How to grow your Construction Company’s CIDB Grading
Growth is a relative term for any company in any industry and thus when we mention ”growth” in respect to CIDB contractors this is the elevation from an initial construction listing to an elevated listing known as ”grading”.
What is a Grade?
The CIDB is a Built Environment Body that was established by Act of Parliament (Act 38 of 2000) to promote a regulatory and developmental framework.
A CIDB grade is determined by the contractor’s financial capability and your works capability. This enables the Public Sector, Private Sector and the Public in general to access a contractor’s ability to undertake a respective project.
How does a Contractor grow a CIDB Grade?
Obtaining work to enable one to build their financial capability and your works capability are the main objectives in growing the CIDB Grade and below are methods in which a Contractor could utilise in the growth plan:
1. Subcontract Opportunities:
A contractor may approach established contractors with a grading higher than it is registered for and build a subcontract relationship for current and future projects. This will require an understanding of the main contractor’s objectives and at times, the availability of work. This option is beneficial as the main contractor tenders for work and there is no pressure for the subcontractor to tender as they may be a first choice subcontractor.
When approaching Main Contractors, it is always beneficial to provide documents that show your capability to be the subcontractor of choice. These documents are not limited to; Company Profile, Proof of Completed Projects and at times, CIDB and Tax Registrations.
2. Joint Venture Opportunities:
This option is applicable to Contractors that have a strong working relation and are keen to pool resources to apply for a Project with a Grading that upon jointly, can be acknowledged for.
The working relationship of Joint Venture partners will be put under strain as all project procedures will be managed under a single ”JV” entity and as such will require each contractor to be honest in their dealings and offerings to this entity.
Joint Venture opportunities are such that upon successful completion, the contractors involved may re-access their financial capability and your works capability and therefore approach their CIDB offices for Grading Designation Application.
3. Tender for Projects:
This is the most common method as it is pinned on the sole contractor’s ability. Tendering requires an astute understanding of Construction Trends and Pricing Trends for any given time in the Construction cycle.
Construction Trends: The time of industry works allocation, Public Sector involvement and General Public spend (say home renovation times, December due to Bonus pay-outs etc.).
Pricing Trend: The going prices of commodities. A tender price submitted last year may not be the same price this year due to escalation.
On understanding these trends, the Contractor then needs to familiarise themselves with the applicable tender reception sources to obtain work. These may be Tender Bulletins, Tender Noticeboards or Newspaper Classifieds.
How TenderPoint can assist Contractors in any of these classifications grow their CIDB Grade?
TenderPoint has been developed for Contractors by Construction Professionals and thus is the only Construction Procurement Platform with the objective to save Contractors over 80% of their procurement spend and thus enable a Contractor to fully grow with minimal unnecessary costs.
Feel free to contact us should you require any assistance with your tenders.