Discussion paper (November 2006) Framework for the CIDB Registers for Professional Services

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1 Discussion paper (November 2006) Framework for the CIDB Registers for Professional Services 1 Purpose The purpose of this document is to outline the framework for the establishment, within the construction industry, of a national register of professional service providers as provided for in the CIDB Act (Act 38 of 2000): 2 Principle objectives a) The register will categorise professional service providers in a manner that facilitates public sector procurement and promotes development. b) The register must categorise service providers in terms of their capability in order to: - support risk management in the tendering process; - reduce the administrative burden associated with procurement processes; and - reduce tendering costs to both clients and professional service providers; store and provide data on the size, nature and distribution of professional service providers operating in the construction industry; indicate the volume, nature and performance of service providers and the development of target groups; and enable access by the private sector and thus facilitate private sector procurement. c) The register must: provide effective access by small enterprises and target groups and carry the empowerment ratings of service providers; and enable an assessment of capacity against demand and empowerment against targets The starting point for any strategy to develop professional service providers within the construction industry is to be able to identify the nature, size, distribution and basic capabilities of the individual enterprises providing professional services i.e. the supply. This creates the opportunity in the future to link the supply to the demand and to introduce best practice recognition and assessment schemes. 3 Background The Construction Industry Development Board Act of 2000 (Act 38 of 2000) provides for the establishment of a Board to implement an integrated strategy for the reconstruction, growth and development of the construction industry. The Act creates a register of contractors linked to a best practice contractor recognition scheme and a register of 1

2 projects linked to a best practice assessment scheme. Both these registers are central to the implementation of the integrated strategy. The CIDB has already established a register of contractors and a register of projects in terms of this Act. Section 5(2)(g) of the Act authorises the Board to establish and maintain a register of professional service providers in the construction industry. The Act requires that the public sector apply such a register in the procurement of professional services in accordance with regulations prescribed by the Minister of Public Works in line with government policy. 4 Preliminary proposals 4.1 Guiding Principles The following guiding principles should underpin the development of a register of professional service providers (PSP): 1) The qualification criteria for admission of a PSP to the register should be developed around those required for relatively straightforward assignments. Qualifications or best practice attributes that relate to assignments that are more complex or specialized should be dealt with in the best practice service provider assessment scheme (subsequent development phase of the register) or through client procurement practices on a contract-by-contract basis. 2) The register should only deal with basic competencies of PSPs and a limited range of specializations. It should reflect a PSPs capability to provide specific services in terms of certain programmes, e.g. the Expanded Public Works Programme (EPWP). 3) The register should indicate the geographic areas in which a PSP operates as well as all its branches. 4) A PSP s capability should be determined by the number and caliber of individuals employed 1. The register should therefore: a) base capability on the professional registration and work experience of permanent employees; and b) provide an indication of capacity by recording the number of such employees 2 and / or SMME status. 1 Working capital is not considered a key determinant of a PSPs capability to provide a service. 2 PSPs may enter into consortiums with other PSPs or subconsult work in order to increase capacity. As a result, the register should not grade PSPs in terms of number of staff but should give an indication of such number. 2

3 5) Only those persons who are able to work without direction or supervision should be considered as being a qualified person 3. 6) Registration with a South African statutory council in an appropriate category of registration contained in Tables 1 and 2 should form the point of departure for any definition of a qualified person 4. References from public sector clients confirming satisfactory past performance in a category should be used to establish that the qualified person has adequate work experience in a category unless a statutory or professional body indicates that such person has sufficient contextual knowledge to provide services within such a category 5. Table 1: Categories of registration provided for in the Built Environment Councils Scope of work Act Categories of professional registration Architectural works Architectural Profession Act, 2000 Architect Architectural Technologist Architectural Technologist Architectural Draughtsperson Construction management Construction project management Project and Construction Management Professions Act, 2000 Construction Manager Construction Project Manager Engineering Engineering Profession Act, 2000 Engineer: Engineering Technologist; Certificated Engineer; or Engineering Technician; Landscape Architecture Landscape Architectural Profession Act, 2000 Landscape Architect; Landscape Technologist; Landscape Technician; or Landscape Assistant; Valuation of immovable property Property Valuers Profession Valuer Associated Valuer Quantity surveying Quantity Surveying Profession Act, 2000 Quantity Surveyor 3 A professionally registered person may not necessarily have sufficient experience to be able to provide consulting services immediately after being registered. For example, a person needs to have 7 years of practical experience after graduation before being eligible to be registered on the Engineer s Mobility Forum s International Register of Professional Engineers. 4 Section 20 of the Council for the Built Environment Act, 2000, requires the CBE to identify the scope of work for every category of registered persons after receipt of the recommendations of the councils for the various professions, prepared in terms of their respective Acts. Thereafter, a person who is not registered by such councils may not perform any work identified for any category of registered person. This process is underway. As a result, professional registration is essential. 5 A person who is qualified by virtue of his experience, training and in depth contextual knowledge is competent to perform a service within the built environment. The current registration system measures competency against prescribed standards at the entry point to a profession and relies on the code of conduct to confine professionals to work in practice areas that are within their competence. ECSA currently does not provide sufficient distinction between the different branches of engineering or between fields within a branch e.g. it has no means to distinguish between geotechnical engineers and civil engineers. Likewise, SACAP does not precisely differentiate the practice areas of those registered in terms of its Act. This approach does not assist in the management of risk and the identification of expertise. 3

