africa by naturalisation:

• before 27 April 1994; or

• on or after 27 April 1994 and who would have been entitled to acquire citizenship by naturalisation prior to that date;

(b)women who are South African citizens;
(c)youth as defined in the National Youth Commission Act of 1996;
(d)people with disabilities as defined in the Code of Good Practice on employment of people with disabilities issued under the Employment Equity Act;
(e)unemployed persons not attending and not required by law to attend an educational institution and not awaiting admission to an educational institution; and
(f)black military veterans who qualifies to be called a military veteran in terms of the Military Veterans Act 18 of 2011.

 

4.5Targeting

 

The following targeting principles shall apply:

(a)The employer shall only specify contract participation goals where a feasibility study has been undertaken at a programme level or at a project level to verify that the contract participation goal can realistically be achieved within the targeted area. Such feasibility study shall be included in the contract data. Guidelines for undertaking a feasibility study are given in Appendix A.
(b)Contract participation goals established for targeted enterprises and for targeted labour shall apply to the construction works contract in total (i.e. including the principal contractor, subcontractors and service providers to the construction works contract). Unless where specified in other legislation, no sub-division of contract participation goals by principal contractor, sub-contractors or service providers is allowed.

Note: If a CPG is established for targeted enterprises, and if the principal contractor falls within that definition of the targeted enterprises, provided that the principal contractor is from the targeted area, the work undertaken by the principal contractor will then contribute towards the CPG.

(c)Targeting of labour by skills categories is only permissible within categories of semi-skilled and unskilled labour.
(d)Contract participation goals can be specified in terms of individual enterprise categories and in terms of individual skills categories.

Note: For example, CPGs can be specified individually for qualifying small enterprises and exempt microenterprises, and for semi-skilled and unskilled labour.

(e)Targeting of enterprises which are owned and/or controlled by designated groups shall not be specified unless:

• such targeting is permissible in terms of procurement regulations or the PPPFA Preferential Procurement Regulations; or

• such targeting is accompanied by targeted developmental outcomes associated with the targeting3 (Section 4.1).

(f)Contract participation goals shall only be specified in terms of one target area for each contract participation goal.

Note: For example, contract participation goals for semi-skilled labour cannot be specified both at (a) a Metropolitan or District Municipality as well as (b) a Local Municipality.

(g)Where the construction works crosses one or more geographic areas (such as roads, pipelines, etc.), the target area shall be based on one or more Wards that are wholly located within an area within a predefined radius of the construction activity.
(h)Contract participation goals for targeted enterprises shall not prescribe rates, prices or profit margins that will be applicable to the targeted enterprises or targeted manufacturers and suppliers.

 

                                                                                                           

 

1After draft Construction Sector Code (June 2016)
2After PPPFA (2017). Preferential Procurement Policy Framework Act, 2000: Preferential Procurement Regulations, 2017. Government Gazette No. 40553, 20 January 2017
3cidb Inform Practice Note 32: Allocating Sustainable Work Opportunities to Contractor Development Programmes, July 2012