In terms of the CIDB Act (Act 38 of 2000), a Board must establish a Best Practice Project Assessment Scheme which shall be based on the best practices identified by the Board. One of the best practices established is the CIDB Best Practice Project Assessment Scheme: Standard for Contract Participation Goals for Targeting Enterprises and Labour through Construction Works as gazetted on 10 November 2017 under Gazette No. 41237 (“CIDB Standard”).

In its simplest terms, CPG refers to an amount in relation to the sum value of the works, which should be excluding provisional cost amounts, contingencies and vat, wherein the Contractor engages a specific target enterprise or targeted labour in the performance of the contract to develop the target enterprises or target labour performance in the identified development areas.

The requirements for CPG only applies to:

• Construction works contracts in the General Building (GB) and to Civil Engineering (CE) classes of works;
• Construction works contracts with an estimated minimum project duration of 6 months; and
• Construction works contracts in which at least 25% of the main contract could reasonably be expected to be sub-contracted out in one or more of the following CIDB classes of construction works:
  • Civil Engineering (CE)
  • Electrical Engineering Work (EB);
  • General Building Works (GB); or
  • Mechanical Engineering (ME).

In fulfilling the CPG requirements, each targeted enterprise is required to complete a declaration affidavit in the prescribed form. If the principal contractor falls within the definition of the targeted enterprise and provided that the principal contractor is from the targeted area, the work undertaken by the principal contractor will then contribute towards the CPG (Standard for Contract Participation Goals, CIDB)

CPG for enterprise development in the GB and CE classes of works are limited to contracts of tender Grade 7 to 9. CPG goals for other enterprise development in classes of works other than GB and CE are also limited to contracts of tender Grade 7 to 9. These contract tender Grade thresholds also apply to Targeted Labour in respect of skilled and semi-skilled labour, i.e. tender Grades 7 to 9. In respect of CPG goals for unskilled labour, these shall be limited to on-the-job training to enable such labour to master the basic work techniques required to undertake the work in accordance with the requirements of the contract without compromising worker health and safety.

Prior to the appointment of the Community Liaison Officer (CLO) -  who is appointed by the Contractor per the terms and requirements of the contract, the employer is required to engage with the targeted communities and facilitate the establishment of a Community Project Committee (CPC) representing the affected communities. The CPC should include the relevant community leaders and affected Ward Councillor(s). The employer in engagement with the CPC shall seek to obtain agreement with the community on the targeting strategy and CPG to be used in the construction works. The CLO is also recommended by the CPC.

An important note per the CIDB Best Practice Project Assessment Scheme: Standard for Contract Participation Goals for Targeting Enterprises and Labour through Construction Works as gazetted on 10 November 2017 under Gazette No. 41237 (“CIDB Standard”), where progress on the contract programme is delayed due to community participation matters, the principal contractor shall have the right to claim for time and cost delays in terms of the relevant Conditions of Contract.

The contractor is required to achieve the CPG goals and regularly report on this aspect. The contract shall contain sanctions for non-compliance with the CPG goals which are usually in the form of penalties. The CIDB Standard also contains guidelines on circumstances of denial of credits towards the CPG requirements.

In order for a project to be successful and not compounded by issues and disputes relating to CPG matters, proper consultation and engagement is recommended with the CPC and community and an agreed set of goals identified. This engagement should be on a regular basis.

Social facilitators also play an important role in achieving the CPG requirements of a contract. They play inter alia the following roles:

• Manage conflict resolution between the parties;
• Identify the key stakeholders and their roles;
• Manage and monitor risk;
• Creation of an environment facilitating the implementation of the CPG requirements;
• Ensure that the relevant legislation is complied with;
• Prepare the necessary documents on handover of the project.

In order for the social facilitator to properly fulfil his / her mandate, it is important to keep them updated of progress on site, issues faced on site and regular communications. The social facilitator should make regular site visits and understand the dynamics of the environment in which the execution of the project is being executed.

The key with regards to CPG, in our assessment, is proper preparation, good communication and alignment amongst the stakeholders with reference to the applicable standards, legislation and the contract. A further consideration that could be borne in mind, which could be applied to all aspects and not limited to CPG aspects, are the 5P’s:

• Proper
• Preparation
• Prevents
• Poor
• Performance

Should you have any queries or require further assistance regarding the above, you may contact Mr. Bilaal Dawood on bilaal@bdattorneys.co.za

Sources

1. CIDB Best Practice Project Assessment Scheme: Standard for Contract Participation Goals for Targeting Enterprises and Labour through Construction Works 

http://www.cidb.org.za/wp-content/uploads/2021/04/Standard-for-Contract-Participation-Goals.pdf

Bilaal Dawood | Bilaal Dawood Attorneys