4 Table 2 Categories of registration provided for in other statutory councils which relate to the construction sector Scope of work Act Categories of registration Planning and integration Planning Professions Act, 2002 Technical planner Professional planner. Miscellaneous, eg engineering National Scientific Professions geologists, material scientists etc Act, 2003 Surveying Professional and Technical Surveyors' Act, 1984 Professional natural scientist; Professional Land surveyor Professional surveyor Technical surveyor 7) A PSP and any branch office of a PSP should only be admitted to a category on the register should they have at least one full time qualified persons in their employ who is permanently stationed at such an office 6. 8) PSPs may be registered in more than one category of registration should they have the necessary qualified staff in that category. 9) PSPs should only be admitted to the register if the PSP: a) maintains a minimum level of professional indemnity insurance cover; b) is in possession of a valid tax clearance certificate; c) is not listed on the Register of Tender Defaulters in terms of the Prevention and Combating of Corrupt Activities Act of 2004 as a person prohibited from doing business with the public sector; and d) can demonstrate its financially viability 7. 10) Start-up practices (i.e. practices which have been in operation for less than 1 year or those that fail to satisfy the financial sustainability criteria) should be admitted to the register. The register should, however, indicate that a PSP has such status. 11) The register should record each PSP s verified BBBEE level contribution ratings for preferential and development purposes. 12) The register should reflect qualifications of all principals i.e. sole proprietors, partners, members or directors, as relevant. The register of professional service providers should be applied to procurement in much the same way as the register of contractors. Only those PSPs who are registered in a category will be eligible to submit tender offers. 6 This requirement ensures that PSP only take on work for which they have in-house competence. Should they decide to outsource any work for capacity reasons, they have a professional who can take responsibility for the work and brief and direct subconsultants. 7 Evidence of sustained economic activity in the form should be in the form of: i) a financial statement for the financial year immediately preceding the application certified by an auditor in the case of a company, an accounting officer in the case of a close corporation, and an accountant in the case of a sole proprietor or partnership; and ii) average annual income per professionally registered staff member of not less than a specified amount. 4

5 4.2 Categorisation General The register of professional service providers should provide information with respect to each PSP on: the fields of expertise to perform assignments of a routine nature the track record with respect to a limited range of subfields of expertise the degree of control exercised by registered professionals minimum levels of professional indemnity insurance SMME status ownership BEE status Fields of expertise relating to routine assignments The nature and scope of the different types of professional service appointments may be described as follows: Category Nature of scope of work Typical means for service provider to demonstrate capability to perform the contract Routine projects Specialist projects Complex projects Projects where the tasks are of a straightforward nature involving, in the main, standard technologies in terms of which inputs are relatively well known and outputs can be readily defined. Projects in which the bulk of the service involves technically complex work which calls for considerable innovation, creativity, expertise and/or skills. Specialist projects which are characterized by ill-defined inputs and outputs. Basic level of professional and technical qualifications and experience. Considerable skill and expertise to carry out the work with demonstrated experience in comparable projects. In depth contextual knowledge of subject matter, as well as working knowledge of interrelated disciplines, in addition to considerable skill and expertise to carry out the work with demonstrated experience in comparable projects. The fields of expertise catered for in the register of PSPs should relate only to routine assignments as requirements for specialist and complex projects can only be established on a case by case basis. Consequently, only the following basic fields of expertise should be reflected on the register: Service categories Architecture Civil engineering Electrical engineering Electronic engineering Mechanical engineering Structural engineering Landscape architecture Planning, design of construction works and contract administration Geotechnical engineering Evaluating the geotechnical character of a Overview of services Assessing the impact of the works on the environment Conceptualization of works Design of work Interfacing with other disciplines Production of documents which can be utilized for the tendering and construction of the project Contract administration Cost and quality control of the construction process. Desk top and field investigations Advice on geotechnical aspects or works and land use 5

