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Contracts on a construction project are not limited to standard form contracts such as the JBCC, MBSA, FIDIC, GCC or NEC. On a construction project, one will often find supplier agreements used for material supply, plant and labour hire, purchase agreements etc.

A few standard form supply contracts are available, however the use thereof is not widespread. It is more common for suppliers to use bespoke supply agreements. This article delves into some of the basics of supplier agreements and provides a few pointers on good practice.

A supplier agreement has the same basic elements as a standard form contract or any contract for that matter. The fundamental requirements of any contract are:

  • Both parties must have capacity to act.
  • There must be an offer and acceptance.
  • The agreement must have certainty.
  • The objectives of the contract must be legal.
  • The obligations of the parties must entail performance that is possible.

Contracts are largely governed by the common law, however, the additional legislation applicable to contracts in South Africa include, inter alia:

  • The Constitution (the supreme law of the land).
  • The Consumer Protection Act.
  • Protection of Personal Information Act.

It is common for suppliers in the construction industry, when engaging with a new customer for the first time, to request the customer to complete a credit application form. This is usually done when the supplier provides payment terms for example, a 30-day period.

The general terms of the credit application include, inter alia, the following:

  • Contact details of the applicant.
  • Registration details.
  • Personal and contact details of directors and other key contact personnel.
  • Terms and conditions relating to the provision of credit.
  • Sometimes include a surety agreement for the individual signing on behalf of the applicant.

The terms and conditions of supply are usually independent of the credit application form and ideally should address, inter alia, the following points:

  • Details of both parties.
  • General terms which include variations, lead times, responsibilities of the parties, price/rates, payment terms, delivery date etc.
  • It is important to include terms relating to quality management. This may include quality interventions, standards and/or requirements that the supplier must adhere to or quality interventions that the customer has to implement on receipt of the material/commodity.
  • Terms relating to liabilities and insurances.
  • Supplier’s delivery guarantees during the period of the promised lead time.
  • Processes of dispute resolution or termination clauses.
  • Process to be implemented in instances of breach of agreement.
  • When importing goods/material, to include terms relating to fixed exchange rate or forward cover.
  • Penalties if applicable.

It is advisable to follow up regularly on the progress of supply contracts in the same manner as progress is monitored on construction contracts. From the supplier’s point of view, it is an opportunity to identify and raise any issues/concerns with regard to the progress of the order and obtain alignment with the buyer.

It also benefits both the supplier and contractor to establish a long-term relationship for regular items of supply. This provides an opportunity for the parties to become accustomed to working with each other and develop a symbiotic relationship. In addition, the supplier is able to offer better pricing and/or payment terms.

Bilaal Dawood

Head: Membership Services

Lifting operations are inherent to many occupations in the construction industry. They can be performed manually or by using lifting equipment. Both manual lifting and mechanical lifting operations can put construction workers at great risk of injury or death. The costs of accidents and ill health related to lifting operations are immense. This article describes the risks associated with lifting operations in the construction industry and discusses measures to reduce the risks associated with using lifting machinery namely, tower cranes, mobile cranes and gantry cranes.

Lifting Machinery 

Lifting machinery such as Tower Cranes, Mobile Cranes, Gantry Cranes, Teleporters and Hoists must be designed and constructed in accordance with generally accepted technical standards. Lifting machinery and all its components must be thoroughly examined and subjected to a performance test, also known as a load test. This load test must be performed as prescribed by the standards to which the lifting machinery was manufactured. The load test must be carried out by a competent person that has been certified by the Engineering Council of South Africa as a Lifting Machine Inspector (LMI). The whole installation must be subjected to these performance tests before it is put into use, every time it is dismantled and assembled and thereafter at intervals not exceeding 12 months.

In addition to load testing, lifting machinery and all components that form an integral part of the lifting machinery, must be examined by a competent Lifting Machine Inspector (LMI) every 6 months. The findings of the inspections as well as the load test results must be recorded in a register. This register must be kept on the site or premises where the machinery is used.

