1. Aligning SCM processes to facilitate implementation
Implementing the CIDB Standard for Uniformity in Construction Procurement 3a
Aligning SCM processes to
facilitate implementation

2. 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

3. A need triggers the procurement process
Principal activities associated with the procurement process
1 Establish what is to be procured
2 Decide on procurement strategies
3 Solicit tender offers
4 Evaluate tender offers
5 Award contract
6 Administer contracts and confirm compliance with requirements
Methods
Procedures
Policy
Provision of works, services, supplies concludes the procurement process
Components of a procurement system

4. @cidb 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

5. 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

6. Registers & Procurement Interactions
1. Determine approximate contractor grading requirements e.g 5 GB
Reg Con
3. Validate CIDB Registration
4. Validate Contractor Grade
1. Establish
what is
to be
procured
2. Determine
Procurement
strategy
3. Solicit
tender
offers
3.a Tender
Offers by
contractors
4. Tender
Evaluation
&
Contractor
selection
5. Award
contract
6. Manage
contractor
2. Advertise using iTender, indicating approximate contractor grading requirements
Reg Proj
5. Register Award
6. Register Completion (optional)

7. 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

8. Activity 2: Decide on procurement strategies Establish applicable
preferential procurement policy
contract and pricing strategy
targeting strategy
procurement procedure
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 are the preferencing arrangements?
What procedure is required to solicit tender offers?
Control point: obtain approval for procurement strategies that are to be adopted

9. 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

10. 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
Procurement procedure
Control point : confirm short-list

11. 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.

12. Standardised procurement documents Tendering 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
CIDB Standard conditions of tender
Examples in CIDB Standard of Uniformity
CIDB Standard of Uniformity
Standard Industry Form of Contract with contract specific data
Project specific
SANS (SANS 1921, SANS 2001 and 1914)
Project specific (SANS 10403)

13. @cidb generates this notice
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

14. 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 ………

15. 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
Employer’s undertakings
NB Conditions facilitate compliance with several requirements of MFMA - SCM Regulations
Impacts on SCM
processes

16. Tenderer’s obligations
Eligibility Cost of tendering
Check documents Confidentiality and copyright of documents
Reference documents Acknowledge addenda
Site visit and clarification meeting Seek clarification
Insurance Pricing the tender offer
Alterations to documents Alternative tenders Information and data to Submitting a tender offer be completed in all respects
Closing time Tender offer validity
Clarification of tender offer after Provide other material
submission Submit securities, Inspections, tests and analysis bonds, policies, etc.
Check final draft Return of other tender documents Certificates

17. The Employer’s undertakings
Respond to clarification Issue Addenda
Return late tender offers Opening of tender submissions
Two-envelope system Non-disclosure
Grounds for rejection and
Disqualification Test for responsiveness
Arithmetical errors Clarification of a tender offer
Evaluation of tender offers Insurance provided by the employer
Acceptance of tender offer Notice to unsuccessful tenderers
Prepare contract documents Issue final contract
Complete adjudicator's Provide copies of the contract contracts

18. 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

19. CIDB Standard for Uniformity in Construction Procurement
Preferencing schedules
Annex D: Direct Preferencing
Annex E: Participation Goals
BEE

20. 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

21. CIDB Standard for Uniformity in Construction Procurement
C1.1 Form of offer and acceptance
Offer
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

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

23. On what date does the contract come into effect?
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
Option 1- tenderer comes in and collects signed contract
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

24. C1.2 Contract Data
Example
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 )
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

25. 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.

26. 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.

27. Bill of quantities Item. Ref Description Unit Quantity Rate Price
Total for section carried forward to the summary of Bill

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

29. e.g. the building shall maintain an ambient day time temperature
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, and
b) 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

30. separation of management from construction
SANS 1921 family of standards for Construction and Management Requirements
Construction
Works specifications
Plant and materials
Construction Equipment
Existing services
Site establishment
Site usage
Permits and way leaves
Alterations, additions, extensions and
modifications to existing works
Inspection of adjoining properties
Water for construction purposes
Survey control and setting out of the works
Management
Management of the works
Health and safety
Each part of SANS 1921 standardizes an aspect of requirements
separation of
management from
construction

31. 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

32. 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 frames
Fixing of roofs tiles and Structural steel work Structural steelwork
Sheeting Corrosion protection of (sundry items)
Structural timberwork structural steelwork Timber flooring
Medium 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
Under development

33. 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.

34. 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 report
Control point: Confirm recommendations contained in the tender evaluation report.

35. Make information available to interested parties
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 contract
award
cidb website

36. Disqualify tenderer if corrupt or fraudulent practices are detected
Standard Conditions of Tender: employer’s undertakings
Disqualify tenderer if corrupt or fraudulent practices are detected
F.3.7
Links to Code of Conduct

37. F.3.8 Standard Conditions of Tender: employer’s undertakings
Test for responsiveness
A responsive tender submission is one which
a) satisfies the requirement of the tender data;
b) has been properly and fully completed and signed; and c) 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

38. F.3.9 Standard Conditions of Tender: employer’s undertakings
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

39. Ranking and scoring of responsive tenderers
SCM
processes
Ranking and scoring of responsive tenderers
Do so in terms of method nominated in Tender Data
F.3.11

40. Method 1: Financial offer e.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.

41. Financial offer and preferences
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.

42. Financial offer and quality
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.
2) Score tender evaluation points for financial offer.
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.

43. 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.
2) Score tender evaluation points for financial offer.
3) Confirm that tenderers are eligible for the preferences claimed, and if so, score tender evaluation points for preferencing.
4) Calculate total tender evaluation points.
5) Rank tender offers from the highest number of tender evaluation points to the lowest.
6) Recommend tenderer with the highest number of tender evaluation points for the award of the contract.

44. Pm = comparative offer of the most favourable
P = comparative offer of the offer being scored
Highest price (or discount)
Lowest price (or percentage commission/fee) F

45. Scoring price and preference
Ps = 80 (1- (Pt – Pmin))
Pmin
Where
Ps = Points scored for financial offer of tender under consideration
Pt = 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

46. Scoring financial offer, quality and preference
Quality score
score 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 consideration
Ms is the maximum possible score for quality in respect of a submission

47. 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 consideration
W3 = percentage allocated for price
Note: negative numbers result if Pt > 2 x P min

48. 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

49. Combine quality and financial offer
The 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 / 90
S 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

50. 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
the content of tender returnables which are to be included in the contract.
If so overlook tenderer (justifiable reason)

51. 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.

52. 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.

53. Suitable point for capturing of data pertaining to the procurement
Contract concluded
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
Suitable point for capturing of data pertaining to the procurement

54. Employer signs acceptance portion
CIDB Standard for Uniformity in Construction Procurement
Form of offer and acceptance
Offer
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

55. Register of projects (deemed to satisfy provisions) Register contract
Award
cidb website

56. Ensure compliance with requirements
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
Register
cancellation
of contract
cidb website
Control point: capture contract completion / termination data

57. Contact persons Please contact the following people at the CIDB for:
Procurement related issues
Nomaphoso Mkhonza
Lerato Molefe
Contractor Registration issues:
Wisane Maluleke
Busang Tjale
Tel:

58. Thank You