6 site in the context of existing or proposed works or land usage Quantity surveying Advise on cost and contractual arrangements and preparation of contract documents. Control costs of construction projects. Construction management Manage the construction process of works executed under multiple direct contracts, from inception to completion, but without the acceptance of liability for the contractual risks associated with the role of a contractor, Valuation of immovable property Work relating to the determination of the value of immovable property. Land surveying Planning and integration The initiation and management of change in the built and natural environment across a spectrum of areas, ranging from urban to rural and delineated at different geographic scales (region, sub-region, city, town, village, neighbourhood), in order to further human development and environmental sustainability Project management Management on behalf of a client of the entire process necessary for the procurement of the design and the construction of a project from project initiation through to project close out; Design and implementation of geotechnical solutions Estimating and cost advice Cost planning Advice on tendering procedures and contractual arrangement Financial control over contracts Valuation of work in progress Cash flow budgets Final account in respect of the contract Liaison with other professionals as necessary in order to establish the scope of work embodied in each direct contract. Co-ordination and integration of the construction programmes of the various contracts into an overall construction programme. Co-ordination of the execution of the construction processes to ensure adherence to the overall construction programme. Arrange and monitor execution to ensure adherence to specification. Ensure that all necessary inspections are carried out. Arrange for and monitor the rectification of defective work. Determine value of immovable property Survey for the purpose of preparing a diagram or general plan to be filed or registered in terms of any law governing the registration of any land or rights in land Any survey affecting the delimitation of the boundaries or the location of the beacons of any land so registered Cadastral surveys The delimitation, regulation and management of land uses; The organisation of service infrastructure, utilities, facilities and housing The co-ordination and integration of social, economic and physical through the synthesis and integration of information for the preparation of strategic, policy, statutory and other development plans within the South African development context. Project initiation and briefing Concept and viability Design development Bid documentation and procurement Construction and contract administration Project close out An analysis of methods for procuring professional services in the CIDB Standard for Uniformity in Construction Procurement suggests that a register of professional service providers could readily support procurement processes involving routine projects in respect of the following: 1) The identification of a short list of not less than 5 tenderers so that qualified tenders can be solicited (nominated procedure) should clients maintain and operate an electronic data base. 2) Basic eligibility criteria to ensure that only the submissions made by tenderers who have the capability to perform the contract are evaluated (open procedure with the evaluation undertaken generally in terms of price and preference only). 6

7 3) The identification of not less than three qualified tenderers from whom quotes may be invited (quotation procedure) should clients have and maintain a list suitable for this purpose. 4) The identification of service providers who may be approached to prequalify for particular services (qualification procedure) or to submit proposals (proposal procedure). 5) Identification of a service provider who can perform a very small assignment (negotiated procedure) with or without an electronic data base Track record with respect to a limited range of subfields of expertise The register should indicate the track record of a limited range of subfields of expertise range of categories in which PSPs along the lines of those used by the National Department of Public Works (See Annexure 1) The degree of control exercised by registered professionals The number of principals (directors, members, partners or sole proprietors) who are professionally registered in terms of a statutory council need to be reflected to indicate the control exercised by registered professionals. It should be noted in this regard that the codes of conduct issued by the SACAP and ASAQS establish requirements which ensure that the majority of principals in architectural and quantity surveying practices, respectively, are professionally registered. SAACE and the Association of Consulting Town and Regional Planners of South Africa have similar requirements for member firms Minimum levels of professional indemnity insurance The minimum level of professional indemnity insurance cover and the maximum excess, if any, needs to be established and reflected on the register. It should be noted in this regard that some of the codes of conduct issued by built environment statutory councils establish requirements for professional indemnity.) SMME status and equity ownership The register should indicate the SMME status to provide an indication of the size of the PSP. It should also indicate equity ownership in relation to nationality, black persons, women etc BEE status of PSPs The Minister of Trade and Industry is empowered through the Broad-based Black Economic Empowerment Act (Act 53 of 2003) to issue Codes of Good Practice which will be applied in the development, evaluation and monitoring of BEE charters, initiatives, transactions and other implementation mechanisms including partnering and preferencing arrangements in the public sector. A charter for the construction sector has been developed and signed off by the Minister of Public Works. This charter, which is also applicable to the private sector, contains a generic scorecard which will be 7

