an investigation of training and mentoring of emerging
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PERFORMANCE EVALUATION OF CONTRACTOR DEVELOPMENT PROGRAMMES IN SOUTH AFRICA
by
AMBROSE DENTEH DAPAAH
A dissertation submitted in partial fulfilment of the requirements for the degree of
MAGISTER TECHNOLOGIAE
in
CONSTRUCTION MANAGEMENT
in the
FACULTY OF ENGINEERING AND BUILT ENVIRONMENT – DEPARTMENT OF CONSTRUCTION MANAGEMENT AND QUANTITY
SURVEYING
UNIVERSITY OF JOHANNESBURG
SUPERVISOR: PROF. W.D. THWALA
CO-SUPERVISOR: DR. I. MUSONDA
April 2016
ii
DECLARATION
I, AMBROSE DENTEH DAPAAH, do hereby declare that the “Performance
evaluation of contractor development programmes in South Africa” is my own
heuristic research, that all sources I have used or cited have been acknowledged,
and that it has never been submitted for degree purposes to this or any other
university. It is presented to the University of Johannesburg (Department of
Construction Management and Quantity Surveying) in fulfilment of the requirement
for MAGISTER TECHNOLOGIAE degree in Construction Management.
Signature…………………………………………………………April 2016
A.D. Dapaah
University of Johannesburg
Doornfontein Campus
iii
ACKNOWLEDGEMENTS
I am deeply beholden to YAHWEH-JIREH, The Lord, who provided and His Son,
Jesus Christ, without whom this academic task could not have been realised.
I would also like to specially thank Prof. D.W. Thwala, my supervisor, for his
guidance and Dr. Innocent Musonda, my co-supervisor, for his counsel, patience
and constructive criticism in achieving the objectives of this inquiry and conveying
it to realisation.
I am thankful to my parents, the late Mr. Bossman Denteh and Madam Christiana
Kumah, and also to my sister, Elizabeth Denteh, without forgetting my nephews
and nieces, Henry, Mabel, Charlotte, Jesse, Grace, Anna and Saviana, for their
contribution to upliftying my spirit.
Lastly, my sincere appreciation goes to the entire staff and members of the
Department of Construction Management and Quantity Surveying, University of
Johannesburg, South Africa.
Dapaah, A.D.
April 2016
iv
DEDICATION
This work is dedicated to:
My son, Master Bossman Dapaah,
My wife, Comfort, and
My late sister, Lucy Dapaah.
v
ABSTRACT
Contractor development programmes (CDPs) are aimed at creating an enabling
environment for the continued existence and sustainability of small, medium and
micro enterprise (SMME) contractors. Literature shows that the views of
beneficiaries of these CDPs have not been sufficiently evaluated to access their
effect. The purpose of this study was to establish from the beneficiaries what their
expectations of the CDPs are and whether they believed the CDPs are meeting
those expectations.
A questionnaire survey, consisting of closed-ended as well as open-ended
questions, was administered to, and structured interviews were conducted with the
respondents to establish their views on the CDPs and whether they have benefited
from the CDPs. Based on the findings, recommendations were made on how
CDPs could be improved.
The study showed that the beneficiaries were fairly satisfied with the CDPs and
regarded them as adding some value to their upgrade and sustainability; however,
gaps exist within the CDPs that require the implementing agencies’ attention to
ensure the successful implementation of the CDPs. Evidence from the study
showed that CDPs which had a strong mentorship programme also had a higher
number of contractor upgrades. Information from interviews also revealed that
contractors believed that continuous mentorship programmes would be the
solution to the lack of CDPs performance. Therefore continuous contractor
mentorship (CCM) programmes were found to be vital to a successful CDP and
these were found to be lacking in most South African CDPs. Therefore the study
will aid in improving the quality of the CDPs and achieving their goals of developing
a contractor. The research focused on contractors as a whole who had undergone
the CDPs and did not separate them into their fields of specialities such as general
building, engineering or specialised contractors. The questionnaire survey was
conducted only in the Gauteng Province of South Africa and not the entire country.
Keywords: Contractor development programmes; contractor mentorship; small,
medium and micro enterprise contractors
vi
TABLE OF CONTENTS
DECLARATION .............................................................................................ii
ACKNOWLEDGEMENTS ............................................................................. iii
DEDICATION ...............................................................................................iv
ABSTRACT .................................................................................................. v
TABLE OF CONTENTS ...............................................................................vi
LIST OF TABLES ........................................................................................ xii
LIST OF FIGURES ..................................................................................... xiii
LIST OF ACRONYMS ................................................................................ xiv
DEFINITIONS ............................................................................................. xvi
CHAPTER ONE ............................................................................................ 1
INTRODUCTION .......................................................................................... 1
1.1 BACKGROUND ................................................................................... 1
1.2 RESEARCH OBJECTIVE .................................................................... 6
1.3 OBJECTIVES ....................................................................................... 6
1.4 BENEFIT OF THE STUDY ................................................................... 7
1.5 SCOPE OF THE RESEARCH.............................................................. 7
1.6 DELIMITATION OF THE STUDY ......................................................... 7
1.7 STRUCTURE OF THE REPORT ......................................................... 7
1.8 CONCLUSION ..................................................................................... 9
CHAPTER TWO ......................................................................................... 10
LITERATURE REVIEW: CONTRACTOR’S DEVELOPMENT PROGRAMMES ................................................................................................................... 10
2.1 INTRODUCTION ................................................................................ 10
2.2 HISTORY OF CONTRACTOR DEVELOPMENT PROGRAMMES .... 10
2.3 CONTRACTOR DEVELOPMENT PROGRAMME FRAMEWORKS .. 11
2.3.1 Qualities of a successful contractor development programme 12
vii
2.3.2 Aims and objectives of contractor development programmes . 14
2.3.3 Challenges of contractor development programmes ............... 16
2.4 MENTORSHIP IN CDPs .................................................................... 17
2.4.1 Components of mentoring in training and development .......... 18
2.4.2 Mentorship programmes .......................................................... 21
2.4.3 Benefits of mentoring for the mentor and the protégé ............. 21
2.4.4 Mentorship of a company ........................................................ 22
2.5 CONCLUSION ................................................................................... 28
CHAPTER THREE ..................................................................................... 29
CONTRACTOR DEVELOPMENT PROGRAMMES – SOUTH AFRICAN PERSPECTIVE .................................................................................. 29
3.1 INTRODUCTION ................................................................................ 29
3.2 Legislative backing of CDPs in South Africa ...................................... 29
3.2.1 Emerging contractor development programmes (ECDPs) ....... 30
3.2.2 Contractor incubator programmes ........................................... 30
3.2.3 Eskom Construction Academy ................................................. 34
3.2.4 Vuk’uphile Learnership Programme ........................................ 35
3.2.5 Masakhe Emerging Contractor Development Programme ...... 41
3.2.6 Small Enterprise Development Agency – Construction Incubator (SCI) Programme..................................................... 43
3.2.7 Khuthaza Contractor Development .......................................... 46
3.3 CONCLUSION ................................................................................... 50
CHAPTER FOUR ....................................................................................... 51
REVIEW OF INTERNATIONAL CONTRACTOR DEVELOPMENT PROGRAMMES ................................................................................. 51
4.1 Introduction ........................................................................................ 51
4.2 Development programme – Tanzania CRB initiative .......................... 51
4.2.2 Development programme – Tanzania NCC initiative ............... 53
4.2.3 Development programme – Palestine ..................................... 54
4.2.4 Development programme – Lesotho ....................................... 55
viii
4.3 CONCLUSION ................................................................................... 58
CHAPTER FIVE ......................................................................................... 60
CONTRACTOR DEVELOPMENT MODELS .............................................. 60
5.1 INTRODUCTION ................................................................................ 60
5.1.1 The South African Construction Excellence Model .................. 60
5.1.2 The Integrated Emerging Contractor Development Model ...... 61
5.1.3 Supply-side interventions to accelerate growth of priority enterprises ............................................................................... 65
5.2 FACTORS FOR SUCCESFUL IMPLEMENTATION OF CDPs .......... 68
5.2.1 Classroom work ....................................................................... 69
5.2.2 Fieldwork ................................................................................. 69
5.2.3 Mentorship ............................................................................... 69
5.3 CONCLUSION ................................................................................... 71
CHAPTER SIX ............................................................................................ 72
IMPORTANCE OF CDPs IN THE CONSTRUCTION INDUSTRY .............. 72
6.1 CONSTRUCTION’S CONTRIBUTION TO ECONOMIES .................. 72
6.2 CONSTRUCTION BUSINESS REQUIRES COMPETENCE ............. 74
6.2.1 Technical competences ........................................................... 76
6.2.2 Managerial/business competences ......................................... 76
6.2.3 Generic skills and knowledge competence .............................. 77
6.3 FACTORS CONSTRAINING THE COMPETITIVENESS OF SMME CONSTRUCTION BUSINESSES ...................................................... 77
6.4 CONTINUOUS TRAINING AND DEVELOPMENT ............................ 81
6.4.1 The concept of training and development ................................ 82
6.4.2 Modules of training and development programmes ................. 82
6.4.3 Model of training management ................................................ 83
a) Identifying training needs ................................................................ 85
