development through partnership

cidb

IMPROVING INFRASTRUCTURE

DELIVERY

THE CIDB APPROACH

Ms Inba Thumbiran

Programme Manager: Procurement and Delivery

Email: inbat@cidb.org.za

1

Minister Pravin Gordhan – 2010 Budget Speech

• A major site of both wastage and inefficiency is in our

procurement system. Through a combination of corrupt

practices, inefficient procurement, poor planning and, in

some instances, collusion by the private sector, we are not

getting the kind of value from our purchases that our people

deserve.

• Corruption is an ever present threat to our ambitions. All South

Africans must constantly and consciously work to root out

this cancer.

• If we are to address this scourge, we need improved

management capability, governance, enforcement, and

oversight in government, and in the business sector.

• Greater transparency and accountability in procurement

systems will therefore be a key focus of reform in the period

ahead.

2

Procurement reform: National Treasury / CIDB

• NT Legislation enforcing procurement reform

– PFMA / MFMA (link requirements of the Constitution)

• PPPFA (Procurement Models – 80/20 and 90/10)

• SCM Regulations (reference to CIDB Standard)

• CIDB: Construction Procurement Standards

– Primary objective

• Good governance - Application of a system that is fair,

equitable, transparent, competitive and cost effective

– Secondary objective

• Use of procurement as an instrument of social and

economic policy - social considerations for growth &

development (BBBEE)

» Contractor Development

» Skills development

» Prevention of HIV Aids in construction

» Job creation

» Women in Construction3

CIDB Mandate: Act 38 of 2000

• Promote sustainable growth of the construction industry and the sustainable participation of the emerging sector in the industry

• Promote improved performance and best practice of public and private sector clients, contractors and other participants

• Promote procurement and delivery management, the uniform application of policy throughout all spheres of government, uniform and ethical standardsincluding a Code of Conduct

• Establish Registers as a tool to systematically regulate and monitor the performance of the industry and its stakeholders

• CIDB prescripts issued in terms of the CIDB Act of 2000:

– CIDB Code of Conduct for the Parties engaged in

Construction Procurement

– CIDB Standard for Uniformity (SFU)

in Construction Procurement.

Applicable to

public and

private sector

MANDATORY for public sector

(departments, municipalities and

state owned enterprises)

CIDB Regulation Requirements

5

CIDB Regulations: Part IV

• Toolbox of options for Clients

• CIDB Standard for Uniformity in Construction

Procurement establishes minimum requirements for:

– the solicitation/advertising of tender offers;

– the manner in which quality is to be incorporated

in procurement documents;

– the formatting and compilation of procurement

documents; and

– the application of the Register of Contractors

(RoC) to public sector contracts.

6

Procurement Risks

• Lack of proper planning

– Lack of clarity of the expected outcomes

– Inadequate briefs, ill-conceived briefs or an absence of a brief.

– No incentives for containing cost

• Lack of integrity in the procurement process

– Exclusion of qualified tenderers from competing for tenders

– Unfair and inequitable treatment of tenderers

– Subjective and biased scoring of evaluation criteria

• Lack of transparency in the procurement process

– Allow corrupt and irregular practices to continue

– Procurement objectives / goals cannot be easily verified / measured

• Failure to achieve secondary objectives

• Inefficient procurement system

– Corrupt practices / fraudulent practice;

– No control of costs

• fruitless and wasteful expenditure;

• overspending / under expenditure

• unauthorised expenditure / irregular expenditure 7

Status quo……

• Public sector infrastructure projects in South Africa are

currently delivered using a traditional pre-planned

approach to construction

• Design and specifications must be adequately developed

and approved by clients before tenders are invited.

• Enables the design to meet the client’s requirements

closely and the contract when awarded can proceed

without major change, delay or disruption.

• This model works best when:

– the public authority has adequate in house capabilities and

capacity to either undertake the design or to brief consultants

and to oversee the design process; and

– there is adequate time to complete the design and associated

documentation before tenders for construction are invited.

8

Problem with the status quo….

• Public authorities are today under pressure to deliver

projects, on time, on budget, within shorter time frames. (No

technical skills........study undertaken by Allison Lawless)

• Led to the “fast tracking” of the traditional pre-planned

approach to construction by the streamlining of procedures to

minimise delays between activities and to permit activities to

be undertaken out of sequence.

• This has resulted in tenders for construction works being

awarded where the works are not fully or precisely scoped.

• In many instances, this has led to very disappointing

outcomes e.g. the final cost of the construction works for the

2010 world cup stadia

9

CIDB TURN-AROUND STRATEGY

10

Dr Martin Barnes

• “Stupidity is doing the same thing over

and over again, and each time wishing

for a different outcome”• Change in the UK Construction Industry was fuelled

by “strong dissatisfaction with the traditional

procurement and management approaches”!!!