All lifting machinery must be clearly marked with the Maximum Mass Load (MML) which it is designed to carry safely. If the mass load varies with the conditions of use, then a table showing the maximum mass load for each position must be posted where it is visible to the operator.

Lifting machinery such as Tower Cranes must have a brake or device capable of holding the maximum mass load should the power supply fail. This will prevent the uncontrolled downward movement of the load. Tower Cranes must also be fitted with suitable limiting devices to prevent overloading.

Lifting machinery may only be operated by a person who is specifically trained to use that particular type of machinery. Operators of lifting machinery must receive annual medical tests and be declared fit to operate the type of machinery for which they are appointed to operate.

Lifting Tackle

Just like lifting machinery, lifting tackle such as chains, chain slings, ropes, straps, shackles and hooks must also be subjected to a load test. The load test must be done by a competent person. In addition to the load testing, all lifting tackle must be inspected by a competent person that has been appointed in writing at intervals not exceeding 3 months. The results of the annual load tests, as well as the 3 monthly inspections, must be recorded in a register. The register must be kept up to date and be kept on the site where the tackle is being used.

Lifting tackle should be identified and colour-coded in accordance with the 3 monthly inspections. This will make it easy for supervisors, operators and workers to see if the most currently inspected tackle is used on site.

Now that we understand the difference between lifting machinery and lifting tackle and know at what interval they must be tested and inspected let’s have a closer look at some of the lifting operations that are used in the construction industry. We will look at what dangers are involved with these operations as well as illustrate what is required to achieve ultimate safety!

Tower Crane

Tower cranes are specialized machinery and are an important component of many construction sites.  A crane risk assessment must be conducted by an appointed competent person. Make sure that the crane is erected and used only as per the safe work procedures of the risk assessment, failing which, the crane could be very dangerous and could even collapse!  

It is the responsibility of the appointed operator to conduct visual inspections of the tower crane’s structure whilst ascending and descending the crane’s access ladder. The operator must record the findings of these inspections in a register and keep it on the crane. Any visible defects must be reported to the site supervisor or manager immediately.

Care must be taken of the crane’s electrical supply by making sure:

  • All the electrical cables are secured.
  • The DB is closed and protected.
  • Signs containing warning notices stating the presence of the DB are posted

This will ensure good electrical safety when working with or around tower cranes. Bare wires or open, live DBs can be very dangerous.  They can electrocute workers or be susceptible to rain and water damage creating a very dangerous environment. 

Crane hooks must be pop marked and if the hook has opened beyond the safe limit, the hook must be replaced. All hooks must be fitted with safety latches and they must be functional. Make sure the MML is displayed and that the limit devices for both the mass and wind overloads are operational at all times.

Make sure the condition of the crane’s access components has been checked. This will include the ladder, backrests and landing platforms. It is highly recommended that all crane access ladders be fitted with appropriate fall arrest systems. This will ensure ultimate safety for the operator.

Make sure the cabin has been well-constructed, not damaged and free from rust. Check the windscreen to make sure it is intact and visibility from the cabin is not obstructed. The hooter and siren must be in working order.

Strobe lights or aviation lights are to be fitted to cranes that might be hazardous to aircraft.

Mobile Crane 

The fundamental advantage of a Mobile Crane is its ease of transportation and its flexibility in handling different types of loads or cargo quickly. This makes a mobile crane very useful and an ideal solution for work on a construction site.

