The Joint Building Contracts Committee (JBCC) Standard form contract - Director, Jason Smit

1. CONSTRUCTION & ENGINEERING
SEMINAR
13 OCTOBER, 2015

2. JBCC – OUT WITH THE OLD

3. STANDARD FORM CONTRACTS
“Construction contracts have evolved into standard contract
forms, not only because of their advantages of familiarity and
the prohibitive cost of customisation but also to provide
certainty on the nature of the transaction between parties on a
project specific basis; in effect, to minimise transaction costs”
Source:CLIENT STRATEGIC OBJECTIVES: THE IMPACT OF CHOICE OF CONSTRUCTION CONTRACT ON PROJECT DELIVERY by
PETER RICHARDS, PAUL BOWEN, DAVID ROOT AND AKINTOLA AKINTOYE - Published in Construction Law Journal No. 7 (2005)
at page 2
3

4. JBCC
> The Joint Building Contracts Committee, "JBCC”, was
formalised in 1997 with the registration of a Non Profit
Company.
> The committee concentrates on the compilation of current
contract documentation with an equitable distribution of
contractual risk in the building industry. The suite is
approved by the CIDB (The Construction Industry
Development Board) and is used by national and provincial
state sectors.
> Regular revisions to the JBCC contract documentation suite
ensure that documentation remains current.
From the JBCC website
4

5. JBCC PURPOSE AND USAGE
> The standard forms are compiled in the interests of standardisation and
portray the consensus concerning good practice and an equitable
distribution of contractual risk.
> The primary documentation is supported by a set of standard forms that
simplify the administration.
> The 2014 suite of documents has been submitted to the CIDB for approval
for use by most of the State sectors.
Source: JBCC website
“the JBCC Principal Building Agreement (1998) in South Africa is widely
used for the procurement of a diverse range of construction projects. It
is used by both occasional (inexpert) and expert (repeat build) clients.
Its wide acceptance has readily made the document an industry
standard for construction procurement in South Africa.”
Source:CLIENT STRATEGIC OBJECTIVES: THE IMPACT OF CHOICE OF CONSTRUCTION CONTRACT ON PROJECT DELIVERY by PETER
RICHARDS, PAUL BOWEN, DAVID ROOT AND AKINTOLA AKINTOYE - Published in Construction Law Journal No. 7 (2005) at page 4
5

6. PRINCIPAL BUILDING AGREEMENT (PBA)
> The cornerstone of the JBCC Suite.
> The Agreement is made up of sections starting with the
definitions of all the primary elements and phrases.
> The next sections are ordered as closely as possible to the
project execution sequence.
> The Agreement is designed to be used with or without bills of
quantities and requires the associated Contract Data forms
to be completed.
6

7. APPEARANCES CAN BE DECEIVING
> Whilst they may in a number of respects look the same, the
exercise of comparing the versions is one in which you will
learn that the differences are in fact legion.
> The cards have been shuffled.
> Most of the elements are similar, but they are located
differently.
> Consider the terms independently, and then take advice if
necessary.
7

8. COMPARATIVE STRUCTURE
2000 (Ed 5 – July 2007)
> The Agreement is divided into seven sections
comprising 40 clauses.
> Starting with the definitions of all the primary
elements and phrases. The next sections are
ordered as closely as possible to the project
execution sequence.
> The Agreement is signed between the employer
and the contractor - in conjunction with the
Contract Data in which all contract variables are
recorded.
> The Agreement is designed to be used with or
without bills of quantities and requires the
associated Contract Data forms to be completed.
2014 (Ed 6.1)
> The Agreement is divided into seven sections
comprising 30 clauses – more streamlined.
> Content is structured as a checklist to administer
the execution of the works and to minimise
potential disagreement.
> The Agreement is signed between the employer
and the contractor - in conjunction with the
Contract Data in which all contract variables are
recorded.
> This edition introduces a single ‘contract data’ to
be completed by the principal agent to invite
tenders, and to be completed by the contractor
as the form of tender / offer.
> The Agreement is suitable for all building contracts
and may be used with a Bill of Quantities, or a
Schedule of Rates and drawings.
8