8 converted into a sector specific scorecard and published as such by the Minister of Trade and Industry. Upon publication, it will be applicable to all public sector professional service appointments within the public sector. The efficient and effective implementation of a preferencing scheme in support of broadbased black economic empowerment is dependent upon client and public access to verified information on the rating of an enterprise in terms of a scorecard. A national listing of the verified ratings of professional service providers would minimize the risk of fronting and facilitate the validation of claims for preferences made during the tender process. The register of professional service providers can reflect such scores and be used for this purpose. Furthermore, such a register will enable gaps in empowerment to be readily detected and in this manner facilitate interventions to close such gaps. 5 Rosters The register of PSPs provides an opportunity to develop a national, centrally operated roster system for the routine appointments. 6 Conclusions Many public sector clients have or are currently developing lists of approved or prequalified professional service providers in response to supply chain management regulations issued in terms of the Public Finance Management Act of 1999 and the Municipal Finance Management Act of Accordingly, considerable savings in scarce government resources can be achieved should the CIDB put in place a single register of service providers who satisfy basic qualification criteria. At the same time, uniformity in qualification criteria would improve consistency in the application of the PFMA and MFMA supply chain management regulations regarding the procurement of professional services and reduce the burden placed on professional service providers in having to separately register with each organ of state. A register of professional service providers that establishes basic capabilities and recognizes the status of services providers in terms of any black economic empowerment programme will go a long way to reduce client risk, remove the administrative burden associated with the selection of professional service providers and streamline procurement processes. The registers will also provide a platform for development in this sector of the construction industry. It will facilitate: the identification of capacity and empowerment gaps and the systematic targeting of procurement and development interventions to support sustainable enterprises; the systematic introduction and implementation of best practice and performance improvement programmes. 8

9 Annexure 1: Possible subfields of expertise within a PSP The National Department of Public Works has rationalized the fields of competence in their roster system to appoint professional service providers to the following: 1 General G10 Environmental Impact assessment and management G20 Procurement documents/policies G30 Standard/normal land surveying services G40 Land and urban economical studies 2 Acoustical AC100 Auditorium acoustics AC110 Building acoustics AC120 Electro-acoustics (including public address systems) AC130 Noise and vibration control of machines AC140 Studio and recording room acoustics 3 Architectural A200 Normal/standard architectural services A210 Auditoriums, opera houses, concert halls and theatres A220 Communications, radio and television, & main frame computer buildings A230 High rise buildings A240 Hospitals / Clinics and laboratories A250 Mortuaries A260 Prisons (excluding housing & recreational facilities) A270 Historical/heritage facilities/ buildings (restoration/conservation reports/re-use) A280 Forensic and specialized investigation analyses 4 Landscape Architectural LA300 Design practitioners LA310 Environmental practitioners 5 Engineering 5.1 Electrical E400 Electrical distribution systems and reticulations including high voltage substations and network protection E410 Electrical installations in buildings E420 Power and emergency generating plants and uninterrupted power supplies E430 Street and area lighting E440 Lightning protection E450 Lift and escalator installations E460 High power DC and AC converters. (400 Hz) E470 Energy management and audits E480 Forensic investigations and analysis 5.2 Electronic EN500 Intercommunication, public address systems and PABX or other telephone systems EN510 CCTV installations, TV antenna installations EN520 Computer cabling networks EN530 Radio telemetry and SCADA systems EN540 Security, access control and monitoring systems (including equipment, metal detectors (walk through type) X-ray inspection units, electric fencing and alarm systems) 9

10 EN550 Forensic investigations and analysis 5.3 Civil C600 C610 C620 C630 C640 C650 C660 C670 C680 C690 C700 C710 C720 C730 C740 C750 Normal/standard civil engineering services Building services (wet services) Residential/Municipal/township services (water, sewer, roads and storm water) Outfall sewers, sewerage pump stations and pipelines Bulk water pipelines and pump stations Wastewater and sewerage treatment Water treatment Water management Solid waste disposal Concrete, earth- and rock-fill dams Traffic engineering Fuel installations Marine works Civil engineering services related to dolomitic areas (wet services) Civil engineering site clearance feasibility reports (services capacity & geological site surveying) Forensic investigations and analysis 5.4 Mechanical M800 Air-conditioning and mechanical ventilation M810 Boiler installations and steam distribution M820 Central heating and centralised hot water generation M830 Vacuum and pressurised air and gas systems M840 Materials, waste handling and conveying systems M850 Fire detection, alarm and protection systems M860 Kitchen equipment and services M870 Laundry equipment and services M880 Pumping installations and fluid reticulation for mechanical equipment M890 Refrigeration and cold rooms M900 Sterilising equipment M910 Forensic investigations and analysis 5.5 Structural S1000 Normal/standard structural engineering services S1010 Bridges S1020 High rise buildings S1030 Subsurface structures including tunnels S1040 Water retaining structures: subsurface, surface and elevated S1050 Structural engineering services in dolomitic conditions S1050 Timber structures (new and existing) S1060 Forensic investigations and analysis 6 Project Management L1100 Project management on building projects L1110 Project management on engineering projects L1130 Programme management 7 Quantity Surveying Q1200 Normal/standard quantity surveying services 8 Town planning T1300 Site specific town planning services for property development projects 10