Acts Online
GT Shield

Construction Industry Development Board Act, 2000 (Act No. 38 of 2000)

Notices

Best Practice Project Assessment Scheme: Standard for Contract Participation Goals for Targeting Enterprises and Labour through Construction Works Contracts

Appendixes

Appendix C : Model Memorandum of Understanding

 

Appendix C : Model Memorandum of Understanding

 

Memorandum of Understanding (MOU)

 

Between

 

___________ (the Employer)

 

and

 

___________ (the Community Project Committee)

 

for

 

___________ (the Project)

 

 

Date:                                  

 

C1. Interpretations and Definitions

 

Update definitions

Check that all are used

 

Agreement:

means this Agreement, including any Annexures attached hereto.

 

Employer:

means the [insert name of employer].

 

Contractor:

means the principal contractor that will be appointed to undertake the construction works project.

 

contract amount:

the financial value of the contract at the time of the award of the contract, exclusive of all allowances and any value added tax or sales tax which the law requires the employer to pay to the principal contractor.

 

Community Project Committee (CPC):

the appointed representatives of the affected communities, including Ward Councillors.

 

contract participation goal (CPG):
(a) in the case of targeted enterprises, including manufacturers or suppliers, the amount equal to the value of goods, services and works for which the principal contractor contracts targeted enterprises in the performance of the contract, expressed as a percentage of the tender value excluding escalation, contingency and value added tax associated with the targeting strategy that is identified in the targeting data.
(b) in the case of targeted labour, the sum of the wages and allowances, for which the principal contractor contracts to engage targeted labour in the performance of the contract, expressed as a percentage of the contract amount associated with the targeting strategy that is identified in the targeting data.

 

mediation:

a process where a neutral third party assists disputing parties in resolving conflict.

 

Parties:

means the [insert name of employer] and the Community Project Committee.

 

practical completion certificate:

a certificate issued in terms of a contract by the employer, signifying that the whole of the construction works have reached a state of readiness for occupation or use for the purposes intended, although some minor work may be outstanding.

 

project:

means the [insert name of construction works project].

 

signature date:

means when the last signing party has signed the agreement.

 

targeted enterprise:

a sole trader, partnership or legal entity which is

(a) a business within the target area,
(b) engaged in the performance of the contract, and
(c) defined as the target group in the targeting data.

 

targeted labour:

individuals who

(a) are employed by the contractor in the performance of the contract,
(b) are defined as the target group in the targeting data, and
(c) permanently reside in the target area or who are recognized as being residents of the target area on the basis of identification and association with and recognition by the residents of the target area.

 

targeted manufacturer:

targeted enterprise that operates or maintains a factory or establishment that produces on its premises materials or goods required by the contractor for the performance of the contract.

 

targeted supplier:

targeted enterprise that

(a) owns, operates or maintains a store, warehouse or other establishment in which goods are bought, kept in stock and regularly sold to wholesalers, retailers or the public in the usual course of business, and
(b) engages, as its principal business and in its own name, in the purchase and sale of goods.

Note: Adapted from SANS 10845-7:2015, definition 2.14

 

targeting strategy:

an approach which is pursued to make a contract participation goal an obligation of contract.

 

C2.        Background

 

The [insert name of employer] aims to enter into a contract with a cidb registered contractor for the construction of the [insert name of construction works project], which will be constructed in the following municipality/municipalities [delete which is not applicable]:

(a) [insert name of affected municipality/municipalities];
(b) [insert name of affected municipality/municipalities];

 

The construction will take place within the following Wards:

(a) [insert name of affected Wards];
(b) [insert name of affected Wards];

 

The construction works will target the use of local enterprises and local labour.

 

C3.        Objectives of this Agreement

 

The objectives of this Agreement are to obtain agreement with the Community Project Committee, representing the affected communities:

(a) on the targeting strategy and contract participation goals to be employed on the construction works; and
(b) on mediation for the resolution of community matters affecting the performance of the construction works contract (see cidb Standard for Contract Participation Goals for Targeting Enterprises and Labour through Construction Works Contracts).

 

C4.        Roles and Responsibilities

 

C4.1 The Employer’s responsibilities:

 

(a) The Employer shall facilitate the establishment of a Community Project Committee representing the affected communities. The Community Project Committee should include the affected Ward Councillor(s) and relevant community leaders.
(b) The Employer shall present the Employer’s proposed targeting strategy and contract participation goals to be employed on the construction work.
(c) The Employer shall seek agreement with the Community Project Committee, representing the affected communities, on a targeting strategy and contract participation goals to be employed on the construction work.
(d) The Employer shall seek agreement with the Community Project Committee, representing the affected communities, on mediation for the resolution of community matters affecting the performance of the construction works contract10.
(e) The cost of such mediation shall be to the Employer’s account.

 

C4.2 The Community Project Committee’s responsibilities:

 

(a) The Community Project Committee shall represent the affected communities, and shall seek to obtain the mandate to represent the affected communities in good faith. The affected communities should be represented by their relevant Ward Councillors, and the Community Project Committee shall record this mandate in writing.
(b) The Community Project Committee shall seek agreement with the Employer on a targeting strategy and contract participation goals to be employed on the construction work.
(d) The Community Project Committee shall seek agreement on mediation for the resolution of community matters affecting the performance of the construction works contract11.

 

C4.3        Agreement:

 

(a) The agreement reached between the Parties shall be included as Annex 1 to this Agreement, and shall also be included in the contract data of the Project.

 

 

C5.        Deliverables and Timeframes

 

This Agreement will come into effect on the date of signing of this agreement, and shall remain in effect until issuing of a practical completion certificate.

 

C6.        Sole Agreement

 

This Agreement constitutes the sole record of understanding between the Parties with respect to the subject matter and supersedes any previous agreement between parties.

 

 

Signatures

 

 

[insert name of employer]

[insert name of CPC]

Authorised Signature: __________________

Authorised Signature: __________________

Name: __________________

Name: __________________

Date: __________________

Date: __________________

 

 

Annex 1: Community Agreement

 

 

 

 

 

 

 

 

 

 

                                                                                                           

 

10 As specified in the cidb Standard for Contract Participation Goals for Construction Works Contracts.
11 ibid