9. 9
OLD NEW
OUT
OUT
REFORMULATED
REFORMATTED
REFORMULATED
NEW

10. APPRECIABLE DIFFERENCES
> The duties of the employer and the contractor are greatly
expanded in the new version and more logically sequenced –
not placed in a variety of provisions throughout the
agreement as they had been making for a clearer
articulation.
> The insurance provisions are more streamlined/consolidated.
> The security provisions are also more logically formulated.
> Redundant concepts removed.
> Completion phases enhanced.
10

11. INDEMNITIES UNDER THE NEW JBCC
More limited and explicit:
Clause 9.2.5 where the employer indemnifies the contractor harmless against claims arising from:
OLD: 9.2.5 the right of the employer to have the works or any part thereof executed at the site;
NEW:9.2.5 proceeding with the works on instructions from the employer without the employer
obtaining the required permission under the law in terms of the agreement.
SEE ALSO 9.2.6 where the employer indemnifies the contractor from claims arising from:
“interference of any servitude or other right not depicted in construction information issued to the contractor
that is the unavoidable result of the execution of the works including the weakening of or interference with the
support of land and property adjacent to or within the site unless resulting from any negligent act or omission
by the contractor or his subcontractors. Should such an event occur, the contractor shall forthwith give notice
to the principal agent.”
AND NEW 9.2.10 where the employer indemnifies the contractor from claims arising from:
"advance payments certified and paid by the contractors to subcontractors" form part of the employer
indemnification.
11

12. WORKS RISK & FORCE MAJEURE
> Works risk insofar as the contractor's liability is concerned has effectively been increased under the
new agreement.
> The old JBCC made provision for the contractor not being liable for damages arising from:
> war, whether declared or not, invasion and hostile acts of foreign enemies;
> rebellion, insurrection, revolution, terrorism, military or usurped power or civil war;
> civil commotion, riot, strike, lockout or disorder by persons other than the contractor's personnel
and other employees or his subcontractors;
> confiscation, nationalisation or requisition by any public or local authority; and
> sonic shock waves caused by aircraft to other aerial devices and ionising radiation or
contamination except where attributable to the contractor's use of such technology.
> The above categories have, however, been incorporated into a new definition for “Force Majeure”
which had not hitherto had a place in the old JBCC agreement.
> Clause 8.5.6 of the Agreement now entails the contractor's obligation to notify the principal agent of
any force majeure events.
12

13. SECURITY
The provisions relating to security now:
1. specify the substitution of guarantees where these expire (time frames are given);
2. clearly articulate the manner of treatment of advance payment guarantees:
"the amount of the JBCC guarantee for Advance Payment may be reduced by the amount repaid
by the contractor as certified by the principal agent in payment certificates. If the advanced
payment is not repaid by the date a certificate of practical completion is issued or practical
completion is deemed achieved, or by the date of termination by the employer due to contractor
default, the entire outstanding amount shall immediately become due and payable."; and
3. Contains a provision at clause 11.10 which specifies the waiver by the contractor of
his lien in the event of a guarantee for payment being provided by the employer,
whereas before, this had to be specified in the Contract Data.
13

14. SETTING OUT
> Where the contractor has been provided with incorrect setting out
information, the contractor is now entitled to revision of the date
for practical completion and/or an adjustment of the contract value
(clause 13.2.3).
> The contractor is required to immediately suspend affected work to
an appropriate extent where undocumented services, natural
features, articles of value or relics are uncovered on site and give
notice to the principal agent who shall issue a contract instruction
on how to proceed with the works. Any relics or other articles
found on the site shall remain the property of the employer.
Neither of these provisions were contained in the old agreement.
14

15. SUBCONTRACTORS
THESE REMAIN BROADLY THE SAME
> Nominated Subcontractors: selected by the Principal Agent, the contractor bears
contractual responsibility for subcontractor work, no parity of contract between the
subcontractor and the Employer unless subcontractor fails due to employer or principal
agent breach.
> Selected Subcontractors: selected by the Contractor in consultation with the Principal
Agent, otherwise in all other respects similar to subcontractor save that if the
subcontractor defaults, the contractor has an election to termination – contractor
retains a control/relationship with the subcontractor.
> Direct Contractors: contracting directly with the Employer – no contractual nexus
between contractor and direct contractor.
REFERENCE TO DOMESTIC SUBCONTRACTORS HAS BEEN REMOVED.
> In our experience, this was seldom if ever used, - it is unclear what the term “domestic
contractor” entailed and why it was even there.
15

