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Contractor development

As an implementing agent, IDD actively supports government’s objective of transformation and the economic empowerment of businesses of previously disadvantaged individuals. 

The DBSA is committed to ensuring that a percentage of the suppliers appointed through the Bank’s procurement process are B-BBEE suppliers. During 2019, we increased the targeted expenditure to at least 60% of total expenditure towards B-BBEE suppliers.

During the same period we were able to achieve the following:

contractor development
 

The contracts awarded to B-BBEE suppliers resulted in the growth and development of performing contractors. This is evidenced by their improved grading under the terms of the Construction Industry Development Board (CIDB) designations. This upward mobility enables contractors to be eligible to secure contracts and contracts that are larger and higher value.

* For the purpose of the document, the name of the company is withheld and will be referred to as ‘the Contractor’. This case illustrates how, through the DBSA’s B-BBEE awards, a performing contractor has been able to grow and improve from one CIDB grade to another.

The Contractor was established in June 2003 to provide appropriate technology solutions in the building and civil engineering industries. The Contractor is wholly-owned by two previously disadvantaged individuals (PDIs) with 50% female ownership. The directors’ cumulative joint experience in the construction industry amounts to almost four decades.

The Contractor has a level two B-BBEE status and offers the following services: construction, repair and renovation of residential and public buildings; construction of rural roads, including brick paved and concrete paved walkways and driveways infrastructure; and development of a full suite of water and sanitation infrastructure from end to end.
 

DBSA work exposure and key lessons

The Contractor received its first contract to implement projects managed by the DBSA while it was a CIDB Grade 6GB back in 2012 having submitted a motivation for Grade 8GB. This first contract involved the construction of Dakhile Junior Secondary School under the ASIDI funded through the DBE’s Schools Infrastructure Backlog Grant.

A good example of a schools project that the DBSA has successfully implemented and completed with the involvement of the Contractor is the Langeni Senior Primary School (SPS) in the Libode Education District of the Eastern Cape. The school, comprising seven classrooms, a Grade R classroom, media centre, science laboratory, nutrition centre, administration block, ablution facilities and external structures, was handed over for construction at the end of April 2014 and was completed in March 2015.

The Contractor achieved the above in the midst of difficult physical conditions as the project’s sites are located deep in the rural areas of the Eastern Cape with poor road access.

What worked well for the Contractor, was that they familiarized themselves with the project site before construction commenced. This enabled the Contractor to properly plan around the poor site location and solve the challenges at hand.

The Contractor provided a resource plan and used capable technical personnel within its team to do proper scheduling and planning. Scheduling and resource planning are critical capabilities for our contractors and for our contractor, enabling timeous variance analysis.

For the Langeni SPS, the Contractor was able to quickly assemble core staff and mobilise workers. Their strong relationships with reliable buyers and material suppliers also enabled them to secure scarce material while the proper scheduling assisted with accurate cash flow planning and forecasting. The Contractor worked seamlessly with the DBSA Development Facilitators who had set up Project Steering Committees comprising of the local Chief, Chairperson of the School Governing Body and a local Councillor as members who hold the responsibility of monitoring the project and alleviating any obstructions to project completion.
 

Growth in CIDB grading

To date, the DBSA through the Contractor, has constructed schools in the Eastern Cape to the total value of R167.5 million They are currently building schools to the value of R85.4 million, bringing the cumulative value of work they have been granted either as a main contractor, subcontractor or a cessionary contractor to over R252 million.

cidb

The Contractor has progressed to its current designation of CIDB Grade 8GB making it eligible to tender for any construction work up to R130 million in value. 

With their commendable record, the Contractor has also been utilised to facilitate the unlocking of projects that have stalled.
One of these stalled projects is the Sinolwazi Senior Secondary School. The DBSA approached the Contractor to fast track the conclusion of the project after the original contractor was unable to meet its completion timelines. The Contractor provided accurate costing, adequate project resourcing and tight monitoring of the project execution plan. The Contractor completed Sinolwazi SSS within five months of being awarded the project.

“It has been a pleasure working with the DBSA since 2012 and it will hopefully continue to be so in the future. The DBSA has played a vital role in the growth of our company that includes the escalation from 7GB to 8GB this year. We thank you for awarding us the numerous opportunities to prove ourselves, gain vast experience and make a name for ourselves within the construction industry in the Eastern Cape.”
- The Contractor

As an implementing agent, IDD actively supports government’s objective of transformation and the economic empowerment of businesses of previously disadvantaged individuals.