b) Identifying competence gaps ........................................................... 87
c) Setting training objectives................................................................ 87
ix
d) Securing or designing training programmes .................................... 88
e) Training methods ............................................................................ 89
f) Providing training ............................................................................. 89
g) Evaluating the training ..................................................................... 91
h) Follow up training ............................................................................ 91
6.4.4 Benefits of training and development ...................................... 92
6.5 CONCLUSION ................................................................................... 93
CHAPTER SEVEN ..................................................................................... 95
RESEARCH METHODOLOGY .................................................................. 95
7.1 INTRODUCTION ................................................................................ 95
7.2 RESEARCH DESIGN ........................................................................ 95
7.3 RESEARCH TOOLS .......................................................................... 95
7.3.1 Questionnaire .......................................................................... 95
7.3.2 The structured interview .......................................................... 97
7.4 DATA COLLECTION .......................................................................... 98
7.5 RELIABILITY AND VALIDITY ............................................................ 99
7.6 RATING SCALE ............................................................................... 101
7.7 THE CORRELATION BETWEEN CDPs AND THEIR OUTCOMES 101
7.8 CONCLUSION ................................................................................. 102
CHAPTER EIGHT .................................................................................... 103
PRESENTATION OF RESULTS .............................................................. 103
8.1 INTRODUCTION .............................................................................. 103
8.2 RESPONDENTS’ PROFILES .......................................................... 104
8.3 RESULTS ........................................................................................ 105
8.3.1 Implementation of CDPs ........................................................ 105
8.3.2 Results on improvement of management skills ..................... 106
8.3.3 Results on contractor upgrades ............................................. 107
8.3.4 Results on participation of previously disadvantaged individuals .............................................................................. 109
x
8.3.5 Results on contractor satisfaction with the CDPs .................. 109
8.3.6 Value addition of the development programmes ................... 111
8.4 RESULTS FROM THE INTERVIEW ................................................ 112
8.4.1 Consultants’ responses on CDPs and contractors’ performance .......................................................................... 112
8.4.2 Contractors’ views on long term mentorship .......................... 112
8.5 IMPACT OF THE MENTORSHIP PROGRAMME ON CONTRACTORS’ CIDB GRADING ................................................. 113
8.5.1 Migration in CIDB grading in Vukuzakhe Contractor Development Programme ...................................................... 114
8.5.2 Migration in CIDB upgrade in the Masakhe Contractor Development Programme ...................................................... 115
8.5.3 Migration in CIDB upgrade in EPWP-Vuk'uphile Learnership Programme ............................................................................ 116
8.5.4 Migration in CIDB upgrade in Khuthaza Contractor Development Programme ...................................................... 117
8.5.5 Migration in CIDB upgrade in SCI Programme ...................... 118
8.5.6 Migration in CIDB upgrade in Eskom Construction Academy 119
8.5.7 Migration in CIDB upgrade in other construction development programmes .......................................................................... 120
8.6 CONCLUSION ................................................................................. 121
CHAPTER NINE ....................................................................................... 123
DISCUSSION OF THE RESULTS ............................................................ 123
9.1 INTRODUCTION .............................................................................. 123
9.2 QUESTIONNAIRE SURVEY RESULTS .......................................... 123
9.2.1 Improvement of management skills ....................................... 123
9.2.2 Contractor upgrades .............................................................. 124
9.2.3 Participation of PDIs .............................................................. 125
9.2.4 Contractor satisfaction ........................................................... 126
9.3 STRUCTURED INTERVIEW RESULTS .......................................... 127
9.3.1 Consultants’ perception of CDPs’ impact on contractor performance improvement ..................................................... 127
xi
9.3.2 Contractors’ perceptions on mentorship ................................ 127
9.4 KEY FINDINGS ................................................................................ 128
9.4.1 Continuous contractor mentorship ......................................... 129
9.5 CONCLUSION ................................................................................. 131
CHAPTER TEN ........................................................................................ 132
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS .................... 132
10.1 INTRODUCTION ................................................................... 132
10.2 OBJECTIVES OF THE STUDY ............................................. 132
10.2.1 Objective one......................................................................... 132
10.2.2 Objective two ......................................................................... 133
10.2.3 Objective three ...................................................................... 133
10.2.4 Objective four ........................................................................ 133
10.3 CONTRIBUTION AND VALUE OF THE RESEARCH ........... 134
10.4 CONCLUSION ....................................................................... 134
10.5 RECOMMENDATIONS ......................................................... 135
10.5.1 Methodological ...................................................................... 136
10.5.2 Theoretical ............................................................................. 136
10.5.3 Practical ................................................................................. 136
10.6 LIMITATIONS ........................................................................ 137
10.7 SUGGESTION FOR FURTHER RESEARCH ....................... 137
10.8 CONCLUSION ....................................................................... 137
REFERENCES ......................................................................................... 140
APPENDICES .......................................................................................... 170
xii
LIST OF TABLES
Table 3.1: Requirement in relation to contractor grading designation ........... 33
Table 4.2: CDP gaps in some developing countries ....................................... 58
Table 5.1: Factors for successful CDPs ........................................................ 70
Table 7.1: Cronbach’s Alpha Coefficient ...................................................... 100
Table 8.1: Implementation of CDPs .............................................................. 105
Table 8.2: Improved management skills ....................................................... 106
Table 8.3: Contractor upgrade ...................................................................... 108
Table 8.4: Participation of PDIs ................................................................... 109
Table 8.5: Contractor satisfaction ................................................................. 110
Table 8.6: Migration in CIDB grading in Vukuzakhe CDP ............................ 115
Table 8.7: Migration in CIDB grading in Masakhe CDP ................................ 116
Table 8.8: Migration in CIDB grading in Vuk'uphile CDP .............................. 117
Table 8.9: Migration in CIDB grading in Khuthaza CDP ............................... 118
Table 8.10: Migration in CIDB grading in SEDA CDP .................................... 118
Table 8.11: Migration in CIDB grading in Eskom CDP ................................... 119
Table 8.12: Migration in CIDB grading in others CDP .................................... 120
xiii
LIST OF FIGURES
Figure 5.1: The structure of SACEM ................................................................ 61
Figure 5.2: The structure of IECDM ................................................................. 65
Figure 5.3: Supply-side interventions required to accelerate the growth of prioritised enterprises .................................................................... 68
Figure 5.4: Elements of successful CDPs........................................................ 71
Figure 6.1: Eckstrand's systems model of training ........................................... 83
Figure 6.2: The ADDIE model of training ......................................................... 84
Figure 6.3: The PRISM model for training management ................................. 85
Figure 6.4: The hierarchy of training needs ..................................................... 86
Figure 8.1: CIDB grading before and after CDP ............................................ 108
Figure 8.2: Response on whether CDPs were a waste of time ...................... 111
Figure 8.3: Percentage of migration in CIDB grading .................................... 114
xiv
LIST OF ACRONYMS
CCM Continuous contractor mentorship
CDP Contractor development programmes
CETA Construction Education Training Authority
CIDB Construction Industry Development Board
CIP Contractor incubator plan
CPD Continuous professional development
CSIR Council for Scientific and Industrial Research
ECDP Emerging Contractor Development Programme
EPWP Expanded Public Works Programme
ETQA Education and Training Quality Assurance
FIEC European Construction Industry Federation
GDP Gross domestic product
HDI Historically disadvantaged individuals (see PDI)
IECDM Integrated Emerging Contractor Development Model
ILO International Labour Organisation
NDPW National Department of Public Works
OECD Organization for Economic Co-operation and Development
PDI Previously disadvantaged individuals (see HDI)
RDP Reconstruction and Development Programme
SACEM South African Construction Excellence Model
xv
SAFCEC South Africa Federation of Building and Civil Engineering
Contractors
SEDA Small Enterprise Development Agency
SETA Sector Education and Training Authorities
SME Small and medium-sized enterprises
SMME Small, medium and micro Enterprises
StatsSA Statistics South Africa
xvi
DEFINITIONS
Construction industry – the broad conglomeration of industries and sectors
which add value in the creation and maintenance of fixed assets within the built
environment (CIDB Act, Act No.38 of 2000).
