CONTRACTUAL REPORT PRESENTED TO THE ECA(SA) NATIONAL EXECUTIVE COMMITTEE

Herman Kriel, chairman of the ECA(SA)’s Contractual Committee presented his report to the National Executive Committee on 31 May, outlining the work done by the committee.

WEBINAR

Our first ever webinar training session took place on 25 April 2017 with Herman Kriel of Brand SA presenting on the topic, ‘Pitfalls of Tendering’.

The webinar was the culmination of many hours of discussions and preparation, and was presented free of charge to ECA (SA) members as well as to non-members.

The objective of these webinars is to share knowledge about contractual matters with electrical contractors in South Africa in order to create a greater awareness of the rights and duties of a subcontractor, who is a very important part of the project team.

Two further webinars in this series are planned and will focus on:

  • Pitfalls of Project Administration
  • Pitfalls of Project Management

Invitations to these webinars will be sent out by the ECA(SA) and delegates will be able to enjoy the benefits of this new service, offered to you by the ECA(SA), in the comfort of your home or office.

THE SOUTH AFRICAN INSTITUTE OF REFRIGERATION & AIR CONDITIONING

I have been invited to address members of the above organisation in Port Elizabeth on the latest developments regarding the April 2017 JBCC Principal and N/S Subcontractor Agreements.

The Preliminaries document, to be used by the Principal Contractors has now been finalised, and the ECA(SA) is involved in discussions to amend the Preliminaries document to apply to subcontractors.

JBCC RE-STRUCTURE

The JBCC Board of Management commissioned IQ Capital to facilitate a two-day workshop in Johannesburg on 24 and 25 April 2017, which focused on the role and significance of JBCC in a competitive market where the following contract documents are marketed and sold by its competitors: NEC; FIDIC; JCT; and GCC.

All the major constituent bodies, including ECA (SA) were represented at the workshop during which the following issues were considered:-

  • How and why are the other contracts used in the market place relative to JBCC?
  • Are these contracts increasingly being used rather than JBCC?
  • Who are the main users of which documents?
  • Which standard clauses in contract documents are most commonly altered and why?
  • Which clauses are most often the subject of disputes and why?
  • Define the JBCC target market and agree on measures to make its suite of contract documents more applicable to a wider audience.
  • Should JBCC continue operating as a NPC (Non-Profit making Company) with a paid Advisory / Technical Board?

The outcome of these deliberations, together with the proposals formulated during the workshop will be captured in a report to be circulated to all constituent members of JBCC.

NOMINATED SUPPLIERS

The attempt by the ECA(SA) to include nominated suppliers of electrical equipment and materials in the JBCC contractual ‘chain’ was unsuccessful.

This means that such suppliers will continue to impose their own contract conditions regarding payment terms on N/S Subcontractors, and those suppliers would not be obliged to adhere to the contractual conditions as prescribed in the N/S Subcontract Agreement.

Members will, as in the past, have to negotiate their own contract conditions with their nominated suppliers.

CONTRACT PRICE ADJUSTMENTS

The ECA(SA) has requested Richard Klaas at Statistics (SA) – Richard@statssa.gov.za to provide us with the conversion factors to assist members who are required to calculate escalation on contracts executed between 2008 and December 2016.

This is necessary in view of the rebasing of all the indices to equal 100 with effect from 1 January 2017.

BROAD-BASED BLACK ECONOMIC EMPOWERMENT

Publication of the revised Construction Sector Charter Codes is imminent.

As soon as the document has been released, the Contractual Committee will evaluate to what extent electrical contracts will be affected by its provisions, and determine how to address the matter for the benefit of ECA(SA) members.

APPOINTMENT OF SMME CONTRACTORS

At a recent Joint Practice Committee meeting in Port Elizabeth, constituent members voiced concerns about the requirements in the Preferential Procurement Policy Framework Act (PPPFA), to award up to 30% of the contract value to local SMME contractors.

These contractors are not organised and often different groupings in an area claim to represent the local population and demand that the available work be allocated to them, often resulting in disruptions of the work programme as a result in fighting between the SMME groupings.

The current contractual conditions, which regulate such contracts, place all the risks in the hands of the contractor and/or sub-contractor and no extension of time is granted in the event of late completion. It was agreed that this situation negatively impacts on service delivery and results in costly delays as well as labour unrest and service delivery protests.

The ECA (SA) National Contractual Committee will discuss this matter at its next meeting on Tuesday, 13 June 2017 and provide its comments to Master Builders SA for consideration.

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