1development through partnership

cidb

IMPROVING INFRASTRUCTURE DELIVERY

THE CIDB APPROACH

Ms Inba Thumbiran

Programme Manager: Procurement and Delivery

Email: inbat@cidb.org.za

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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.

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 3

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 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

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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.

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

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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

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

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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 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.

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Standard for Uniformity

Legislative FrameworkThe Constitution PFMA / MFMA PPPFA BBBEE CIDB Act + RegulationsOther 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

CIDB Standard Bid Packages

CIDB GATEWAY!!!!

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GATEWAY REVIEW PROCESS

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

Quantitativerequirements

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

Quantitativerequirements

Evaluation

Level 1

Level 2

Level 3

Level 4

4-level performance-based procurement framework

Integrity Management

Managing the risk

that objectives

are breached

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2010

Bu

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et S

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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• 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

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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

development through partnershipcidb