cidb Endorsed Forms of Contracts

Selecting the correct contract can be hassle, but is a crucial step in setting up a successful and binding agreement. There are four available cidb endorsed forms of contracts. For ease of overview, we have compiled a consolidated document for your reference and use.

Joint Ventures

Considering a joint venture agreement to fulfil a tender? Herewith a quick overview of pertinent points to consider within a good joint venture agreement:

• should clearly and comprehensively set out the contributions to be made by each member towards the activities of the joint venture in securing and executing the contract and should allocate monetary values to such contributions.
• should record the percentage participation by each member in all aspects of the fortunes of the joint venture, including risks, rewards, losses and liabilities.
• should provide for meaningful input by all members to the policy making and management activities of the joint venture;
• should provide for the establishment of a management body for the joint venture;
• should provide measures to limit, as far as possible, losses to the joint venture by the default of a member;
• should promote consensus between the members whilst ensuring that the activities of the joint venture will not be unduly hindered by failure to achieve it;
• should provide for rapid, cheap and easy interim dispute resolution and for effective final dispute resolution, if required; and
• should be sufficiently flexible to allow for joint ventures which differ in nature, objectives, inputs by members, management systems, etc;

The following joint venture agreements are recommended for use or to serve as a basis for the development of an agreement:

• The CIDB Joint Venture Agreement, which is intended for use by all types of contractors including professional service providers 1 .
• The South African Federation of Civil Engineering Contractors (SAFCEC) Joint Venture Agreement and Heads of Agreement, which is intended only for joint ventures between established contractors and is not suitable for use by professional service providers.
• The International Federation of Consulting Engineers (FIDIC) Joint Venture Consortium Agreement, which is intended only for joint ventures between professional service providers and is not suitable for use by contractors.

Subcontracting Arrangements

There are three types of subcontractors provided for in standard forms of contract for construction works, namely:

Domestic subcontractor: subcontractor appointed by the main contractor at his discretion;
Nominated subcontractor: a subcontractor nominated by the employer which the contractor is obliged to appoint as a subcontractor; and

Selected subcontractor: a subcontractor selected by the contractor in consultation with the employer in terms of the requirements of the contract.