16. COMPLETION PHASES IN OLD JBCC
> PRACTICAL COMPLETION
> Inspection; certificate issued or list (rinse wash repeat).
> WORKS COMPLETION
> Seven days later: Inspection; certificate issued or list (rinse wash repeat).
> DEFECTS LIABILITY
> 90 days from works completion certification (or deemed works completion).
> FINAL COMPLETION
> Inspection, certificate issued or list (rinse wash repeat).
> LATENT DEFECTS LIABILITY PERIOD
> Starts on day one of construction period and ends five years after final completion
is deemed or certified.
16

17. 17
Source: JBCC Free Form Printing complete guide available on JBCC website
COMPLETION PHASES IN NEW JBCC

18. NOTABLE CHANGES IN THE WORKS
EXECUTION AND COMPLETION SPACE
> No more works completion stage: there is reference to
“Interim Completion” (18) however this clause has only been
retained as it applies in the JBCC N/S Subcontract Agreement
and applies for clause matching purposes.
> Defects liability and final completion rolled into one.
> Contemplation of instructions to contractor by principle
agent during the defects liability period to minimise
inconvenience at the end of the defect liability period (21.2).
> Inspection is to be undertaken by the contractor not less
than ten days before the end of the defects liability
period and thereafter (instead of at the expiry of the defects
liability period) – thereafter begins the process of assessment,
lists if any, and the issue of the final completion certificate.
18

19. NOTABLE CHANGES IN THE WORKS
EXECUTION AND COMPLETION SPACE
CONT.
The revision of the date for practical completion will not entail an adjustment on contract
value in certain circumstances.
NOTE: in the old contract, these circumstances included default of a nominated
subcontractor, in circumstances where the contractor had taken reasonable steps to avoid
or reduce such delay.
THIS HAS BEEN REMOVED, SO WATCH YOUR NOMINATED SUBCONTRACTORS – THEY
CAN COST YOU MONEY WHERE THEY DEFAULT AND YOU ACT REASONABLY.
In the previous version, if a contractor failed to submit a request for a revised completion
date within 40 days of the cause of the delay ceasing, the contractor is deemed to have
forfeited that claim – in the new version, it must be submitted within 40 days or such
reasonably extended period(s) the principal agent might allow – the principal agent in
other words has a discretion to admit a late claim.
19

20. SECTIONAL COMPLETION SIGNIFICANTLY
SIMPLIFIED
> BEFORE
The works as a whole, the following documents had to
be issued by the principal agent:
1. Interim payment certificates;
2. Recovery statements;
3. Final account;
4. Final payment certificates; and
5. Certificates of final completion.
And, the following documents had to be issued for
each section:
1. A certificate of practical completion;
2. A certificate of works completion; and
3. A certificate of final completion.
> AFTER
Terms applying to the works as a whole apply to each
section.
The principal agent is required to issue:
1. A certificate of practical completion for each
section; and
2. A certificate of final completion for each section
indicating if it is for the last section to reach final
completion.
20

21. THE ACCOUNTING SIDE
BEFORE
> Interim payment certificates issued by the principal
agent monthly – contractor must assist the principal
agent by providing all relevant payment claim
documents and information.
> There is a payment certificate required by the day of
the month stated in the contract, from inception even
if nil or negative.
> Arguable, the value of materials and supplies certified
immediately become the property of the employer and
can’t be removed without written confirmation from
the principal agent –
no mention is made of payment.
> Payment due by the employer within 14 days of
certification.
> Where no certificate is issued or employer does not
pay, contractor had to give three days notice to
suspend work.
> For Adjustments to the contract value, you had 40
working days from knowledge of the expense or loss
giving rise to the claim to raise a claim for
compensation (32.6).
AFTER
> The contractor to assist the principal agent in preparing
cash flow statements and payment valuations and
produce documents which quantify work done -
payment certificates are then issued “regularly” by the
principal agent.
> It seems there is no due date for a first certificate
required until there is value to pay out.
> Values certified for materials and goods will only
become the property of the employer against payment
of the amount so certified.
> Payment due by the employer within seven days of
certification.
> Where no payment or partial payment on a certified
amount, may suspend on five days notice.
> NB - For Adjustments to the contract value, you now
only have 20 working days from knowledge of the
expense or loss giving rise to the claim to raise a claim
for compensation (26.5).
21

