emerging contractor development-kznworks.gov.za

7/29/2019 Emerging Contractor Development-kznworks.gov.Za

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MASAKHE

EMERGIN G CONTRACTOR DEVELOPMENT

PROGRAMME

HAND BOOK

PROVINCE OF KWAZUL U -NATA L

DEPARTM ENT OF PUBL IC WORKS

DEPARTMENT OF WORKS

PRIVATE BAG X904 1

PIETERMARITZBURG

3201

PROJECT LEADER: M R N.VILAKAZI

TELEPHONE: 033 -3555428/ 0823 13131 2


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M EC FOREW ORD

For M ASAKHE EM ERGING CONTRACTOR DEVELOPM ENT PROGRAM M E

I t i s a fact th a t the econom y o f our coun t ry has undergone p r o foun d res t ruc tu r ing over the years to ach ieve

grow th , emp loyment c rea t ion and pover ty e rad ica t ion . Thus , the depar t m ent o f Pub l i c Wo rks in Kw aZu lu -Nata l has

iden t i f i ed the need t o e f fec t redress in the in te res ts o f equ i t y , advancement o f cons t ruc t ion sec to r t rans fo rm at ion ,

t h e p r o m o t i o n o f SM M Es a n d t h e e f f e c t i ve e m e r g in g c o n t r a ct o r d e v e lo p m e n t p r o g r a m m e . W e h a v e r e al i ze d t h a t

the derac ia li sa t ion o f o ur econom y i s a mo ra l requ i rem ent i n keep ing w i th th e va lues and p r inc ip les o f equ i t y

enshr ined in our Const i tu t i on . W e have a lso rea li zed tha t the ex ten t to w h ich the econom ic success o f our coun t r y

has been shared by a ll o f our p eo p le i s s t i l l i nadequate fo r th e requ i rem ents o f a p rosperous and s tab le soc ie ty .

W e there fo r e fe l t t ha t th e t ime i s r igh t fo r t he in t rod uc t ion o f a focused st ra tegy fo r b ro ad-based b lack econom ic

e m p o w e r m e n t w h i c h a i m s t o c o n t r i b u t e t o t h e b r o a d e r n a t i o n a l p r i o r i t y o f e c o n o m i c a d v an c e m e n t o f a l l o u r

peop le . Out l i ned in th i s document i s the Emerg ing Cont rac to r Deve lopmen t Programm e, M asakhe wh ich w e have

no dou b t t ha t i t w i l l add impet us to the p rocess by p rov id ing g rea te r cla r i t y o f our i n ten t ions to t ransfo rm t he

cons t ruc t ion indus t ry i n th e p rov ince . The docum ent a l so seeks to h igh l i gh t th e bene f i t s o f the p ro gramm e to a l l

emerg ing con t rac to rs par t i cu la r ly CIDB Leve l 1 -5 so th a t the e f fo r t s o f the depar t m ent t o he lp t hem progress f rom

be ing emerg ing to a w e l l and se l f-susta inab le bus iness en te rp r i ses a re w e l l a r t i cu lated and gu ide them tow ards

the i r goa ls o f ach ieving econom ic independence . W e pro ud ourse lves o f t h i s p rogramm e as it w i l l he lp us ma in ta in

o u r r e p u t a t i o n o f a d e p a r t m e n t a t w o r k b u i l d in g c o m m u n i t i e s t h r o u g h c o n s t r u c t i o n .


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(MASAKHE EMERGING CONTRACTOR DEVELOPMENT

PROGRAMME

TABLE OF CONTENTS

1. PROGRAMME BACKGROUND2. OBJECTIVES OF THE PROGRAMME3. AIMS OF THE PROGRAMME4. TARGET GROUPS5. SECTOR OF THE PROGRAMME

6. CONTRACTOR SUPPORT FRAMEWORK7. ACCESS TO THE PROGRAMME8. CONTRACTOR PROGRESSION9. THE DATABASE10.JOINT VENTURES AND SUB-CONTRACTING11.CONCLUDING STATEMENT12.WHAT TO DO


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1. BACKGROUND

The KwaZulu- Natal Department of Public Works (DPW) is the custodian of Provincial Government physicalfacilities, responsible for building and maintenance of old and new facilities on behalf of Client Provincial

Departments.