Contractor – a person or body of persons who undertakes to execute and
complete construction works (CIDB Act, Act No.38 of 2000).
Emerging enterprise – an enterprise which is owned, managed and controlled by
previously disadvantaged persons and which is overcoming business
impediments arising from the legacy of apartheid (CIDB Act, No.38 of 2000).
Empowerment – a process whereby SMME entrepreneurs reduce their situation
of dependency in relation to the historical dominance of white-owned business
(Havemann, 1999).
Enabling environment – a set of interrelated conditions (such as legal,
organisational, fiscal, informational, political and cultural) that impact on the
capacity of development actors (Brinkerhoff, 2004).
Management skills – skills required for dealing with or controlling things or people
(Kohlrieser, 2006:99–122).
Mentorship – a human development process that facilitates personal and
professional growth (CMIT, 2010).
Project – a construction works contract or a series of related construction work
contracts (CIDB Act, Act No.38, 2000).
Qualification – formal education level attained in capacity, knowledge or skill at a
higher learning institution that makes someone suitable to be a practitioner of a
particular profession (CETA, 2000).
Training – acquisition of skills and competencies as a result of practical skills
imparted to the individual professional (CETA, 2000).
1
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND
This chapter introduces the study by providing the background and the problem
context for the research. It states the research questions, the aims and objectives of
the study followed by the research hypotheses. The chapter goes on to explain the
benefits of the study to the built environment, the scope of the study and the
delimitations of the study. Lastly, the chapter outlines the structure of the dissertation.
CDPs have been seen as the solution needed to assist SMMEs to develop their
capabilities to the standard of large enterprises. CDPs in South Africa can be traced
back to 1995 when the National Department of Public Works (NDPW) announced
programmes intended to support contracting companies owners by PDIs to develop
their expert and managerial skills so that they could be equipped to compete with
construction firms established (NDPW, 2004:3).
Subsequent to this initial programme, most regional governments developed CDPs
with similar intents as those of the NDPW. The modelling, outline and the execution of
some of these programmes have been extensively studied, such as the CDP (CIDB,
2011:1-35), the South African Construction Excellence Model (SACEM) (Dlungwana
et al., 2002:1-8) and the Integrated Emerging Contractor Development Model (IECDM)
(Hauptfleisch et al., 2007:1-13).
Even though there are some positive outcomes achieved by some of these CDPs in
the past as postulated by Havemann (2001), Söderbaum (2001) and Mojapelo, Rakale
and Gertzen (2001), McCutcheon and Parkins (2002), , there still appears to be a
limited amount of literature on the success of CDPs and whether they remain useful
to the clients. As Jacquet (2002:7) observed:
“The greatest challenge that exists today in South Africa lies in the fact that no
data is available on how effective interventions are, whether they are achieving
successes, and which sector requires most assistance”.
2
The CIDB concurs with this assertion by recommending that the CPDs must be
evaluated to seek “…the perceptions of the programme beneficiaries on the direct
effects of the programme in addressing their needs” (CIDB, 2011:84).
Studies have shown that few assessments have been carried out on the effects of
CDPs in South Africa, and therefore considerable work remains to be done (CIDB,
2009). This assertion has been affirmed by a study conducted by the OECD in 2002,
where the United Kingdom (UK) and Japan were the only ones that assessed the
results of their training programmes (OECD, 2002:17). Therefore, the current study
endeavours to investigate contractors’ perceptions of CDPs in South Africa and how
beneficial these have been to them. The evaluation was considered to be vital as it
would contribute towards improving the CDPs. The CDPs are critical to the
sustainability of SMMEs.
The significance of SMMEs in general and specifically those in the construction sector
has been thoroughly researched worldwide. It was observed by the World Bank
(2003:3-4) that the contribution of SMME’s is crucial to economic growth, which is
essential for a competitive and efficient market. This plays a criticial role in the
reduction of poverty and a principal role in the developing nations. Russian SMMEs
total 90 per cent of the overall number of companies in the economy, accounting for
45 per cent of the entire employment and 40 per cent of the total sales in the economy.
The Chinese economy outlook on the report was not much different, as SMMEs
totalled 99.9 per cent of the total number of firms, 84 per cent of the total employment
and 71 per cent of total sales of the economy (World Bank, 2003:6-8).
Therefore the participation of SMMEs in the construction industry is similarly important.
Their contribution to the industry is clear and cannot be overlooked, especially when
considering the importance of the construction industry to most national economies.
In Sri Lanka, for example, the construction industry contributed almost eight per cent
of the gross domestic product (GDP) and was seventh among 13 major sectors
contributing to the country’s GDP (Chamber of Construction Industry Sri Lanka, 2012).
In South Africa, the GDP contribution to the construction industry in 2012 was almost
4 per cent (Industry Insight, 2012:17).
3
For most parts of the world, the construction industry is critical. In India, the
construction industry is the second-largest employer after agriculture. The industry
employs about 18 million people directly and 14 million people indirectly (IHG Global
Insight, 2009:7). In 2000 the Palestinian construction industry contributed 26 per cent
to its GDP (Mahamid, 2011:1).
Similarly, Abor and Quartey (2010:1) stated that the contribution of SMMEs in general
to the Ghanaian GDP was 70 per cent and it accounted for 92 per cent of business in
Ghana. The construction industry, which is predominantly made up of SMMEs,
contributes approximately 10 per cent to the GDP (Mhango, 2010:2). In summary, the
input of the construction industry to GDP of all countries is approximately 5 to 10 per
cent and it is a major employer of people with up to 10 per cent of the working
population and the holder of half of the gross fixed capital formations of all countries
(Ofori, 2012:5)
Despite the SMMEs importance within a very strategic industry, research has shown
that these SMMEs are very vulnerable, particularly at their start-up phase and are
expected to ‘die’ before their maturity period, even in developed countries (OECD,
2002:7). The OECD (2002) observed that the smallest firms hardly survive for longer
than five years in developed countries. In developing countries, the survival rate is
even lower. In Malaysia, for example, it is estimated that 10 per cent of start-up
businesses survive beyond the tenth year (Sin, 2010:14). Rwigema and Venter
(2004) reported that around 80 per cent of South African small businesses ‘die’ before
their fifth year.
