Construction Industry Development Board Act, 2000 (Act No. 38 of 2000)NoticesBest Practice Project Assessment Scheme: Standard for Contract Participation Goals for Targeting Enterprises and Labour through Construction Works ContractsAppendixesAppendix A : Guidelines for Undertaking a Feasibility Study for Specifying CPGs |
Appendix A : Guidelines for Undertaking a Feasibility Study for Specifying CPGs
The objective for a feasibility study for contract participation goals (CPGs) for construction works contracts is to inform the determination of achievable CPGs for targeted enterprises and labour for various targeted areas, and to assess possible risks to the employer associated with the specification of such CPGs.
The feasibility study should be undertaken at concept and viability stage, which establishes the detailed brief, scope, scale, form and control budget, and sets out the integrated concept for one or more packages (Stage 4: Concept and Viability: National Treasury Standard for Infrastructure Procurement and Delivery Management (SIPDM)).
| A1. | Targeted Enterprises: other than Manufacturers and Suppliers |
As CPGs for targeted enterprises must be expressed in terms of percentage of total contract amount, the following must therefore be known or estimated:
| (a) | the estimated tender value of the construction works contract; |
| (b) | the capability requirements4 of the principal contractor and subcontracting opportunities; and |
| (c) | the available capacity5 of the targeted enterprises, within the targeted areas by enterprise category. |
In general, the larger the targeted area, the more scope will exist for targeted enterprises with higher capability (such as higher cidb Grade).
For construction related works packages that can be subcontracted to and undertaken by targeted enterprises, the targeted enterprises should be cidb registered or should meet the competence requirements of the cidb Competence Standard for Contractors6. Information on cidb registered contractors by Class of Works and Grade by province can be obtained from the cidb Register of Contractors.
Information on cidb registered contractors at a metropolitan, district or local municipality level can be obtained from the cidb on request. Further information on potential targeted enterprises, and in particular at district and local municipality level, should be obtained from local surveys.
Information on the available capacity of targeted enterprises by targeted areas should be included in the feasibility study in support of estimating the achievable CPGs.
| A2. | Targeted Enterprises: Manufacturers and Suppliers |
As CPGs for targeted manufacturers and suppliers must be expressed in terms of percentage of total contract amount, the following must therefore be known or estimated:
| (a) | the estimated tender value of the construction works contract; |
| (b) | the estimated requirements for materials and products that can be provided by targeted area, together with the required specifications and quality standards; and |
| (c) | the available capacity7 of the manufacturers and suppliers, within the targeted areas by enterprise category, that can provide materials and products to the required specifications and quality standards. |
In general, the larger the targeted area, the more scope will exist for targeted manufacturers and suppliers with larger capacity.
Information on the available capacity of targeted manufacturers and suppliers by targeted areas should be included in the feasibility study in support of estimating the achievable CPGs.
| A3. | Targeted Labour |
For CPGs for targeted labour expressed in terms of percentage of total labour, the following should therefore be known or estimated:
| (a) | the estimated number of person days to be provided in the construction works by skills category; and |
| (b) | the available labour within the targeted areas by skills category. |
For CPGs for targeted labour expressed as the sum of the wages and allowances expressed as a percentage of the contract amount, the following should therefore be known or estimated:
| (c) | the estimated number of person days to be provided in the construction works by skills category; |
| (d) | the applicable labour rates by skills category; and |
| (e) | the available labour within the targeted areas by skills category. |
In general, the larger the targeted area, the more scope will exist for targeted labour with higher skills levels.
Information on the available capacity of targeted enterprises by targeted areas should be included in the feasibility study in support of estimating the achievable CPGs.
Cognisance must also be taken of the impact of demobilisation of labour on project closure.
| 4 | i.e. technical competence, track record and capacity requirements |
| 5 | i.e. the amount of work that can be undertaken in addition to current workload |
| 6 | cidb Competence Standard for Contractors, gazette 39074 of 7 August 2015, accessible on www.cidb.org.za |
| 7 | i.e. the amount of work that can be undertaken in addition to current workload |