IMPROVING INFRASTRUCTURE
DELIVERY
THE CIDB APPROACH
Ms Inba Thumbiran
Programme Manager: Procurement and Delivery
Email: inbat@cidb.org.za
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cidb
development through partnership
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.
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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 Construction
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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 standards
including a Code of Conduct
• Establish Registers as a tool to systematically regulate
and monitor the performance of the industry and its
stakeholders
CIDB Regulation Requirements
• 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) Applicable to
public and
in Construction Procurement.
private sector
MANDATORY for public sector
(departments, municipalities and
state owned enterprises)
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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.
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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
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• unauthorised expenditure / irregular expenditure
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.
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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
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CIDB TURN-AROUND STRATEGY
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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!
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CIDB GATEWAY PROCESS
Infrastructure
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.
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CIDB Framework for public sector procurement
CIDB
GATEWAY!!!!
Standard for
Uniformity
Client
Procurement
Policy
Legislative Framework
The Constitution
PFMA / MFMA
PPPFA
BBBEE
CIDB Act + Regulations
Other relevant Act’s
Procurement
directives
CIDB Best
Practice
Guidelines
Standard Operating
Procedures
CIDB
Standard Bid
Packages
CIDB inform
Practice
Notes
CIDB CODE OF CONDUCT!!!
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GATEWAY REVIEW PROCESS
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CIDB Performance based Procurement Framework
Goal (end
objectives)
Level 1
Qualitative
requirements
Level 2
Planning: Procurement system fair,
equitable, transparent, competitive and
cost effective and promote additional
objectives to the procurement itself
Decisions: Procurement Strategy +
Contracting Strategy + Pricing Strategy +
Form of contract = achievement of primary
and secondary objectives CIDB inform
Practice Notes
Quantitative
requirements
Level 3
Evaluation
Level 4
Choices: Rule based system established
in cidb Standard for Uniformity - criteria to
achieve the qualitative requirements, set
parameters / indices for measurement
Application: Control points in the process
that the rules have been applied
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4-level performance-based procurement framework
Integrity
Management
Managing
the risk
that
objectives
are breached
Level 1
Goal (end
objectives)
Level 2
Qualitative
requirements
Level 3
Quantitative
requirements
Level 4
Evaluation
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Few things are harder to put up with,
than the annoyance of a good
example
……..…Mark Twain
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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
•
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CIDB Monitoring and Compliance: Part V
CIDB SFU
CIDB Code of Conduct
• 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
• 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
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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)
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CHANGE MANAGEMENT??
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THANK YOU – THE END
cidb
development through partnership
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