22. 22
DISPUTE RESOLUTION
> Contractor can no longer suspend the works where the employer
or principal agent fails to give possession of the site – this makes
sense – this does however give rise to a ground for termination.
> If a matter which went to adjudication subsequently goes to
arbitration, it is now expressly recorded that the arbitration shall
not be construed as a review or appeal from any adjudicator’s
determination and that any such determination of the adjudicator
will remain in force until overturned (which is consistent with
International approach which entails your ability to enforce
pending the outcome of the arbitration) – this would entail (if
you did not wish the determination to take effect) that a party
would have to approach court for an interdict on the
implementation of the determination pending the outcome of the
arbitration.
> Mediation is suggested as an alternative form of dispute
resolution in both versions, but in the new version, the terms
governing the manner and conduct of the referral to mediation,
are not prescriptive.

23. 23
GENERAL CONSIDERATIONS
Surprisingly, business rescue is not a concept which appears to come into the
ambit of consideration of this template which is quite unusual considering that it
can play a major role in business in South Africa these days
THE JBCC is structured such that
> The division of roles and responsibilities between the construction client
and the contractor contemplates a strict separation of process between
design and specification, and the activities related to construction. The
construction client is responsible for the former and the building contractor is
accountable for the latter;
Transactional behaviour is regulated by a provision for penalties for
delayed/non-performance, and a procedure for the resolution of conflict based
on third-party determination.

24. 24
> The contract is thus premised on an arms-length adversarial supply
relationship whereby one party (aided by his professional advisors) seeks to
define the building that is to be delivered) with the other party required to
deliver the building so described (in the drawings, specifications and bills of
quantities).
> The mechanism for reimbursement requires interim payments to be made
to the contractor at regular intervals against actual work progress,
irrespective of whether the criteria for overall project success is being fully
met or not.
> The employer’s principal agent, who enjoys wide powers of administration
under the Agreement, bears no responsibility for process or project
outcome under its terms.
> Taken together, one may question whether the wide market acceptance that
the Agreement enjoys is at all justified given the clear limit of its
applicability.
Source:CLIENT STRATEGIC OBJECTIVES: THE IMPACT OF CHOICE OF CONSTRUCTION CONTRACT ON PROJECT DELIVERY by
PETER RICHARDS, PAUL BOWEN, DAVID ROOT AND AKINTOLA AKINTOYE - Published in Construction Law Journal No. 7 (2005) at page
4-5
GENERAL CONSIDERATIONS

25. THE CONSTRUCTION INDUSTRY
DEVELOPMENT BOARD ACT

26. CONSTRUCTION INDUSTRY
DEVELOPMENT BOARD ACT NO 38 OF
2000
> Date of commencement – 1 December 2000
26

27. ESTABLISHES THE CONSTRUCTION
INDUSTRY DEVELOPMENT BOARD
> Objects of the Board include:
> to determine and establish best practices;
> to promote best practice through certain programmes;
> to promote uniform application of policy wrt construction in all
spheres of government;
> to promote and establish uniform standards and ethical
standards re construction contracts; and
> to promote standardisation of the procurement process.
27

28. PROMOTES BEST PRACTICE
> In order to promote best practice, the Board must:
> publish best practice standards and guidelines in Government
Gazette; and
> establish/maintain register of projects and best practice
assessment scheme.
28

29. REGISTER OF CONTRACTORS
> The Board must keep and maintain a register of
CONTRACTORS registered with the Board (section 17(1)).
29

30. CRIMINAL OFFENCE
> Contractor may not do construction works for public sector
contracts awarded in terms of competitive tender unless he
is registered with the Board (section 18(1)).
> Contravention of the aforementioned is a criminal offence
and is subject to a fine of up to 10% of the value of the
contract (section 18(2)).
30

31. BEST PRACTICE CONTRACTOR
RECOGNITION SCHEME
> The Board must establish a best practice contractor
recognition scheme which:
> enables organs of state to manage risk; and
> promotes contractor development wrt best practice standards
and guidelines.
31

32. REGISTER OF PROJECTS
> The Board must keep a register of projects specifying nature,
value and distribution of projects.
> All construction contracts above a certain tender value must
be recorded in this register (section 22).
32

