Construction Contracts
Framework for Infrastructure Delivery & Procurement Management (FIDPM)
The Framework for Infrastructure Delivery and Procurement Management (FIDPM) replaces The Standard for Infrastructure Procurement and Delivery Management (SIPDM) as of 01 October 2019. All infrastructure procurement by the various tiers of government will utilize the FIDPM from this date.
Related documents: –
FIPDM view / download here
Issue Date May 2019
Effective Date October 2019
FIPDM Instruction Note view / download here
National Treasury Instruction No. 03 of 2019/2020
Adjustments to Tender Value Ranges in terms of the cidb Regulations 2004 (as amended)
Revised tender value ranges across all grades provide for adjusting grades to take into account inflationary impacts, effective 07 October 2019.
Related documents: –
- cidb Regulation Notice view / download here
- Tender Value Range Adjustments Government Gazette Notice 42561 view / download here
Auditor-General Act of 1995 (Act No. 12 of 1995)
Auditor-General Act of 1995 (Act No. 12 of 1995) which requires that the Auditor General reasonably satisfy himself or herself that satisfactory management measures have been taken to ensure that resources are procured economically and utilised efficiently and effectively. (The Auditor General has wide powers to investigate and enquire into procurement matters and related control and is obligated to report findings either to parliament or a provincial legislative, as relevant.)
The Broad-Based Black Economic Empowerment Act of 2003 (Act No. 53 of 2003)
The Broad-Based Black Economic Empowerment Act of 2003 (Act No. 53 of 2003) requires that organs of state and all public entities take into account and, as far as is reasonably possible, apply any relevant code of good practice issued in terms of this Act in developing and implementing a preferential procurement policy.
cidb Regulations
The cidb publishes regulations and standards in terms of its mandate.
Regulations
- Regulations for Registration Requirements Download
- Standard for Developing Skills through Infrastructure Projects Download
- Standard For Contractor Performance Reports for Use on Construction Works Contracts (Grades 2 to 9) Download
- Standard for Indirect Targetting for Enterprise Development through Construction Works Contracts Best Practice Green Building Certification Download
- Standard for Uniformity in Construction Procurement and Best Practice Guidelines Download
The cidb Act of 2000 (cidb Act)
The Construction Industry Development Board Act of 2000 (cidb Act) defines the construction industry as “the broad conglomeration of industries and sectors which add value in the creation and maintenance of fixed assets within the built environment.” The Construction Industry Development Regulations issued in terms of this Act defines construction procurement as “procurement in the construction industry, including the invitation, award and management of contracts.” Accordingly, construction procurement involves not only engineering and construction works contracts, but also supply contracts that involve the purchase of construction materials and equipment, services relating to any aspect of construction including professional services, disposals of surplus materials and equipment and demolitions.
The cidb Act establishes a means by which the cidb can promote and implement policies, programmes and projects aimed at procurement reform, standardisation and uniformity in procurement documentation, practices and procedures within the framework of the procurement policy of government. The Construction Industry Development Regulations require that all organs of state only award construction works contracts to contractors who are appropriately registered with the cidb, advertise tenders and calls for expressions of interest on the cidb’s web based i-tender service and record the award of contracts and any cancellation or termination of a contract in the register of projects on the website.
The Competition Act of 1998 (Act No. 89 of 1998)
The Competition Act of 1998 (Act No. 89 of 1998) provides for the establishment of a Competition Commission responsible for the investigation, control and evaluation of restrictive practices, abuse of dominant position, and mergers. This Act also provides for the establishment of a Competition Tribunal responsible to adjudicate such matters and for the establishment of a Competition Appeal Court.
The Preferential Procurement Policy Framework Act of 2000 (Act No. 5 of 2000)
The Constitution requires the public procurement system to be “fair, equitable, transparent, competitive and cost effective.” The Constitution does, however, establish a procurement policy providing for “categories of preference in the allocation of contracts” and “the protection or advancement of persons, or categories of persons, disadvantaged by unfair discrimination” provided that such a policy is implemented in accordance with a framework provided for in national legislation.
The Preferential Procurement Policy Framework Act of 2000 (Act No. 5 of 2000) gives effect to these Constitutional provisions by providing a framework for the implementation of a preference points system which includes requirements for transparency in the awarding of points and the limiting of the potential economic rents associated with such a system.