• UK – Office for Govt Commerce (OGC)

– outlawed traditional, non integrated procurement

options on 1 June 2000

– Common Minimum Standards issued in June 2006

LATHAM REPORT (1994)

• Clients are at the core of project

delivery process

• Clients are the driving force behind any

agenda for change

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Sectoral Procurement Strategies

• Stop the generic nonsense! Not a “one size fits all”

environment…. its about “horses for courses”…what

is best suited for your project specific challenges!

• Better planning requires clients to be “more” informed

• Informed decision making = smart decisions

• Better choice of permutations in the CIDB SFU ––

options must be tailored to your environment (Have u

studied the regulations? Have u engaged the CIDB?

Is your team CIDB accredited?)

• Think “out of the box” eg. Limpopo Schools Project

• Outcome could surprise u = simpler /

better / faster……….delivery!

13

14

CIDB GATEWAY PROCESSInfrastructure planning and

implementation processes and

controls in many organs of state

have remained unchanged over

the last few decades, despite the

outsourcing of most of the

implementation to the private

sector. At the same time, tighter

controls are required to align

infrastructure investment to the

social and economic development

agenda of government and to

ensure value for money.

This practice note:

• outlines planning and

implementation phases which

integrate with the range of

construction procurement

practices promoted by the cidb;

•provides a gateway process to

improve project outcomes and to

manage project risk.

Standard for

Uniformity

Legislative Framework

The Constitution

PFMA / MFMA

PPPFA

BBBEE

CIDB Act + Regulations

Other relevant Act’s

Client

Procurement

Policy

Procurement

directives

Standard Operating

Procedures

CIDB CODE OF CONDUCT!!!

CIDB Best

Practice

Guidelines

CIDB Framework for public sector procurement

CIDB inform

Practice

Notes

15

CIDB

Standard Bid

Packages

CIDB

GATEWAY!!!!

GATEWAY REVIEW PROCESS

16

CIDB Performance based Procurement Framework

Goal (end

objectives)

Planning: Procurement system fair,

equitable, transparent, competitive and

cost effective and promote additional

objectives to the procurement itself

Qualitative

requirements

Decisions: Procurement Strategy +

Contracting Strategy + Pricing Strategy +

Form of contract = achievement of primary

and secondary objectives

Quantitative

requirements

Choices: Rule based system established

in cidb Standard for Uniformity - criteria to

achieve the qualitative requirements, set

parameters / indices for measurement

Evaluation Application: Control points in the process

that the rules have been applied

Level 1

Level 2

Level 3

Level 4 17

CIDB inform

Practice Notes

Goal (end

objectives)

Qualitative

requirements

Quantitative

requirements

Evaluation

Level 1

Level 2

Level 3

Level 4

4-level performance-based procurement framework

Integrity

Management

Managing

the risk

that

objectives

are breached

18

Few things are harder to put up with,

than the annoyance of a good

example

……..…Mark Twain

19

eThekwini Water and Sanitation Project

• Level 1

• Level 2

• Level 3

• Level 4

• PRIMARY: REPLACEMENT OF

THE CITY’S ASBESTOS

CEMENT WATER MAINS.

• SECONDARY: CONTRACTOR

DEVELOPMENT / EPWP

• NEC 3 ECC(TARGET COST -

CAPPED BUDGET)

• PACKAGED ORDERS BASED

ON PERFORMANCE

• CIDB SFU

• NEC CONTRACT SYSTEM

• ETHEKWINI SCM CONTROL

COMMITTEES

• CIDB GATEWAY PROCESS

20

CIDB Monitoring and Compliance: Part V

CIDB SFU

• Allows for auditing to take

place at any stage in the

procurement process

(especially after the award of

a contract)

• Risk related to corrupt

activities is better managed

• Identification of irregular

and unauthorised

expenditure early in the

process

• Overspending managed and

controlled

CIDB Code of Conduct

• Conduct investigations

• Sanction offenders

• Suspend offenders from the

CIDB RoC

• Issues fines to Employers up

to R100 000

• Intergovernmental Relations

Framework Act

– Treasury

– Public Protector

– Auditor General

21

W-I-P

• Designing, developing and promoting the

appropriate delivery models to improve the

rate at which the public sector delivers

infrastructure projects

• CIDB Delivery Management Toolkit, major

upgrade to ensure content is relevant to the

turnaround in infrastructure delivery in the

public sector

• Implementation in partnership with SPAID

and IDIP (National Treasury / DBSA / NDPW

/ CIDB)

22

23

CHANGE MANAGEMENT??

THANK YOU – THE END

24

development through partnership

cidb