33. BEST PRACTICE PROJECT
ASSESSMENT SCHEME
> The Board must identify best practices and establish a best
practice project assessment scheme.
> Every client engaging in a best practice assessment scheme
must pay a prescribed percentage of the contract sum to the
Board when awarding contracts (section 23).
33

34. ENFORCEMENT OF CODE OF CONDUCT
(SECTION 29)
> The Board may convene an inquiry into a breach of the code
of conduct.
> Persons may be subpoenaed to appear at inquiry/produce
documentation.
> Board may seize and copy documents.
34

35. WHAT IS THE CIDB
> CIDB is a statutory body appointed in terms of the
Construction Industry Development Board Act 38 of 2000
(“the CIDB Act”).
35

36. REGISTER OF CONTRACTORS
> Process and forms – See CIDB website.
> Legislative requirements – See section 16 and 18 of the
CIDB Act.
> Section 16 – National public sector register which categorize
contractors to facilitate public sector procurement.
> Section 18 - A contractor may not undertake, carry out or
complete any construction works or portion thereof for
public sector contracts, awarded in terms of competitive
tender or quotation, unless he or she is registered with the
Board and holds a valid registration certificate issued by the
Board.
36

37. PROCEDURE FOR REGISTRATION OF
GRADING DESIGNATION 1
> CIPC documents.
> Original Tax Clearance Certificate.
> No need for proof of financial capability or record of projects.
> Only authorised to tender for contract R 200 000 or less.
> NOTE – Criticised for allowing “inappropriate entrants” into
the market. No checks and balances.
37

38. PROCEDURE FOR REGISTRATION
GRADING DESIGNATION 2 TO 9
> Documents - CIPC documents; ID copies; work permits; Proof of Payment; Original Tax
Clearance Certificate; Previous Contracts (5 years); Financial statements- Grade 5 and
higher; VAT Returns for the past two years for entities who do not have audited
financial statements AND are applying for contractor designation 3 or 4; Sponsorships.
> Appropriately qualified person be appointed to evaluate every application - known as
Assessor.
> 21 working days to decide on category and to register contractor.
> Assessor may register applicant for lower grading than applied for – contractor may
request reasons and seek review.
> Note – Board must determine whether contractor can be classified as “potentially
emerging enterprise”.
38

39. EXEMPTIONS
> NHBRC Contractors – if only construction of homes.
> Labour and Supplies only Contractors.
> Private Sector Contractors – if do work only for the private
sector.
> Joint Ventures - If all JV partners are registered, JV need not
register.
39

40. CLASSES OF CONSTRUCTION
WORKS (SCHEDULE 3)
> CE - Civil Engineering
> EP - Electrical Engineering (infrastructure)
> EB - Electrical Engineering (building)
> GB - General Building
> ME - Mechanical Engineering
> SW - Specialist Works – Note subset of designations
40

41. GRADING DESIGNATIONS
> The grading indicate the size of contracts a contractor is
capable of undertaking within specified categories of
construction works, including contractor’s financial
capability.
> Financial Capability -
> minimum average bi-annual turnover;
> largest construction works contract by value – over five
year period;
> Available capital – Net Asset Value plus sponsorships.
41

42. > Works Capability:
> Number of qualified full time personnel;
> Track record in Works capability over five years.
> Contractor may be registered for more than one class of
works, but only one grading in respect of particular class.
> CIDB board may verify information and may call for more
information.
> All supporting documents to be in English.
> Contractor may apply to amend grading status.
42
GRADING DESIGNATIONS CONT.

43. Contractor Grading
Designation Maximum Contract
Value
1 R 200 000
2 R 500 000
3 R 1,500 000
4 R 3,000 000
5 R 5,000 000
6 R 10,000 000
7 R 30,000 000
8 R 100,000 000
9 Unlimited
GRADING CATEGORIES
43

44. FOREIGN ENTERPRISES
> Monetary values are based on the exchange rate in ZAR in
respect of latest financial statements AND value of
construction works completed on the date of completion.
> VAT or similar taxation to be included.
44

45. POTENTIALLY EMERGING
CONTRACTORS
> The Act and regulations provides for contractors to be
registered as “potentially emerging enterprise” - an
enterprise which is owned, managed and controlled by
previously disadvantaged persons.
45

46. EMPLOYER DUTIES
> Provide status report to board of registered projects e.g.
practical completion.
> Notify board of any litigation or arbitration within one
calendar month.
46

