A thorough understanding of the Construction business Development Board’s (CIDB) grading system is essential for navigating the South African construction business. In addition to giving your company legitimacy, this system establishes the scope and cost of the projects you are able to embark on. This thorough tutorial will assist you in understanding and successfully navigating the CIDB grading procedure.
Understanding CIDB Grading
The CIDB grading system is designed to assess and categorize contractors based on their capability to execute construction projects of varying sizes and complexities. Grades range from 1 to 9, each corresponding to a specific tender value limit:
- Grade 1: Projects up to R500,000
- Grade 2: Projects up to R1,000,000
- Grade 3: Projects up to R3,000,000
- Grade 4: Projects up to R6,000,000
- Grade 5: Projects up to R10,000,000
- Grade 6: Projects up to R20,000,000
- Grade 7: Projects up to R60,000,000
- Grade 8: Projects up to R200,000,000
- Grade 9: No limit
These grades are periodically reviewed to align with inflation and economic conditions.
Classes of Works
Contractors are also classified based on their area of expertise, known as “classes of works.” Some of the primary classes include:
- GB: General Building
- CE: Civil Engineering
- EB: Electrical Engineering Works – Building
- EP: Electrical Engineering Works – Infrastructure
- ME: Mechanical Engineering
A comprehensive list of classes is available on the CIDB website.
Requirements for Grading
Achieving a CIDB grade involves meeting specific criteria related to your track record and financial capability:
- Track Record: For grades 2 to 9, you must provide evidence of completed projects within the last five years that align with the class of works you’re applying for. Essential documents include:
- Project award letters
- Completion certificates
- Payment certificates
- Bank statements
- Financial Capability: Your financial standing is assessed based on your best annual turnover over the past two years and available capital. For instance:
- Grade 3: Requires a best annual turnover of R1,000,000 and available capital of R100,000.
- Grade 6: Requires a best annual turnover of R6,500,000 and available capital of R1,300,000.
Application Process
Applying for CIDB grading has been streamlined through the eRoC portal:
- Log In: Access the portal using your CRS number, email, and password.
- Start Application: Select “New Application” and verify your company information.
- Provide Details: Enter information about principals and ownership.
- Select Class and Grade: Choose the appropriate class of works and desired grade.
- Declaration: Complete the declaration section, specifying your position within the company.
- Payment: Make the required payment using a bank card with a minimum balance of R450.
For grades 2 to 9, additional supporting documents are necessary, including company registration documents, ID copies of directors, tax compliance status pin, and evidence of track record. Grade 1 applications are typically processed within 48 hours, while grades 2 to 9 may take up to 21 working days.
Tips for a Successful Application
- Accuracy: Ensure all information and documentation are accurate and up-to-date.
- Compliance: Maintain tax compliance and have a valid tax clearance certificate.
- Financial Preparedness: Demonstrate financial stability through clear and comprehensive financial statements.
- Track Record: Keep detailed records of completed projects, including all relevant documentation.