The short answer
Public sector construction contracts over R30,000 need cidb registration in the required grade or higher. A grade such as 4GB is the tender value range (grade 4 is up to R6 million) plus the class of works (GB is general building). Grade 1 has no financial or track-record criteria and is registered online.
Government construction work in South Africa runs through the Construction Industry Development Board (cidb). Its Register of Contractors grades every contractor by the size of contract it can handle and the type of work it does. A public sector construction tender says which grade it needs, and a bidder below that grade usually isn't evaluated. Here is how grading works.
When you need it
The cidb Act prohibits contractors who aren't registered with the cidb from undertaking public sector construction works contracts awarded through competitive tendering or quotations. The register applies to contracts worth more than R30,000 including VAT. A tender must state the lowest grade it will evaluate, and contractors registered in that grade or higher qualify. A contractor who isn't yet registered may still be evaluated if it can be registered in the required grade before the bids are evaluated.
Reading a grade
A grading is a number and two letters, for example 4GB. The number is the tender value range, the letters the class of works. A contractor can hold several gradings, one for each class. Contractors classed as potentially emerging have PE added, for example 4GBPE.
Tender value limits
The upper limit of each grade, including VAT, as revised from 7 October 2019:
- Grade 1: R500,000
- Grade 2: R1 million
- Grade 3: R3 million
- Grade 4: R6 million
- Grade 5: R10 million
- Grade 6: R20 million
- Grade 7: R60 million
- Grade 8: R200 million
- Grade 9: no limit
When a tender's estimated value is within 20% of the lower limit of a range, the tender asks for the grade below. The limits are revised from time to time, so check the cidb website for the current table.
Classes of works
- GB: general building works
- CE: civil engineering works (roads, water, sewerage, earthworks, bridges)
- EB: electrical engineering works in buildings
- EP: electrical engineering works for infrastructure (power, street lighting, substations)
- ME: mechanical engineering works
- SB to SQ: specialist classes, such as SJ for piling and SL for structural steelwork
How to register
- Grade 1 has no qualifying criteria. Register online through the cidb website portal.
- Grades 2 to 9 require financial and track record criteria: you show your available capital, turnover and the largest contracts you have completed in that class. Apply at a cidb provincial office with your supporting documents. The cidb says processing can take up to 21 working days.
There is an admin fee per application, and grades 2 to 9 also pay an annual fee that rises with the grade. The cidb lists current fees on its website and reviews them from time to time.
Staying registered
- A grading is valid for three years and expires on the anniversary of registration.
- During those three years, grades 2 to 9 must be updated each year with the annual fee. Two consecutive years without an update lead to suspension.
- After six years you must submit new documents showing you still meet the criteria for your grade.
Joint ventures
Contractors can combine for a bigger contract. The cidb regulations set which combinations are deemed to meet a higher grade, for example two grade 4 contractors for a grade 5 requirement, or three grade 7 contractors for grade 8. The tender document says whether joint ventures are allowed.
Before you bid
A construction tender also needs the usual paperwork: CSD registration, the SBD forms and often a B-BBEE affidavit, and many construction tenders have a compulsory site briefing. Terms are explained in the tender glossary. Honde lists what would disqualify a bid, including the CIDB grading asked for and compulsory briefings, for each tender. Browse open government tenders.
Questions people ask
Do I need CIDB registration to do government construction work?
Yes, for public sector construction contracts over R30,000 (including VAT) awarded through competitive tenders or quotations. Contractors must be registered with the cidb in the required grade or higher.
What does a grade like 4GB mean?
The number is the tender value range you can take on (grade 4 is up to R6 million) and the letters are the class of works (GB is general building). PE after it marks a potentially emerging contractor.
How do I get grade 1?
Grade 1 has no financial or track record criteria. You register online through the cidb website.
Can I tender for a contract slightly above my grade's limit?
The regulations allow a buyer to evaluate a tender somewhat above your range if the excess is reasonable. cidb guidance treats up to 10 to 15% over as usually reasonable and 20% or more as likely unreasonable.
How long is a CIDB grading valid?
Three years, with an annual update and annual fee in between for grades 2 to 9. Missing two consecutive annual updates leads to suspension.
Sources this guide was checked against
- cidb: overview of the Register of Contractors (cidb.org.za)
- cidb: Best Practice Guideline A6, applying the registers to construction procurement (July 2021) (cidb.org.za)
- National Treasury: PFMA SCM Instruction No. 9 of 2022/23, mandatory use of the eTender Portal (ocpo.treasury.gov.za)
Rules and forms change. If an advert or tender document says something different, follow it.