47. SUSPENSION
> Non-payment of arrears in excess of 90 days.
> Failure to submit original tax clearance certificate.
> Contractor may be removed from register.
47

48. PRELIMINARY INVESTIGATION OF
COMPLAINT OR SUSPICION
(CODE OF CONDUCT)
> Code of Conduct applies to all construction related procurement,
namely public and private.
> Any complaint from person aggrieved by action or omission in
terms of code of conduct must be investigated.
> Board must investigate if reasonable grounds to suspect that
person has acted contrary to or omitted to act in terms of code
of conduct.
> Board may hold formal inquiry. Acquittal or conviction on
criminal charge not bar to proceedings under Regulations.
> Note: We recommend consultation with legal representatives.
Details of code of conduct not covered by this presentation.
48

49. OFFENCES
> Supplies false information to CIDB board to mislead board.
> Fails to comply with these Regulations or register a project.
> Award a construction works contract contrary to these
regulations.
> Liability – Fine not exceeding R100,000.
49

50. EMPLOYER OR PRINCIPAL LIABLE
> Employer or Principal will be liable if proven employee or
agent’s actions was breach of code of conduct or regulations,
unless employer or principal can prove on balance of
probabilities that they had no reason to believe that
employee or agent failed to discharge their duties. Belief
must be reasonable – Test objective.
50

51. POTENTIALLY EMERGING
CONTRACTORS
> Benefit - May be awarded contracts in higher designation
than that registered in, provided that the employer -
> is satisfied that the enterprise has the potential to develop and
qualify to be registered in that higher grade;
> ensures that financial management or other support is provided
to that contractor to enable the contractor to successfully
execute that contract.
51

52. PROPOSED AMENDMENTS TO
REGULATIONS
> Proposed amendments have been published for public
comment.
> Amendments would influence contractual freedom.
> Considered to be very beneficial to construction industry.
52

53. PROMPT PAYMENT
> Applies to written and oral contracts in private and public sectors.
> Prohibition - prohibits policy of “paid when paid” - Contract may not
provide that payment to contractor, service provider or supplier is
conditional on payment from a third party.
> Exclusions – If Payer is under business rescue or insolvent.
> Any person who carried out construction works, supplied goods or
services under construction contract is entitled to progress payments.
> If contract silent on regular payment intervals, contractor or supplier
may submit monthly invoices in relation to completed works or services
or goods delivered. Invoices becomes due and payable within 30 days
and attract interest at Reserve Bank repurchase rate, plus 6%.
53

54. NOTICE OF INTENTION TO WITHHOLD
PAYMENT
> A contracting party may not withhold payment unless –
> notice of intention to withhold payment given;
> there is a reasonable ground, in terms of the contract, on which
the withholding is justified.
> Notice must –
> specify amount proposed to withhold;
> specify each ground of withholding;
> be given within five days from date of receipt of invoice.
54

55. NOTICE TO SUSPEND PERFORMANCE
> Contractor may suspend performance when due payment is
not paid.
> Right to suspend may only be exercised after notice of
intention to suspend given – 7 days notice period.
> Right to suspend cease when payment made.
55

56. PROHIBITION AND VALIDITY OF
CONTRACT
> Any provision in a contract that seeks to exclude or waive
the regulations will be null and void.
> However, failure to comply with Part IV B (prompt payment)
does not render contract invalid.
56

57. ADJUDICATION
> Every contract must provide for adjudication procedure substantially
compliant with these regulations. If not or oral agreement then provisions of
Part IV C automatically applies.
> Any dispute between the parties must be referred to adjudication.
> Every contract must –
> Enable party to give notice at any time of intention to refer dispute for adjudication.
> Provide for time table to ensure adjudicator appointed within 7 days.
> Require adjudicator to reach decision within 28 days from date of referral. May not
extend beyond 42 days even if agreed.
> Enable adjudicator to play inquisitorial role on the facts and the law.
57

58. > Party not satisfied with adjudication may refer the dispute to
arbitration in terms of Arbitration Act or take decision on
review in terms of PAJA.
> Party must comply with adjudicator decision despite an
intention to arbitrate or review the decision.
> Restitution permitted if adjudicator decision overturned.
58
ADJUDICATION CONT.