Consequently, training programmes have been developed to assist with reversing the
trend. These training programmes have to some extent assisted the survival of
SMMEs in developed countries as “…formal training and development cuts, failure
rate by half in the UK – all other things being equal” (OECD, 2002:8). In South Africa,
government initiatives since independence have assisted in sustaining the existence
of SMMEs (Berry et al., 2002). The CIDB (2009: i) also reported that “…there are
several instances where contractors have increased their CIDB grading by three or
four grades during or subsequent to their participation in the CDPs”.
4
Having recognised the potential of SMME construction businesses to contribute to
national economies, it is worth noting that the various initiatives aimed at improving
contractors’ performance in South Africa seemed to have failed to ameliorate
contractors’ ability to run successful businesses owing to a lack of knowledge on key
aspects. Greyling (2012:43) lamented that most SMME contractors do not have
enough understanding of the basic contracts being used in the country. Coupled with
the lack of understanding of basic contracts, most SMME contractors lack the
knowledge of tendering and procurement (Makhura, 2011:65). It is argued that this
lack of knowledge on key aspects causes SMME contractors to forfeit an average of
7 per cent of their profit margin owing to wrong costing and pricing calculations
(Greyling, 2012:7). Furthermore, construction clients are generally dissatisfied with the
quality of work delivered by SMME contractors (Mbachu & Nkado, 2006; Smallwood,
2010:941). The CIDB (2011:4) reported that 10 per cent of the Department of Human
Settlement’s budget for 2009/10 was used to repair houses owing to poor quality of
work from SMME contractors. Eventually, non-performing SMME contractors end up
closing down their businesses.
There is extensive literature on the development and implementation of CDPs and
models in the country (CIDB, 2011:1–35; Dlungwana et al., 2002:1-8; Hauptfleisch et
al., 2007:1–13). Despite these studies, there appears to be little literature on how the
beneficiaries of these programmes perceive them. It is argued that any worthwhile
project must receive an evaluation by the beneficiary. It is therefore warranted that
research should be conducted to ascertain the perception of the beneficiary
contractors on whether the CDPs have assisted in improving contractors’
management skills, whether the CDPs have translated into an upgrade in CIDB
grading, whether the CDPs have ensured an increase in participation of companies
belonging to PDI and, finally, whether the beneficiaries are satisfied with the CDPs.
Therefore the objective of this research was to establish how beneficial contractors
rate the CDPs in which they have participated in South Africa with the aim of improving
these CDPs. The approach used in this study was aimed at finding out the extent to
which the participating contractors rate the CDPs relative to their intended goals.
Therefore the following procedure was adopted:
5
A literature review on CDPs in South Africa and internationally;
A questionnaire survey among beneficiary contractors to seek their views on
how they rated the CDPs;
Structured interviews conducted with beneficiary contractors and consultants
on the importance of CDPs and whether they have assisted in improving
contractors’ performance; and
Conclusions drawn on the findings of the questionnaire survey and structured
interviews.
Problem statement
Studies have shown that few assessments have been carried out on the effects of
CDPs in South Africa, and therefore considerable work remains to be done (CIDB,
2009). Therefore, the current study looks to investigate the extent to which the
contractor development programmes have helped in the improvement of contractors’
management skills, the extent to which the contractor development programmes have
ensured the registration status of contractors at the CIDB, the relationship between
contractors, the achievement of an increased participation of PDIs/organisations in
the construction industry and, finally, the way the beneficiaries rate the contractor
development programme.
RESEARCH QUESTIONS
Based on the above problem statement, the following research questions have been
defined for the study:
Research Question 1
What is the extent to which contractor development programmes have helped in the
improvement of contractors’ management skills?
Research Question 2
What is the extent to which contractor development programmes have ensured the
upgrade in CIDB registration status for contractors?
6
Research Question 3
What is the relationship between contractor development programmes and the
achievement of an increased participation of PDIs/organisations in the construction
industry?
Research Question 4
How do the beneficiaries of contractor development programmes rate these?
1.2 RESEARCH OBJECTIVE
The objective of the research was to investigate the effectiveness of Contractor
development programmes (CDPs) in general with a view to contributing to their
improvement.
1.3 OBJECTIVES
Objective 1
To investigate the extent to which contractor development programmes have helped
in improving contractors’ management skills
Objective 2
To investigate the extent to which contractor development programmes have ensured
contractors’ upgrade/upgrading in CIDB registration status
Objective 3
To examine the relationship between contractor development programmes and the
achievement of an increased participation of PDIs/organisations in the construction
industry.
Objective 4
To establish how beneficiaries of contractor development programmes rate these CDP
programmes.
7
1.4 BENEFIT OF THE STUDY
It has been shown that the construction industry is an important sector in a country’s
economy and that SMME contractors play a significant role in this sector. Therefore
there is a need to train and develop SMME contractors. In order to develop better
training programmes, there is also a need to evaluate the effectiveness of the current
programmes. The starting point is to establish from the beneficiaries of these training
programmes whether the development programmes are achieving their intended
purpose, and if not, what the best implementation method will be for the achievement
of results. This will assist in improving the current states of CDPs.
1.5 SCOPE OF THE RESEARCH
The study is in the form of a summative evaluation which focuses on contractors who
have undergone CDPs and successfully graduated or who are still undergoing the
CDP in Gauteng Province. Consultants’ opinions on the effectiveness of CDPs were
also solicited in order to arrive at a reasonable conclusion.
The premise is that the collected sample represents the view of contractors who have
undergone the various development programmes.
1.6 DELIMITATION OF THE STUDY
The study did not evaluate the structure and the curriculum of CDPs per se and it also
did not investigate how contractors are chosen to participate in these development
programmes. The study evaluated how beneficiary contractors viewed these CDPs
and suggests methods of improving the effectiveness of the CDPs.
1.7 STRUCTURE OF THE REPORT
The report has been structured and organised in chapters and sections as follows:
Chapter 1 - Introduction
This chapter introduces the study, states the importance of SMME construction
industries and explains why contractors must be trained. It also details the problem,
objectives and the benefit of the study.
8
Chapter 2 – Literature Review
This chapter looks at the historical background of CDP in sub-Saharan Africa in
general.
While Chapter 3 presents a review of literature on South Africa Specifically. This
chapter discusses the performance of CDP in South Africa. The conception of these
CDPs, their planning and design, their implementation models, international best
practices and gaps within these CDPs are identified and discussed.
Chapter 4 – Review of International Contractor Development Programmes. This
chapter reviews the CDPs of some third world countries.
Chapter 5 – Contractor Development Models
This chapter looks at selected contractor development models designed to assist with
the development of contractors in South Africa. The chapter compares the models and
examines the similarities and the common factors of the models. These similarities
and common factors were then compared with the literature reviewed on CDPs
internationally. A matrix was produced to assist with identifying the common elements
for better CDP implementation to achieve a better result.
Chapter 6 – Importance of CDPs in the Construction Industry
This chapter discusses the construction industry as a whole. The industry’s
contributions to national economies, the competencies required to run a construction
business and the factors constraining these competencies are presented in this
chapter. In addition, the concept and the benefits of training and development to both
individuals and organisations are also reviewed in this chapter.
Chapter 7 – Research Methodology
This chapter describes the design of the research and the method employed to
investigate the performance of CDPs in South Africa. In addition, it presents the
methods used to analyse and present the data.
9
Chapter 8 – Presentation of Results
Results from the survey are presented in this section. Chapter 8 builds on the research
methods and approaches discussed in Chapter 7 the data received from the survey
are analysed and the results are presented.