Here are the items one needs to check before using a Mobile Crane:

  • Inspect the rearview mirrors, windscreen, windscreen wipers and indicators to make sure that they are fitted correctly, are in good condition and are operational.
  • Hooters must be checked that they are working.
  • Tire condition and pressure must be checked on a regular basis. All of the wheel nuts must be inspected to ensure that they are correctly fitted.
  • Lights must be operational. It is important that headlights and taillights are in good condition.
  • All grease nipples and all joints must be greased.
  • There are to be no oil leaks. If any, report them to the supervisor immediately.
  • Hydraulic pipes must be in good condition and attachments in working order with no leaks.
  • Do not operate the mobile crane if you see any hydraulic leaks!
  • Battery condition must be inspected. Batteries must be secured, terminals secured and no corrosion present. The boom must be in good condition with no visible damage. If this is not the case, degradation and defects must be reported.
  • Cable and sheaves must be greased and have no visible damage or corrosion. Any defects must be reported.
  • Brakes must be checked to be in good working order.
  • By-pass valves must be fitted correctly, securely mounted, functional and no leaks must be present.
  • A Deflection chart must be fitted, be in good condition and visible to the operator.
  • Outriggers' condition must be inspected, foot plates fitted correctly when used when lifting.
  • Do not use the mobile crane unless a risk assessment has been performed by a competent person on the outriggers and ground conditions on which the outriggers are going to be placed.

Banksman

A Banksman is a skilled person who directs the operation of the crane and is in charge of the crane movements from the point of loading and unloading at ground level.  The Banksman directs the crane operator and controls all operations via hand signals. All signals made by the Banksman or rigger must be noted and adhered to for safety and to ensure that order is maintained on site.

Gantry Crane

Gantry cranes are used to lift and move items around a working area This makes them ideally suited for work in a factory, plant or machine shop. The Gantry Crane must always, be in good working condition, load tested and inspected. The following recommendations should be followed to ensure safety when using Gantry Cranes: 

  • The Gantry Crane’s logbook must be kept up to date and available in the yard where it is used.
  • The operator must be trained and appointed in writing.
  • Make sure the MML is clearly displayed on the crane as well as the crawler beams.
  • The operator must at all times observe and adhere to the hand signals, given by the Rigger or Slinger.
  • The area where there are Gantry Cranes in use must be marked with warning notices. Signage such as "Crane Overhead" must be strategically placed and in good condition to ensure the safety of those working in the area.
  • Make sure the hooks are throat pop marked, with the safety latch fitted and functional. Make sure load limiting switches are fitted and fully operational.
  • Finally, lifting machinery and lifting tackle must only be used as per the requirements of the Occupational Health and Safety Act and Regulations as well as the manufacturer’s operating instructions.

Neil Enslin

Head Occupational Health and Safety

Sources:

Occupational Health and Safety Act and its Regulations

Master Builders SA Construction Manual and audit system

             

In an effort to address South Africa’s skills shortage and high unemployment rate, the Department of Higher Education and the Quality Council for Trades and Occupations (QCTO) are shifting towards a single National Quality Assurance System for accredited occupational qualifications and skills programmes.

As of February 2022, all occupational qualifications and learning programs need to comply with the current Occupational Qualifications Sub-Framework (OQSF) policy. This means that all qualifications and unit standards that were listed under the occupational qualifications band on the National Qualifications Framework (NQF) must now be aligned to new South African Qualifications Authority (SAQA) NQF level descriptors for occupational qualifications by 30 June 2023.

In short, this means that all National Certificate Vocational, N1-6 (NATED National Certificates) and Occupational Certificates will be aligned into one system of Occupational Certificates from levels 1 to 8.

The Department of Basic Education plans to slot into this system too by piloting its new General Education Certificate (GEC) for Grade 9 learners in 2022 with its national rollout happening in 2024. The Department of Education has submitted the refined policy framework to UMALUSI this year for registration on the National Qualifications Framework. This General Education Certificate is intended to formally recognise the completion of general education and then streamline learners into subject choices in either an academic or occupational stream. This Three Stream Model will allow learners to shift focus towards more technical vocational and occupational fields of study at the end of Grade 9. With our current system, hundreds of learners leave the school system each year without a qualification as they are not academically inclined, leaving the unemployment rate for those aged 15-24 at 63.9% (Stats SA).

