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News & Press: 2016 News Items

cidb Best Practice Fee

06 September 2016  
Posted by: Bert vd Heever
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How many of you know about the proposed cidb - Best Practice Fee?

In a recent communiqué with members, SAPOA says: "The cidb is concluding consultations with the public sector on the magnitude of the cidb Best Practice Fee to be applied to public sector contracts. The cidb now aims to consult with regard to the roll-out of the cidb Best Practice Fee on new construction projects in the private sector."

The proposed fee includes provisions such as:

  • a Best Practice Fee of 0,2% of the total value on the date of award of that project on Grades 7 to 9 (i.e. currently on projects exceeding R13 million);
  • a cap on construction works projects of over R1,0b;  BPF to be paid by the client to the cidb
  • a phased introduction of cidb best practice Standards
  • Standard for Performance Reports for Professional Service Providers (draft)
  • cidb Standard for Developing Skills through Infrastructure Contracts.

Last mentioned standard is a “...collaborative effort amongst the cidb, DPW, DHET and DED. For engineering and construction works, design and build, supply and services contracts, the Standard provides for a minimum contract participation goal of 0,5% of the tender value of General Building (GB) contracts and 0,25% of the tender value of Civil Engineering contracts (CE) to be allocated to workplace training in tender Grades 7 to 9. For professional services contracts, the number of skills development hours shall be not less than the professional fees in millions of Rand multiplied by 150.

It is obvious that some of the suggested provisions have not been properly thought through. A small QS firm that writes about R3 million in fees will have to spend 450 hours on skills development. That is about 3 months at say R1,500.00 per hour or R675,000.00 or almost 25% of their total fee income.

It is said that; “The income derived from the cidb Best Practice Fee will largely be used to provide valueadded services in the construction industry, in line with the cidb’s mandate.”

Please click here to download Notice 639 of 2014 on the cidb Best Practice Fee.

The above forms part of the cidb transformation framework which was presented at the cidb National Stakeholder Forum on 29 March 2016.

If you have any comments on the cidb Best Practice Fee in particular and on the cidb Project Assessment Scheme in general please communicate them to the Executive Director of the ASAQS as soon as possible.