Chapter 9 – Discussion of the Results
The interpretation and an extensive discussion of the results are presented in Chapter
8. The findings on the key objectives of the study are therefore presented in this
chapter.
Chapter 10 – Summary, Conclusion and Recommendation
This final chapter concentrates on studying the role of this study regarding the body of
knowledge on CDPs. The aims and objectives of this research are revised. An outline
of each chapter is also presented, indicating how each chapter narrates the aims,
analysing and describing their contribution to the research.
1.8 CONCLUSION
In this chapter, the various components of the study are presented. The research
problem, rationale, research questions and the structure of the project are discussed.
It is against this background that an understanding of the present research was
attained. This chapter also emphasised the understanding of contractor development
programmes. The next chapter discusses the theory and literature on contractor
development programmes in the construction industry.
10
CHAPTER TWO
LITERATURE REVIEW: CONTRACTOR’S DEVELOPMENT PROGRAMMES
2.1 INTRODUCTION
Chapter 2 presents a review of literature on the CDPs that have been implemented
around the world and South Africa. An assessment of the framework of contractor
development programmes regarding their purposes, objectives and their patterns in
implementing nations is also conducted. The chapter further discusses the importance
of the building industry to the socioeconomic growth of nations, the part played by
SMME contractors in economic evolution, problems faced by these SMME contractors
and the reasons why they have to be prepared and be competitive. Literature on the
importance of mentorship and development to businesses is also presented in this
section.
2.2 HISTORY OF CONTRACTOR DEVELOPMENT PROGRAMMES
The current concept of contractor development, according to McCutcheon and Parkins
(2002:1), can be traced to 1969 when the ILO initiated the World Employment
Programme (WEP) in Geneva, with the primary aim being to test and define an
engagement-oriented growth strategy. According to Croswell and McCutcheon
(2001:2), this employment-oriented development transformed into small CDPs in sub-
Saharan Africa in the 1970s owing to the lack of local, indigenous contractors to
enforce the policy, and the overriding presence of large foreign contractors. There is
evidence of some success of small CDPs in some sub-Saharan countries such as
Ghana, Kenya, Lesotho and Malawi (Larcher, 1998; Ofori, 2002; Eyiah, 2004).
The background to the current CDPs in South Africa could/can, however, be traced
back to 1995 when the National Department of Public Works (NDPW) announced
programmes designed at supporting contracting businesses owned by the Previously
Disadvantaged Individuals (PDI.) These programmes were designed to develop
SMME’s technical and managerial skills so that they could be able to contend/compete
with reputable construction companies (NDPW, 2004:3).
11
Historically, most countries have developed their local contractors to withstand
challenges and adversities caused by foreign construction companies, and for South
Africa, the imbalances caused by historical events (Adams, 1997; Larcher, 1998;
Croswell & McCutcheon, 2001; Verwey & Havemann, 2001; McCutcheon, 2008; Ofori,
2012).
It should also be noted that the challenges facing SMME contractors in South Africa
are not only old/historical but are also related to current challenges such as
globalisation, demographic changes, the demand for green and sustainable buildings,
technical advancement and threats from emerging economies (Department for
Business, Innovation and Skills, (DBIS), 2013:7). Therefore it is prudent that all
contractor development stakeholders keep track of the changes and requirements of
the industry to enable them to keep abreast of all aspects of the sector.
CDPs are capable of influencing contractors’ human resource development, materials
development, engineering development, company growth, documentation
development, routines and working environment, institution building, and the evolution
of working surroundings (Ofori, 2012:8). Consequently, these development
programmes are essential and critical to growth.
2.3 CONTRACTOR DEVELOPMENT PROGRAMME FRAMEWORKS
As different nations design and carry out their own programmes based on what they
want to accomplish, and with fluctuating results emanating from these programmes
owing to several/diverse reasons stated by the CIDB (2011), there is a need for the
adoption of a set of minimum requirements for every CDP. According to the CIDB
(2011:8), the ILO made a proposal to improve the performance of CDPs in developing
countries. Such as pointed out by CIDB (2011) include the following:
Improving access to employment opportunities: Where tender procedures
and tender documentation are made simpler, projects are packaged into
smaller sizes for the contractors’ easy handling and encouraging sub-
contracting for smaller contractor sustainability.
12
Improving the business environment: Where requirements for providing
performance bonds and retention requirements, guaranteed loan schemes,
selected contractors’ access to mobilisation allowances, figures and financial
education for contractors and the right of contractors to use to materials and
equipment are relaxed for contractors’ development.
Offering training and advisory services: The development and
implementation of training systems that are fitting and suitable for contractors
and encouraging contractors on the significance of such training arrangements
(CIDB, 2011:8).
Aside from the ILO basis, the CIDB (2011:8) also suggests that the following best
practices must be included in the development programmes:
Promotion of recent technological applications and through combined research
on development and technology transferal methods of construction;
Promotion of uniform and value-added techniques of construction to improve
output and effectiveness; and
Facilitation of interactions and sub-contracting opportunities,
formation/maintenance of cordial associations with professionals within the
industry and the government, and facilitation of standardised design
specifications, details and documentation (CIDB, 2011:8).
2.3.1 Qualities of a successful contractor development programme
In this respect there are some qualities that good development programmes need to
exhibit to assure their efficacy. Such qualities, when properly incorporated into SMME
training programmes, are likely to ease most of the challenges confronted by the
contractors. As proposed by Van der Kuip and Verheul (2003), Martin (2004),
Dlungwana and Rwelamila (2004), Vanderstraeten and Matthyssens (2005), Ofori
(2006) and Storey (2008), such best practices may include what the CIDB (2011) has
recorded under the following two headings:
2.3.1.1 Programme organisation
An effective programme should have:
13
a political backing and that of senior management of the implementing
organisations;
appropriate objectives and dedication by the implementing organisations to
take on such objectives;
a defined and sufficient budget for its conception and execution;
sufficient management resources to drive its implementation;
a flexible model that houses the dynamic needs of contractors at changed
levels of advance, and encourages the implementation of industry Grade A
practices;
constant monitoring and reporting systems to track its achievements; and
a way to integrate all the development activities, and stakeholders from
government and the private sector (CIDB, 2011:11).
2.3.1.1 Contractor interventions
The other aspect has to do with contractor interventions. An effective development
programme should:
develop strategies for procurement and instruments to make available
continuous and lucrative work openings for contractors on the programme;
provide suitable and reassuring structures to assist contractors on contractual
issues such as provision of sureties and guarantees;
provide suitable contract management and quality assurance mentorship to the
contractors;
enable participating contractor’s easy admittance to funding, credit and working
capital;
develop a suitable technical capability, construction management and quality
control know-how to contractors through teaching and mentoring to enhance
their progress;
be able to facilitate right to use economical materials, plant and machinery;
afford graduates entrée to information and information technology (IT);
connect contractors to stakeholders’ expertise development programmes;
ensure transparent selection and registering of contractors;
14
access and identify individual contractors’ training and mentoring needs;
assess the performance and grade accordingly to monitor their development;
and
have clear milestones with the guidelines and method of entry and departure
points (CIDB, 2011:11).
In support of the above, Croswell and McCutcheon (2001:365-379) also observed that
successful CDP should have certain approaches which should include, inter alia:
continuity of contracting opportunities;
training and ongoing mentoring;
high level support; and
institutional support.
The authors further argue that a successful programme should be structured as a
series of consecutive contracts, during which the fundamentally-trained small
contractors are progressively mentored until they are able to act independently, that
is, having the entrepreneurial approach towards marketing for work and tendering
successfully to ensure their sustainability (Croswell & McCutcheon, 2001: 365–379).