Occupational Qualifications will be focused on having three components, namely knowledge, practical application, and workplace experience. All components will be compulsory in order to obtain an occupational qualification. The intention is that through this more technical approach, learners will have the chance to gain the practical experience required to begin a job at different points along the occupational qualifications system, and make them more marketable to the industry.

Since 2017 the QCTO has been preparing to take over its mandated functions from SAQA by setting and developing standards and assuring the quality of national occupational qualifications on the NQF. All Sector and Training Authorities (SETAs) currently align to the QCTO and are licensed until 2030 after which the QCTO will take on the full responsibility of accreditation for Occupational Qualifications. Any Skills Development Provider (SDP) offering training in any occupational programmes and qualifications must now be accredited by the QCTO. The SETAs will no longer do quality assurance or accredit providers for occupational qualifications. Going forward, companies wishing to achieve their Skills Development Points on their BEE Scorecard will also need to ensure that their training is coordinated by Skills Development Providers that are accredited by the QCTO.

If effective, this process will provide the youth of South Africa an opportunity to become more employable in technical vocations while addressing the high unemployment rate and skills shortage that the country currently faces.

Heidi Kilian

Head: Training Academy 

Sources:

Reddy et al. 2018. Skills Development Legislation as a Lever of Change to Reduce Poverty, Inequality and Unemployment. Human Sciences Research Council.

https://www.statssa.gov.za/

https://www.education.gov.za/ArchivedDocuments/ArchivedArticles/GEC-update-032022.aspx

https://tradingeconomics.com/south-africa/unemployment-rate

Quality Council for Trades and Occupations. 2022.  Implementation of the OQSF policy 2021 – clarification of transitional arrangement for pre- 2009 qualifications and unit standards, occupational qualifications, and part qualifications. QCTO OQM circular 1 of 2022.

https://skillscollege.co.za/bee-skills-spend/

A job description is defined as a written document containing information pertaining to duties, tasks, responsibilities, years of experience and qualifications required for a job. This information is gathered during the job analysis phase which utilises a systematic process of collecting information about a specific job such as skill requirements, roles, responsibilities, processes and an overview of the physical, emotional and related human qualities required to perform the job successfully. Job descriptions are either used in the initial recruitment phase or in a performance management evaluation process.

Four steps in developing an effective job description:

Step 1: Perform a Job Analysis

This process involves gathering and analysing data specific to the job tasks. Information is gathered by various methods such as interviewing employees, observation and staff surveys. Once the information is analysed, the results should be reviewed by the employee currently in the position and the Line Manager. This review process should be over the following:

  • Knowledge: Information and skills acquired through education and experience.
  • Skills required: Ability to perform a learned activity with expertise.
  • Ability: Competence to perform an observable behaviour.
  • Physical characteristics: The physical requirements required to perform job tasks.
  • Environmental factors: Internal and external working conditions.
  • Qualifications required: The minimum level of education and certification required to perform the job tasks.
  • Relevant experience: The minimum number of years of experience required to perform the job.

Step 2: Determining the essential functions

Once the job analysis step is complete, essential functions for the job must be determined.    Essential functions include examining each task of the job to be performed, the frequency of each duty, the consequences of not performing the duty, and whether the tasks should be redesigned or reassigned to another employee. Once this process is complete, the essential functions of the job will be defined.