Given the limited internal capacity of the Department and in streamlining its competencies around efficient

infrastructure delivery and maintenance, the bulk of the physical construction is outsourced to the

construction sector.

Inline with the Construction Sector Transformation Charter, the Department has determined it prudent toleverage of its contribution to this sector, in ensuring that the BBBEE Act objectives are realized. The

Masakhe Emerging Contractor Development (Masakhe ECDP) stands to advance historically

disadvantaged contractors through capacity building and targeted procurement, within an environment

structured for effective management.

The Masakhe ECDP will function within a robust database system, giving the Department an effective tool

for ongoing performance monitoring of participating contractors and the programme impact assessment in

relation to the sector transformation agenda.

Masakhe ECDP is designed for Contractors within CIDB level 1 to CIDB level 5, to be registered in

recognition of their CIDB grading for appropriate development support and progression within the

programme.

2. OBJECTIVES OF MASAKHE ECDP

?Effective emerging cont ractor development? Increase Department spending to emerging contractors

? Promot ion of SMMEs? Advance Sector Transformation


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3. AIMS OF MASAKHE ECDP

The aims are to:

A. Create a conducive environment in which emerging contractors can thrive, by fac ilitating access to:? Markets (DPW KZN contracts)? Financial support? Training and Mentoring? Skills transfer

B. Create an emerging contractor development mechanism, performing:? Basic business management and technical training? Implementing targeted procurement interventions? Ongoing Technical support through a mentorship plan? Linkages with Financial Institutions or Funding agencies for appropriate financing products? Ongoing monitoring and evaluation of participating contractors

C. Establish a credible database of emerging contractors, which will encompass:? A screening mechanism for profiling HDI status and technical competence? A profile verification mechanism? A performance monitoring and evaluation mechanism? Adequate elevation of participating contractors through CIDB linked grading system

4. TARGET GROUPSThe procurement policy shall apply the following HDI procurement scoring:

? Women 40%? Youth 20%? Priority Population Group 35%? Physically Disabled 5%


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} Parts of basic training

5. SECTORS OF THE PROGRAMMEThe emerging contractor development programme will focus mainly on two classes of construction work;

? Civil Engineering Work? General Building Works

The Department will determine the targeted procurement intervention in the three main categories, namely:

?Repairs and renovations? Specific Construction type of work

? Special projects work

6. PROGRAMME CONTRACTOR SUPPORT FRAMEWORKThe programme support system is managed through the database system.

Training and Development

? Business T raining:- business administration and management

? Technical training:- tendering, project costing and construction management? Mentorship:- ongoing onsite technical support and business management

Financial Support

? Introduction of ECDP contractor funding products via traditional and government funding agencies(utilizing cessions), building to established relationships between contractors and such fundingagencies

? Introduction of performance guarantee waiver principle, in lieu of Contract Retentions


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7. ACCESS TO THE PROGRAMMEThe following is the pre-requisite for the contractor to partake in the programme:

? The contractor must be actively involved in his business and its management? The contractor must be registered with CIDB? The contractor must registered with the KZN Provincial suppliers database? CIDB grade I contractor must undergo the compulsory basic training? HDI Equity Ownership should be more than 50%? The contractor must comply with the Stage entry requirement? The contractor must supply all documentary proof required as per the database rules andregulations below

ECDP STAGE CIDB Grading MAXIMUM VALUE OF CONTRACT (INCL VAT)

1 Level 1 R200 000-00

2 Level 2 R500 000-00

3 Level 3 R1500 000-00

4 Level 4 R3000 000-00

5 Level 5 R5000 000-00


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8. CONTRACTOR PROGRESSIONAdvancement from one stage to the next shall be considered when:

? The contractor has met a required level of competency as prescribed for each ECDP stage? The contractor has successfully completed a number of projects or a required total project value? A Masakhe ECDP performance management report confirms 1 and 2 above (Certification).

The following schedule indicates the maximum number of contracts and maximum values within each stage that a

single contractor must complete before advancing to the next stage or exiting the programme.