2.3.2 Aims and objectives of contractor development programmes
Nations do not have the same aims for the design and execution of their development
courses. For example, Khan (2004:1) stated that the CDP of Brunei Darussalam was
aimed at entrepreneurship education and training to foster enterprise development.
On the other hand, according to Ofori (2012:10), Malaysia’s development programme
was aimed at evolving Malaysia’s construction sector into a world-class, advanced,
expert international resolution provider, whereas Singapore’s Construction 21 initiative
was aimed at increasing the output of the industry by upgrading its practices and
processes (Ofori, 2012:8).
The objectives of the development programme in Tanzania were different from that of
Singapore. The Contractors’ Registration Board (CRB) development programme in
Tanzania went after the closing of gap skills which existed between contracting firms
15
internationally and locally. In addition, the development programme was also designed
to improve the ability of local contractors so that they could perform at optimum levels
(Uriyo & Jere, 2003:1).
Therefore the CIDB (2011:4) recommends that CDPs should be developed and
implemented on the basis that contractors have different needs and are at different
stages in their life. Consequently, the CIDB recommend that the national framework
for CDPs requires programmes be developed along the following principles:
2.3.2.1 Construction workforce development
This aims at the training of CIDB contractors through artisan and supervisor
development. The programme targets the growth of companies within the CIDB
grading of 1 to 5 through leadership and other skills development of contractors. This
basically aims at the development of the construction workforce.
2.3.2.2 Contractor development
According to CIDB (2011:4), this should be targeted at the growth of the construction
organisation and comprises the following:
Emerging contractor development: The group targeted here are contractors
with CIDB grading 2 to 3 where contractors’ skills in the business side of
contracting are developed through mentorship and learnership programmes.
Examples of skills taught here include tendering, pricing, financial
management, marketing and contract administration.
Enterprise development: The aim of this programme is to assist contractors
to market themselves properly to prospective clients, to accumulate capital and
to be able to break into higher grades and different markets. The targeted
groups are Grade 3 to 6 contractors. The aim is to train contractors’ survival
strategies in a competitive bidding environment.
Performance improvement: Grade 4 to 7 contractors are the target for this
training. At this level, contractors are presumed to have completed the previous
training levels and are looking to introduce best practice management systems
16
such as quality management, health and safety, and environmental
management in order to improve their sustainability.
CDPs are planned and implemented in countries or localities with the intention of
eradicating or improving some particular circumstances. The CDPs in South Africa,
for example, were also developed to give effect to the affirmative action agenda.
Therefore the CDPs target firms owned and operated by women, the disabled, youth
and individuals who were previously unable to participate in the economy (CIDB,
2011:6).
2.3.3 Challenges of contractor development programmes
Just as with many other development programmes, the various contractor intervention
programmes have their own challenges. The challenges have been widely
documented (Dlungwana & Rwelamila, 2004; Ofori, 2006; Buys & Ludwaba, 2013).
The CIDB (2011) has summarised these challenges and listed them as including, inter
alia, the following:
Access is usually open to all interested participants, thus leading to difficulty in
selecting the appropriate entrants into a programme;
Lack of insistence on prior experience in the industry, and on prior technical,
managerial and construction related skills;
Inadequate training and difficulties in synchronising training to make it available
at times suitable for contractors and their workloads; in addition, the amount of
training required both for contractors and development agency staff is generally
underestimated;
Contractors with little understanding of the nature and complexity of
construction, and how to deal with rising risks;
Unequal access to finance, trade credits and guarantees;
Lack of construction-specific skills such as pricing, project management and
the programming of site activities, contract conditions, and risk management;
Reluctance to employ qualified personnel, normally due to fiscal restraints;
Compromising quality over speed and budgetary considerations;
17
Low profit margins in the industry, reducing the viability of small contractors
irrespective of intervention;
Lack of understanding or commitment on the part of the contractors to the
objectives of contractor development, and to improving their performance as
contractors;
Difficulty in creating a culture of entrepreneurship among contractors,
especially among survivalist firms;
Fluctuating industry workloads;
Institutional challenges, including limited training institutions and the dearth of
appropriate training materials, legal challenges to the selection and provision
of services to a select group, poor management, a lack of financing for the
programmes, and difficulty identifying deserving contractors; and
Lack of monitoring and valuation of the programmes and the use of
inappropriate metrics to measure success (such as the number of companies
trained and the quantity of credit disbursed) (CIDB, 2011:10-11).
The CDPs face many challenges and in many instances mentorship is sidelined.
2.4 MENTORSHIP IN CDPs
Mentorship is a vital element in professional development and it seems to be lacking
in a number of CDPs. Mentoring is a relationship between two people, namely a
mentor and the protégé. It is very complex and varies from one situation to another
(McKimm et al., 2007:1). Mentoring is also defined as a one-to-one relationship in
which an expert or a senior person voluntarily gives time to teach, support, and
encourage another (Inzer & Crawford; 2005:32). Mentorship has been identified as an
important factor in professional development in both the public and private sector (The
United States Office of Personnel Management [USOPM], 2008:2).
Mentoring is a protected relationship in which learning and experimentation occur
through analysis, examination, re-examination and reflection on practice, situations,
problems, mistakes and successes (of both the mentors and the mentees) to identify
learning opportunities and gaps (McKimm et al., 2007:5).
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Literature abounds with information regarding when mentoring and mentorship
actually started. McKimm et al. (2007:2) argue that informal mentorship can be traced
back to Greek mythology when Odysseus entrusted his son, Telemachus, to the
goddess, Athena, while he went on a ten-year journey. The goddess disguised herself
in human form as a mentor, an old friend of Odysseus whose function was to act as a
wise counsellor and helper to the youth. On the other hand, Douglas (1997) posits that
formal mentoring relationships were developed in the 1930s by the Jewel Tea
Company but did not grow significantly until the 1980s, when their rapid expansion
was fuelled by the attention given in the literature to the effectiveness of informal
mentoring relationships and to the growing body of work that supported the importance
of developmental relationships in career development (Douglas, 1997:75).
2.4.1 Components of mentoring in training and development
Mentoring has been identified as being a vital component of a successful training and
development programme. There are copious empirical studies regarding the
definitions and the importance of mentoring and mentorship. McKimm et al. (2007:1)
explain that a mentor is someone who helps another person through an important
transition such as coping with a new situation such as a new job or a major change in
personal circumstances such as in career development or personal growth. Inzer and
Crawford (2005:32) also point out that a mentor is someone who helps a protégé learn
something that he or she would have learnt less well, more slowly, or not at all if left
alone.
Mentoring has many benefits to individuals and organisations. Organisations choose
mentoring for their various benefits such as for career development and an increase
in an organisation’s productivity. The United States Office of Personnel Management
(2008:3) listed some of the reasons why organisations implement mentorship which
include, inter alia:
On boarding process – mentors help new recruits, trainees or graduates to
settle into the organisation;
Skills enhancement – mentoring enables experienced, highly competent staff
to pass their expertise on to others who need to acquire specified skills;
19
Professional identity – mentors play a role in defining professional behaviour
for new employees;
Career development – mentorship helps employees plan, develop and
manage their career;
Leadership and management development – mentoring encourages the
development of leadership competencies that are gained through examples,
guided practice or experience by education and training;
Education support – mentoring helps bridge the gap between theory and
practice. Formal education and training is complemented by the knowledge and
hands-on experience of a competent practitioner;
Organisational development and culture change – mentoring can help
communicate the values, vision and mission of the organisation; a one-to-one
relationship can help employees understand the organisational culture and
make any necessary changes;
Customer service – mentoring assists in modelling desired behaviours,
encouraging the development of competencies in support of customer service,
and above all, cultivating the right attitudes; and
Knowledge management/knowledge transfer – mentoring provides for the
interchange/exchange of information/knowledge among members of different
organisations.
