CIDB grading: what a contractor's grade means, how to check it and what it does not tell a buyer

CIDB grading is how South Africa's Construction Industry Development Board (CIDB) categorises contractors on its Register of Contractors: in grades 1 to 9, per class of construction works, according to financial and works capability.^[5]

A CIDB grade is one digit and two letters, such as 4GB: the digit is the grading level, 9 the highest, and the letters are the class of works. A contractor classified as potentially emerging carries two more letters, as in 4GBPE.^[5]

Grade 1 has no qualifying criteria, grade 2 requires track record, grades 3 to 9 require track record and financial criteria, and every grade carries "a maximum tender value limit beyond which public sector clients may not award a contractor construction projects".^[5][6][8]

No. In South Africa, the CIDB Act requires registration for public-sector work only: 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 registered with the CIDB (section 18(1)).^[1]

The rules on inviting and awarding contracts by grade apply "only to a client or employer who is an organ of state", on construction works contracts above R30 000 including VAT (regulation 23, as the CIDB's Practice Note 3 quotes it). Only prime or main contractors must register, not subcontractors or labour-only contractors.^[3][5]

Private clients may still use the register: the Act sets it up partly "to enable access by the private sector and thus also facilitate private sector procurement" (Chapter Three).^[1]

For public clients, maintenance is construction works: the Act's definition covers the "development, extension, installation, repair, maintenance, renewal", removal, renovation, alteration, dismantling or demolition "of a fixed asset including building and engineering infrastructure" (section 1).^[1]

Check a contractor's CIDB grade yourself on the CIDB's online Register of Contractors: the CIDB "does not issue registration certificates", and it tells public employers that registration status "can change over time", so they "must check the status of contractors on the website and not rely on contractor registration certificates".^[5][3]

The CIDB's procedure for public employers runs like this:^[3]

• Ask for the contractor's CRS number, its single CIDB registration number; public tender forms already ask for it.^[5][3]
• Open the Register of Contractors (the "Registered Contractors" link on the CIDB website) and search by CRS number or name; it also filters by class of work, grade, status and province.^[7][5]
• Read the grading against your job: the digit must cover your contract value including VAT, the letters your class of work.^[3][5]
• Check the status and expiry date on the entry: the register lists expired and suspended contractors too.^[7]
• Follow the search page's links to National Treasury's Database of Restricted Suppliers and Register for Tender Defaulters.^[7]
• Check again just before you sign: the procedure repeats the register check "immediately prior to the award of the contract".^[3]

Work the CIDB grade out from the estimated contract value including VAT, as public clients must: find the value range the estimate falls in, and if the estimate is not more than 20% above that range's lower limit, ask for the grade below (the procedure in the CIDB's Practice Note 3).^[3]

For example, a mechanical upgrade estimated at R11.5 million including VAT falls in the grade 6 range (R10 million to R20 million) but is not more than 20% above R10 million (that is, R12 million or less), so the requirement is 5ME or higher.^[3][2]

On a contract running several years for work "as and when required" or of a routine nature, the value may be taken as the annual value (regulation 25(1B)).^[3]

A public client may accept a tender above a grade's limit where the margin is "reasonable" and the award poses no undue risk (regulation 25(7A)); the CIDB suggests up to 10 or 15% above the upper limit "would in most circumstances be considered" reasonable, and 20% or more is "likely to be considered unreasonable".^[3]

A joint venture's grade is worked out from its partners' combined grading data, with the CIDB's calculator or its deemed combinations, and every partner must be registered; three partners graded 7, for instance, count as grade 8.^[3]

1. The class of works, if you want a graded contractor: ME for machines, boilers, compressed air or conveyors, EB for electrical installations on your site, EP for power infrastructure.^[4][3]
2. The estimated contract value including VAT, or the annual value for a term maintenance contract, and the minimum grade it implies under the 20% rule.^[3][2]
3. The contractor's CRS number, and each partner's for a joint venture, so you can look the grading up yourself.^[5][3]
4. The register entry checked on the day you award: grade, class, status and expiry date.^[7][3]
5. Comparable contracts completed in the same class, each with the client's award, completion certificate and payment certificate: the evidence the CIDB asks for.^[6]
6. Which parts of the work the graded firm will do itself, since subcontractors need no grade.^[3][5]
7. The people, plant and supervision the contractor will put on the job, since a client of construction work must ensure the principal contractor has the competencies and resources (Construction Regulations, 2014, regulation 5(1)(h)).^[10]
8. For construction work, proof before work starts that the principal contractor is registered and in good standing with the Compensation Fund or a licensed compensation insurer (regulation 5(1)(j)).^[10]