STAGE MAXIMUM CONTRACT

VALUE

MAXIMUM NUMBER OF

ANY PROJECTS

MAXIMUM ACCUMULATED

CONTRACT VALUES IN

THE STAGE

1 R200 000-00 3 R6 00 000-00

2 R500 000-00 3 R1 000 000-00

3 R1,500 000-00 2 R3 000 000-00

4 R3 000 000-00 2 R5 000 000-00

5 R5000 000-00 1 R7 000 000-00

NOTE: The CIDB Grading will always apply for progression purposes within the programme, ensuring that progress

or growth realized outside the Masakhe ECDP is not disregarded.

9. Emerging contractor databaseThe ECDP shall be managed through a robust and dynamic database system, creating a platform for easy

access to update information and to record and track emerging contractor progress.


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Registration and Profil ing

The minimum requirements for admission into the Masakhe ECDP

? Registration with Provincial Treasury Supplier Database ZNT registration? Registration with CIDB? Undergone the determined DPW KZN Basic T raining (for CIDB level 1)

Database formulation

The DPW reserves the right to limit the number of emerging contractors it registers in order to manage the

development of contractors efficiently and effectively.

The database will be reviewed quarterly to ensure that the participating emerging contractors continue to

comply with the requirements and objectives of the program.

To allow for new contractors to enter the program, however shall be guided by the performance in

progression of the contractors within the program, in ensuring that the database is not expanded beyond the

development capacity of the program.

Database Rules and Regulations

? DoW may accept or reject applications? No duplication of members across companies? The rebirth of companies will not be allowed? Applicants who are job seekers will not be allowed in the program.? Fronting will not be tolerated? Contractors within the program. may form joint ventures with each other? All contractors must fully comply with all legal company and statutory requirements? Contractors must submit ID documents of owners; Company registration documents and financial

information? Must supply Tax Clearance Certificate? Contractors found guilty of any criminal offence by Court of Law shall not be considered.? Joint ventures with non-participating established companies may only be allowed at the sole

discretion of DPW KZN

? Level cooperation


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10. Joint ventures and subcontracting

Joint Ventures

Joint ventures and sub contracting will only be considered to benefit the MASAKHE ECDPcontractors in projects

outside of the program, due to project scale and complexity. These will be encouraged through the prescripts of

tender documents of such projects, encouraging the use of the MASAKHE ECDPcontractors

Joint Ventures with the Programme will be considered on the following basis:

? If there is valid joint venture agreement spec ifying HDI Contractors participation? Partners will be individually subjected to the 80/20 or the 90/10 point allocation? Joint-Ventures must demonstrate equal commitment by the two parties involved? The purpose must be to combine resources, share challenges and grow the two parties involved.

Sub-Contracting

? Must be between established contractors and lower stage emerging contractor? Must commence from tenders worth more than R3M? Must serve to transfer skills? Must be observed and monitored by DPW? There must be sub contracting agreement? The maximum worth of work sub contracted must be 30%? Skill transfer must be measured? Payment to smaller contractors must be in line with the agreement signed? Established companies that have continuously been awarded tenders must develop a mentorship

programme for emerging contractors.


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Concluding Statement

The Emerging Contractor Development Programme (ECDP) is one of the flagships developmental initiatives in the

Province and is a catalyst for industry transformation. The Province of KwaZulu Natal through the DPW has adopted

a world class programme to promote social and economic development in South Africa and KZN in particular.

We invite and urge all Emerging Contractors in our province , Mentors alike, to use this opportunity as a tool for

change, a tool to bridge the divide in the industry, a tool to help us develop our province.Together we can do better.

MASISUKUME SAKHE.


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WHAT TO DO

For more information and registration

? Visit the DPW KZN Regional Office ECDP desk

North Coast Southern Region

Private Bag x42 Private Bag x9041

Ulundi Pietermaritzburg

3838 3200

(035)874 3349 (033) 355 5500

Midlands Region Ethekwini Region

? Private Bag Private Bag x54336? Ladysmith Durban? 3370 4000? (036) 638 2800 (031) 203 2100Visit the DPW KZN website

www.kznworks.gov.za

Contact the Masakhe ECDP Unit at the DPW KZN head office

191 Prince Alfred street

Pietermaritzburg

3201

(033) 3555429

Sources of information:

? The Masakhe ECDP document? The Masakhe ECDP handbook? The Database list

? The registration schedules? Registration form.

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