The components of mentoring are the mentor, the protégé, the relationship, and the
atmosphere in which they operate (Inzer & Crawford; 2005:32). The atmosphere,
according to Inzer and Crawford (2005:32), could be the organisation, friendship or
family.
Since a mentor is defined as being an advice-giver, counsellor, confidant, promoter,
and listener, he or she must be self-assured, sensitive to diversity, and be a good
communicator (Inzer & Crawford, 2005:32). The mentor’s role includes, among others,
identifying the protégés’ career goals, providing guidance and career advice,
encouraging their career and personal development to the fullest, sharing own insights
into the organisation, providing ideas on happenings and information that would
benefit the protégé’s growth, commending pursuits that will develop specific areas in
20
the protegés’ professional advancement, and assisting employees by being a
reference and advocate (Inzer & Crawford, 2005:32; USOPM, 2008:3-5;
Douglas,1997).
There are mainly four types of mentors, according to the USOPM (2008:4):
Career guide – promotes development through career guidance, counselling
and visibility;
Information source – provides information about formal and informal
expectations;
Friend – interacts with the protégé socially and provides information about
people; and
Intellectual guide – promotes an equal relationship, collaborates on research
projects and provides constructive feedback and criticism.
Organisations’ and corporates’ planning mentoring programmes should therefore
consider the type of mentors to use with care.
The second part is the protégé, the mentee. The primary role of the protégé is to learn
new knowledge and skills from the mentor (Construction Manager in Training Program
(CMIT), 2010:7).The protégé must have knowledge of his or her needs. The protégé
must be in constant communication with the mentor. The mentee must develop priority
issues for action, must seek comment and come ready to each meeting to discuss
topics, and must not require the mentor to be knowledgeable in all areas (Inzer &
Crawford, 2005:34; CMIT; 2010:7).
The third aspect in mentoring is the relationship. This is the relationship between
mentor and protégé, and it must be a special relationship where two people make a
real connection with each other, in other words they form a bond (McKimm et al.,
2007:5). According to Inzer and Crawford (2005:34), there must be an understanding
between the mentor and protégé as sometimes the relationship may not always work
and the mentor must be happy in accepting the success of the protégé. If the
relationship between the protégé and the mentor is not working, it should be
terminated (Inzer & Crawford, 2005:34).
21
Apart from the relationship, mentorship also depends on the organisation. According
to Inzer and Crawford (2005:35), this is the atmosphere in which mentoring takes
place. The organisation must be an active participant, it should provide the necessary
resources and time required for the personnel to participate and it must develop
mentors and protégés through training and education (Inzer & Crawford, 2005:35).
Finally, the organisation must have the mentoring programme high on the priority list,
with sufficient resources and training, or not go into an official mentoring programme
(Inzer & Crawford, 2005:35).
2.4.2 Mentorship programmes
There are two main types of mentorship, namely informal and formal mentorship.
Informal mentoring is a natural component of relationships that occur throughout
society, in the workplace, in social, in professional and in family activities (Inzer &
Crawford, 2005:35). Informal mentoring occurs in a relationship between two people
where one gains insight, knowledge, wisdom, friendship, and support from the other.
It has minimal to no structure and oversight, may or may not have a clear and specific
goal and is normally for interpersonal enhancement, but can also promote career
development (USOPM, 2008:4).
On the other hand, formal mentoring programmes are more effective and structured
(Inzer & Crawford, 2005:35), have oversight, and have clear and specific
organisational goals (USOPM, 2008:4). According to the Workplace Gender Equality
Agency (WGEA) (2013:16), formal mentoring occurs when the relationship is
facilitated and supported by the organisation so that more participants can benefit.
2.4.3 Benefits of mentoring for the mentor and the protégé
There is much literature with evidence of the benefits of mentoring to an individual and
organisations. Douglas (1997) Inzer and Crawford (2005), McKimm et al. (2007) and
WGEA (2013) have all elaborated on the benefits of mentoring to mentors and
protégés and these benefits are as follows:
For a mentor, the benefits include the following:
Renewed enthusiasm for the role of expert;
22
Obtaining a greater understanding of the barriers experienced at lower levels
of the organisation;
Enhancement of skills in coaching, counselling, listening and modelling;
Developing and practising a more personal style of leadership;
Demonstrating expertise and sharing knowledge; and
Increased generational awareness (USOPM, 2008:4-5).
As for the protégé, the benefits include the following:
Making a smoother transition into the workforce;
Development as a professional;
Gaining the capacity to translate values and strategies into productive actions;
A complement to ongoing formal study and/or training and development
activities;
Gaining some career development opportunities;
Developing new and/or different perspectives;
Getting assistance with ideas;
Demonstrating strengths and exploring potential; and
Increasing career networks and receiving greater agency exposure (USOPM,
2008:4-5).
The above benefits summarise the benefits of mentoring to both the mentor and the
protégé.
2.4.4 Mentorship of a company
Companies and organisations require mentorship to develop their capabilities just as
individuals require mentorship for their career and psychosocial development. The
behaviour of a company or organisation’s manager is likely to make or break the
organisation. Therefore entrepreneurial mentorship is required to assist the
sustainability of SMMEs. Whereas most SMMEs are unaware of business
mentorships, the few that are aware do not use the services of business mentors
(Business, Innovation and Skills (BIS), 2013). Among the contributing issues to the
23
possibility of accomplishment to the businessperson are the period and concentration
devoted to activites, including the identification of mentors (Gartner et al., 1992).
Owing to the complexity and range of tasks required of entrepreneurs it is required
that they need entrepreneurs. Higly relevant to the personal development of
entrepreneurs is the need of an entrepreneur to enable them to become positive role
models, motivating their mentees to copy them (Pompa, 2012:8). Mazzarol et al.
(2006:2) describe business mentoring as the practice of providing a way in which
business difficulties are examined and deliberated so as to agree to an entrepreneur
coming up with plans to solve present and possible future issues. The role of a
business mentor is to help as a contemplative counsellor to the entrepreneur,
functioning with everyone on developmental matters related to their endeavour. For
that reason it is vital to differentiate the role of a business mentor from that of a
consultant. A consultant makes available a contracted service and uses his/her
expertise to find a solution to complex problems (Mazzarol et al., 2006:2).
There are different definitions of business mentorship. Gravells (2006) defines
corporate mentorship as a mentoring backing provided to owners of small businesses,
both at start-up and beyond, whereas Harrington (1999) defines business mentorship
as the connection that includes one entrepreneur performing as a guide, serving to
manage the career and development of a less experienced entrepreneur.
The development and management of business mentoring programmes are complex
issues that require careful planning. To ensure a successful mentoring programme, it
is important for both the mentors and the protégés to agree to the affiliation, have a
strong bond and get on at their interpersonal level (Pompa, 2012:8). It is also
imperative to match the protégé’s wishes with the abilities, know-how and expertise of
the mentor (Mazzarol et al., 2006:3).
Protégés should be given clear instructions on how to get the best from their mentors
and mentors need to be taught on how to best interact with their protégé (Mazzarol et
al., 2006:3); By so doing the expectations and cultural differences of persons
concerning the position of mentors and their roles can be managed. However, the
mentor–protégé relationship raises a number of legal issues. Foremostly, there are
24
simple principles of agency and fiduciary responsibility that need to be managed and
monitored, as well as the management of conflicts of interest. Secondly, there are
matters of commercial discretion. Lastly, there is the concern of professional obligation
and covers between the parties. These issues, according to Mazzarol et al. (2006:3),
are of importance to the mentor–protégé relationship as they often serve as potential
obstacles to the successful implementation of the mentoring programmes. For the
mentor–protégé relationship to yield the required results, the mentor is required to
possess particular skills and characteristics which Cunningham and Eberle (1993)
outline as the following:
Personal security and confidence;
Readiness to trust;
Capability to communicate;
Introspection and openness;
Ability to be innovative;
Patience and tolerance; and
Accessibility.