59. APPOINTMENT OF THE ADJUDICATOR
> Board to accredit an adjudicator nominating body/bodies
AND appointment to be made in terms of the Standard for
Adjudication.
> Adjudicator is exempted from liability, unless the act or
omission is in bad faith.
> Objection to appointment does not render it invalid or any
decisions.
59

60. POWERS AND DUTIES OF ADJUDICATOR
> Must act impartially, avoid unnecessary costs and adhere to
rules of natural justice.
> Must decide on procedure.
> May – request disclosure of documents; decide the language
to be used in proceedings; meet and question parties and
their representatives; site visits; appoint experts and issue
any directions relating to conduct.
> Parties must comply with any request or direction.
> May if party fails to comply with request or direction -
continue with adjudication, draw inferences, apply discretion
based on information OR impose financial penalty.
60

61. ADVISOR’S AND CONFIDENTIALITY
> Any party may be assisted by or represented by advisors
(legal or otherwise).
> Where oral evidence or representations are considered by
adjudicator a party may only have one representative, unless
permitted otherwise by adjudicator.
> No document or information may be disclosed if indicated to
be confidential.
61

62. DECISION MAKING TIME PERIOD
> Decision to be made within 28 days after referral notice OR
such further period – not exceeding 42 days.
> The 42 day limit may only be extended if the parties agree
AND where the adjudicator undertakes multiple adjudications
under the same contract.
> Failure by adjudicator to make decision within time periods
provided, any of the parties may issue new referral notice.
> Immediate compliance with adjudicator decision.
62

63. MANNER IN WHICH ADJUDICATOR
MUST MAKE DECISION
> Consider all relevant information and provide reasons if
requested by any of the parties.
> Review any decision taken by contracting party, or certificate
(unless contract states certificate is final).
> Decide who must pay what and what interest
(see above Reserve Bank provision).
> Correct decision to remove clerical error – to be made within
five days of main decision.
63

64. EFFECT OF ADJUDICATOR'S DECISION
> Constitutes a liquid document or where adjudicator made
order for payment of money it is a liquidated amount of
money for purposes of summary judgement.
> Where decision involves amount under Magistrate’s Court
monetary jurisdiction (currently R 300k) and not paid within
30 days, the decision is a certificate under section 57 (2) (c)
of Magistrate’s Court Act and clerk of court must enter
decision as a judgement.
> Warrant of execution may then be applied for.
> NOTE – Regulations do not apply to any contract entered into
before commencement date of regulations.
64

65. CODE OF CONDUCT,
BEST PRACTICES AND
STANDARDS

66. CODE OF CONDUCT FOR ALL PARTIES
(31 OCTOBER 2003)
> Applies to the various parties involved in public and private procurement re
a fixed asset, including the agent, contractor, employer, employee,
representative, sub-contractor and tenderer. It inter alia entails the
following:
> behave equitably, honestly and transparently;
> discharge duties/obligations timeously and with integrity;
> comply with all applicable legislation/regulations;
> satisfy all relevant requirements in procurement documents;
> avoid conflicts of interest; and
> not maliciously or recklessly injure or attempt to injure the reputation of another.
66

67. BEST PRACTICE LABOUR-BASED METHOD AND
TECHNOLOGIES FOR EMPLOYMENT INTENSIVE
CONSTRUCTION WORKS (11 MARCH 2005)
> Methods for implementing labour-based methods in
construction works/projects.
> Labour-based construction methods.
> Labour-based methods for materials manufacture.
> Labour-based construction technologies.
> See Best Practice Guideline 4-1 to 4-9 (see CIDB documents
1022 to 1034)
67

68. CONSTRUCTION PROCUREMENT BEST
PRACTICE 2006
> See CIDB Library
68

69. STANDARD FOR UNIFORMITY IN
CONSTRUCTION PROCUREMENT
> FIDIC Red Book
> FIDIC Yellow Book
> FIDIC Silver Book
> Contract for Supply and Delivery
of Goods (CIDB)
> GCC for Construction Works
(SAICE)
> JBCC Series Principal Building
Agreement
> JBCC Series Minor Works
Agreement
> NEC3 Engineering and
Construction Short Contract
> NEC3 Engineering and
Construction Contract
> NEC3 Professional Services
Contract
> NEC3 Term Services Contract
> FIDIC Green Book
> Standard Professional Services
Contract (CIDB)
> Supply of Goods (Short Contract)
(CIDB)
> General Conditions of Service
(CIDB)
69
This standard references the following:

70. BEST PRACTICE: GREEN BUILDING
CERTIFICATION (1 APRIL 2011)
> Identifies the “Green Star South Africa Office Version 1” as a
best practice to be followed in the design of office buildings.
> Available on http://www.gbcsa.org.za.
70

71. ESTABLISHMENT OF REGISTER OF
PROJECTS (21 APRIL 2011)
> The Board instructs National and Provincial Departments,
Municipalities and Public Entities delivering infrastructure, to
register all construction contracts awarded through a tender
process during the 2009/2010 and 2010/2011 financial
years.
> The Board may conduct random compliance audits.
> Failure to comply with the above may result in naming and
shaming.
71

72. STANDARD FOR INDIRECT TARGETING
FOR ENTERPRISE DEVELOPMENT (29
JANUARY 2013)
> The contractor must engage “targeted enterprises” in
performance of contract: at least 5% of contract participation
goal (CPG) is to be achieved.
> Each targeted enterprise must complete a targeted
enterprise declaration affidavit.
> Progress reports detailing interim values of the contract
participation goal (CPG) must be tabled.
> Sanctions for non-compliance to be set out in the contract.
72

73. TARGETED ENTERPRISES
> These include:
> a CIDB registered contractor;
> an entity in which the contractor does NOT have an equity
holding exceeding 20%;
> an entity which:
> employs at least three permanent employees;
> is 50% more black owned; or
> is 30% or more black women owned.
73

74. STANDARD FOR CONTRACTOR PERFORMANCE
REPORTS FOR USE ON CONSTRUCTION
WORKS CONTRACTS (GRADES 2 TO 9)
(23 AUGUST 2013)
> This best practice standard provides for a uniform and
consistent method of assessment of the performance of a
contractor wrt certain project parameters.
74

75. BEST PRACTICE CONTRACTOR RECOGNITION
SCHEME: BEST PRACTICE: CONSTRUCTION
MANAGEMENT SYSTEMS (14 AUGUST 2015)
> The Board has identified the following as best practices for
contractor enterprises in grades 5 to 9:
> certifications to:
> SANS ISO 9001 Quality Management System;
> SANS ISO 14001 Environment Management Systems; and
> SANS OHSAS 18001 Occupational Health and Safety Management
System;
> certification to SANS 1393 Construction Management System.
75

76. STANDARD FOR DEVELOPING SKILLS
THROUGH INFRASTRUCTURE
CONTRACTS (23 AUGUST 2013)
> This best practice standard for developing skills through
infrastructure contracts standard establishes a minimum
contract skills development goal which is to be achieved in
the performance of a contract wrt the provision of different
types of workplace opportunities linked to work associated
with a contract which culminates in or leads to:
> a part or full occupational qualification registered on the NQF;
> a trade qualification leading to a listed trade;
> a national diploma registered on the NQF;
> registration in a professional category by one of the professional
bodies listed in the standard.
76

77. BEST PRACTICE RECOGNITION
SCHEME: IMPLEMENTATION (25 JUNE
2015)
> The Board identifies best practices for:
> competence standard for contractors;
> construction management systems;
> specification for a fraud and corruption management system;
and
> standard for contractor performance reports.
77

78. BEST PRACTICE SPECIFICATION FOR A
FRAUD AND CORRUPTION AND
MANAGEMENT SYSTEM (7 AUGUST 2015)
> The Board identifies certification to BS10500 Specification for
an Anti-Bribery Management System (ABMS) as a best
practice for Grade 9 enterprises.
COMPETENCE STANDARD FOR CONTRACTORS
(7 AUGUST 2015)
> This standard establishes the competencies of a
contractor, which need to reside with the owner and/or
key nominated representatives of the contractor.
78

79. STANDARD FOR CONTRACTOR PERFORMANCE
REPORTS FOR USE ON CONSTRUCTION
WORKS CONTRACTS (GRADE 1)
(7 AUGUST 2015)
> This best practice standard for contractor performance
reports for use on constructions works (Grade 1) provides for
a uniform and consistent method of assessment of the
performance of a contractor.
79

80. THANK
YOUJason Smit
T: 011 535 8359
E: jasonsmit@werksmans.com
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