Step 3: Organise the Data

Once the essential functions are determined, data should be organised according to a  standardised template utilised by the organisation for all job descriptions. A key job description includes the following:

  • Title of the position: Name of position.
  • Classification/Position Type: Type of contract (permanent or fixed term), full-time or part-time.
  • Department: Name of department the employee belongs to.
  • Reports to: Title of position this job reports to.
  • Subordinates: Title of position/s reporting to this job position.
  • Summary/Objectives: Summary and overall objectives of the job.
  • Essential functions and responsibilities: Details regarding job function, how the individual should perform the job and the frequency of the tasks.
  • Competency: Knowledge, skills, education, qualifications, professional registrations, certifications, expertise and experience required to perform the job.
  • Work environment: Details pertaining to the internal and external work environments such as temperature and noise levels.
  • Physical demands: Any physical demands required to perform tasks such as driving.
  • Hours of work: Work hours required to fulfil duties, number of days per week, may include specific shift work etc.
  • Travel: The type of travel and number of hours spent on the road to travel nationally and internationally that are required for the job.
  • Salary/Benefits: Remuneration offered for this job. Include relevant benefits offered by the organisation.
  • Attributes: Qualities and characteristics required from a person to perform the job and fit in with the culture of the organisation.

Step 4: Signature line and finalise:

This step involves adding a signature line for relevant parties involved to sign the job description which is usually the employee and Line Manager. A draft version of the completed job description should be presented to top management for review and finalisation. The final job description should be saved and stored in a secure location.

Dr Prishana Datadin

Human Resources Manager

Sources

https://explore.darwinbox.com/hr-glossary/job-analysis

https://explore.darwinbox.com/hr-glossary/job-description

https://www.shrm.org/resourcesandtools/tools-and-samples/how-to-guides/pages/developajobdescription.aspx

Amongst disputes that have been referred for dispute resolution, it has been determined that several construction projects are being executed either without a contract or with only a signed quotation. This quotation usually consists of one or two pages without any other supporting documents.

The challenge encountered with this position is that there are no terms or conditions that deal with the most pertinent contractual aspects of a project and therefore affect the dispute.

These aspects include:

  • Variations in terms of changes to the scope of works,
  • Delay claims due to the fault of one of the parties and also include instances where there is no fault by either party,
  • Additional costs for delays where the delay can specifically be attributed to the client/employer,
  • Pricing basis, especially where the quotation makes reference only to one price since this presents disputes and ambiguity with regards to what was included, what was excluded or what the rate for variations was,
  • It clearly identifies the roles and responsibilities of the parties,
  • The reporting structure on the project is stipulated,
  • Well-structured dispute resolution processes are included,
  • Schedule for the works including penalties where applicable.

There are standard form contracts that are widely available to contractors for use on their projects, with the most common standard form contracts used by our members being the JBCC or MBSA agreements.

The benefits of utilizing standard form contracts are:

  • They are formulated by industry experts from various disciplines and cater for the evolving needs of parties to a construction contract through industry scrutiny.
  • Each form of the contract consists of a suite for the parties to select the most suitable contract for a project.
  • The common aspects affecting construction projects are well defined and the methodologies for resolving these issues are elaborated upon.
  • These contracts are regularly updated and by utilizing the latest versions the parties ensure that best practice applicable at the time of entering into the agreement is adhered to.
  • Through continuous practice, they create consistency in managing a construction contract.

Following the spirit of good practice, inter alia, the following is recommended once a contract has been selected:

  • It is imperative to have a proper understanding of the contract.
  • Both parties should physically sign the agreement after the project has been awarded.
  • All annexures and contract data should be properly populated to avoid any ambiguity. For example, we have seen contracts where the contract data is blank and is therefore unable to give effect to the contract.
  • As good practice, initial each page of the contract.
  • Ensure a well-defined project is included in the contract document to remove any unambiguity.
  • Ensure all pricing information is correct and included in the contract, together with the pricing basis thereof and any inclusions/exclusions.
  • A clearly defined scope of work and applicable drawings are included in the contract.

Whereas the quotation leaves a plethora of matters open for interpretation during the dispute resolution process and requires reliance on common law principles, a standard form contract in most instances provides guidelines on addressing unforeseen issues on a construction project. Therefore, contractors are encouraged to familiarise themselves with construction contracts and thereafter utilise them.

Victor Smith

Membership Manager