The Prevention and Combating of Corrupt Activities Act of 2004 (Act No. 12 of 2004)
Download the Prevention of Corruption Act
The Prevention and Combating of Corrupt Activities Act of 2004 (Act No. 12 of 2004):
- makes corruption and related activities an offence;
- establishes a Register of Tender Defaulters in order to place certain restrictions on persons and enterprises convicted of corrupt activities relating to tenders and contracts; and
- places a duty on certain persons holding a position of authority to report certain corrupt transactions.
The Promotion of Access to Information Act of 2000, (Act No. 2 of 2000)
Download the Promotion of Access to Information Act
The Bill of Rights also gives everyone the right of access to information held by the state. The Promotion of Access to Information Act of 2000, (Act No. 2 of 2000) gives effect to this right. This Act sets out the procedures pertaining to the obtaining of public records and the grounds for refusal of access to information.
The Promotion of Administrative Justice Act of 2000 (Act No. 3 of 2000)
Download the Promotion of Admin Justice Act
The Bill of Rights contained in the Constitution gives everyone the right to administrative action that is lawful, reasonable and procedurally fair as well as the right to written reasons for adverse administrative action which affects their rights. The Promotion of Administrative Justice Act of 2000 (Act No. 3 of 2000) establishes fair administrative procedures, permits those affected by unfair administrative action to request written reasons for such administrative action within 90 days of, or when they became aware of, such actions and requires administrators to respond within 90 days of receipt of such requests.
The Promotion of Equality and Prevention of Unfair Discrimination Act of 2000 (Act No. 4 of 2000)
Download the Promotion of Equality Act
The Promotion of Equality and Prevention of Unfair Discrimination Act of 2000 (Act No. 4 of 2000) expressly prohibits the state and all persons (natural and juristic) from discriminating unfairly against any person on the grounds of race or gender through the denial of access to contractual opportunities for rendering services or by failing to take steps to reasonably accommodate the needs of such persons.
The Public Finance Management Act (PFMA) of 1999
Section 76(4) of the PFMA permits National Treasury to make regulations or issue instructions applicable to all institutions to which the Act applies concerning “the determination of a framework for an appropriate procurement and provisioning system which is fair, equitable, transparent, competitive and cost effective. Supply Chain Management Regulations, Guidelines, Practice Notes, Circulars and Instructions have been issued in terms of the PFMA. These documents are applicable to all departments and public entities with the exception of major public entities e.g. ACSA, DBSA, DENEL, ESKOM, IDT, Transnet, Telkom and TCTA. These documents address issues such as ethical standards, restricting suppliers from doing business with the public sector, codes of conduct, compliance monitoring, improving transparency, prohibition of restricted practices, tax clearance certificates etc.
The Municipal Finance Management Act (MFMA) of 2003
The Municipal Finance Management Act (MFMA) of 2003 requires each municipality and municipal entity to have and implement a supply chain management policy which is “fair, equitable, transparent, competitive and cost-effective” and complies with a prescribed regulatory framework for municipal supply chain management. This regulatory framework covers the range of supply chain management processes that municipalities and municipal entities may use, procedures and mechanisms for each type of process, disclosure of any conflicts of interests, participation in the supply chain management system of persons who are not officials, the barring of persons from participating in tendering or other bidding processes, measures for combating fraud, corruption, favouritism and unfair and irregular practices in supply chain management, the promotion of the ethics of those involved in municipal supply chain management, the delegation of municipal supply chain management powers and duties including to officials etc.
The Public Protector Act of 1994 (Act No. 23 of 1994)
Download the Public Protector Act
The Constitution also provides for the establishment of the office of Public Protector. The Public Protector Act of 1994 (Act No. 23 of 1994) permits the public to raise issues and empowers the Public Protector, acting as an ombudsman, to investigate, report on and take the necessary remedial action on any conduct in state affairs or in the public administration, that is alleged, or suspected to be improper or to result in any impropriety or prejudice. Information or evidence that suggests criminal activity is referred to the South African Police Services and the Director of Public Prosecutions. Non-compliance that renders expenditure irregular or unauthorised is referred to the Auditor General.