Although CIDB grading requirements make it tricky for registered contractors to progress from one grading level to another, contractors are not prevented from applying for tenders above their grading status.

A contractor may be awarded work one level above their registered grading on condition that their registration classifies them as Potentially Emerging (PE), and that their prospective clients meet regulatory requirements to make a PE based appointment.

Are you a registered Grade 2 or 3 contractor looking to progress? Here’s a list of Financial and Works requirements to consider:

Grade 2 Contractors

  • Must have proof of completion for at least one project valued at more than R130 000.00

Grade 3 Contractors

  • Must have proof of completion for at least one project valued at more than R450 000.00
  • Must have an annual turnover of more than R1million
  • Must have more than R100 000 available capital

If you’re considering registering for a higher CIDB grade, you should also be able to prove that your business has the potential to grow and therefore qualify for the upgrade. Successfully completing previous projects will help accelerate your status in this regard.

Another way to improve your CIDB grading level is to enter into a Joint venture (JV). Remember: all partners in a JV must be individually registered. A JV’s combined grading can be determined using the CIDB Joint Venture Calculator

A JV agreement is assessed by the client based on two things:

  • The sum of the best annual turnover of all JV members
  • The sum of the available capital to all JV members

At CivilSure, we have the necessary contacts to assist should a member of a JV require bridging finance. We’re also able to assist should a member of a JV require the freedom to finance a project by using an Advance Payment Guarantee* or a Supplier Surety*.

Remember, securing Contractors All Risk Insurance & Guarantees for your projects will help put you one step closer to proving your business has the potential to move above your current grade.

For more information about Contractors All Risk Insurance or how to set up a Guarantee, feel free to contact us on 080 777 7771.

*Advance Payment Guarantee

An Advance Payment Guarantee provides the supplier with funds to purchase equipment or components, and/or to make other preparations. In general, the Advance Payment Guarantee should contain a reduction clause that automatically reduces the amount owing in proportion to the value of the (partial) delivery. It only becomes effective once the advance payment has been received and is only issued in connection with Performance Guarantees.

*Supplier Surety (Construction industry only)

There’s an increasing demand for Supplier Guarantees within the construction industry for the provision of steel and other building material. Credit insurance policies are currently only available to buyers and not suppliers.

WhatsApp Us