Pompa (2012:8) states that the mentor’s skill, know-how, knowledge of the protégé’s
exact situation, and his or her accessibility are vital to the accomplishment of the
mentoring relationship.
Despite the benefits, a number of potential mentees resist enrolling for mentorship
programmes. Some of the reasons include trusting that mentors’ advice is not concrete
enough, not tailor-made to the state, too expensive or given by people who are not
sufficiently well acquainted with small businesses (Pompa, 2012:8; BIS, 2013; CIDB,
2009). Therefore the mentor–protégé relationship can only succeed if the protégé
demonstrates some characteristics and skills as outlined by Cunningham and Eberle
(1993) as follows:
Having the craving to learn;
Being people-focused;
Being goal-oriented;
25
Having abstract ability;
Being contemplative;
Showing initiative; and
Being assertive.
To succeed, a protégé in a business mentorship should exhibit most of the
characteristics above.
There are some common problems associated with mentors and protégés. The
mentor’s weaknesses can include nonexistence of time, absence of training, a
professional mismatch of expertise/personality, the extra burden connected with
mentoring and frustration with the mentee, while the protégé’s glitches include
gender/race problems, negative attitude of the mentee, jealousy, and pressure from
work (Pompa, 2012:9).
Mazzarol et al. (2006:4) postulate that most existing mentoring programmes are too
firmly fixated on improving abilities and capabilities alongside acquiring accreditation
as the primary objectives, rather than addressing the necessities of the entrepreneur,
and that they lack flexibility and can be too ‘academic’ or technical in nature.
Entrepreneurs are not identical in their learning requirements and require a more
flexible programme reflecting both a yearning/desire for individual learning and direct
backing from mentoring. It is therefore important that the selection of owner-managers
into business mentoring programmes be based on an individual needs assessment
report.
Mazzarol et al. (2006:4) maintain that the business mentoring process falls into three
phases, namely (i) the diagnostic assessment phase – where an initial business
diagnostic is done to provide a valuation of the business and how it accomplishes
against established management standards; (ii) the individual mentoring phase –
where contributors are coordinated with a personal mentor who works with the owner-
manager over the duration of the programme and (iii) the educational support phase
– where in addition to the facilitated workshops, online learning support is provided
that allows the owner-manager to download information and upload assignments.
26
It was also observed by Mazzarol et al. (2006:3) that the key role for a business
mentoring programme was to assist entrepreneurs to chart a course through the
investment linkage and widen their strategic networks while developing business
competencies.
According to Mazzarol et al. (2006:3), mentoring has been successful in some
countries to improve advance centres and to expedite the growth of new start-up
projects and the development of technology incubators. Thierstein and Wilhelm (2001)
observed that about 90 per cent of Swiss incubator, technology and invention centres
are offering mentoring services using either in-house or out-sourced services. In the
United States many former high-growth businesspersons who have now attained
success are offering their knowledge to ‘rookie’ and promising entrepreneurs through
a series of non-profit and for-profit mentoring services businesses (Mazzarol et al.
2006:4). A successful mentoring process should therefore include both formal and
informal processes in conjunction with education of the entrepreneur (Leonard &
Swap, 2000; Colman, 2002).
Great benefits of business or entrepreneurial mentorship processes and programmes
are recorded in the literature (Mazzarol et al. 2006; Pompa, 2012; BIS 2013). The
benefits can be divided into benefits to the protégé or entrepreneur and benefits to the
business. The benefits of business mentoring for the entrepreneur or protégé include,
among others, better performance and productivity; value-added knowledge and skills;
greater confidence, empowerment and well-being; job satisfaction improvement and
motivation; quicker learning and decision-making skills improvement; enhanced
understanding of the business; creativity and innovation improvement; positive risk-
taking encouragement; and development of leadership abilities. The benefits to the
enterprise or business consist of, among others, partnerships facilitation, change and
innovation, solving problems and better project management (Pompa, 2012:9;
Mazzarol et al., 2006; BIS, 2013).
The literature shows that time seems to be one of the key components that stands
between the success and failure of the mentor–protégé relationship.
Protégés/mentees have often requested more time to be with the mentors (Douglas,
27
1997; Inzer & Crawford, 2005; Mazzarol et al., 2006; McKimm et al., 2007; Pompa,
2012; BIS, 2013). Mazzarol et al. (2006:9) observed in their study that only one
respondent strongly agreed they had more than sufficient time with their mentor on an
individual basis. The bulk of the supporting remarks related to the need for additional
mentoring time and most of the protégés indicated their willingness to pay for
additional time with the mentors.
2.4.4.1 Section summary
The concept of CDP had its origins around 1969 when the ILO initiated WEP. WEP
then transformed into small CDPs in sub-Saharan Africa in the 1970s owing to the lack
of local, indigenous contractors to enforce the policy and the overriding presence of
large foreign contractors (Croswell & McCutcheon, 2001). The small CDPs have been
successful in some sub-Saharan countries such as Ghana, Kenya, Lesotho and
Malawi (Larcher, 1998; Ofori, 2002; Eyiah, 2004). Based on the small CDPs, in 1995
the NDPW of South Africa announced programmes intended at supporting contracting
organisations owned by PDIs to improve their technical and managerial skills and
allow them to compete with well-known construction organisations (NDPW, 2004:3).
There are some challenges facing the successful implementation of contractor
development which include, inter alia, a lack of mentoring after graduation, a lack of
resolve on preceding experience in the industry, and contractors with little or no
understanding of the nature and complexity of construction industry or how to deal
with rising risks.
However, the success of every CDP has to be based on some best practice such as
continuity of contracting opportunities, training and ongoing mentoring with a high level
and institutional support (Croswell & McCutcheon, 2001:365–379). Mentorship has
been found to be very important in the quest for value addition to better CDPs.
However, studies indicate that mentorship should be continuous until the protégé is
able to perform independently, as opposed to once-off mentorship programmes.
28
2.5 CONCLUSION
This chapter presented an overview of of literature on CDPs around the world. An
assessment of the framework of contractor development programmes regarding their
purposes, objectives and their patterns of implementions was also discussed. The
chapter further commented on the importance of the building industry to the
socioeconomic growth of nations, the part played by SMME contractors in economic
evolution, problems faced by these SMME contractors and the reasons why they have
to be prepared and be competitive. Literature on the importance of mentorship and
development to businesses was also presented in this section.
29
CHAPTER THREE
CONTRACTOR DEVELOPMENT PROGRAMMES – SOUTH AFRICAN PERSPECTIVE
3.1 INTRODUCTION
This section of the dissertation reviews CDPs in South Africa, focusing on their
legislative backing, their intents and objectives.
3.2 Legislative backing of CDPs in South Africa
The South African CDPs are designed and implemented with the backing of legislation
and policy which support the principles of preferential procurement, supporting SMME
businesses and reserving work for contractor development. The legislation includes
the National Small Business Act No. 102 of 1996; the Skills Development Act No. 97
of 1998; the Public Finance Management Act No. 1 of 1999 as amended; the
Preferential Procurement Policy Framework Act No. 5 of 2000; and the CIDB Act No.
38 of 2000. Policy documents include the Black Economic Empowerment Policy; the
Construction Sector Broad Based Black Economic Empowerment Charter, 2003; the
Procurement Risk Management Policy 2003; South Africa’s Economic Strategy for
Broad Based Black Economic Empowerment, March 2003 and Breaking New Ground
on Housing Delivery: A Comprehensive Plan for Creation of Sustainable Human
Settlements, 2004 (CIDB, 2011:15–16).
The legislation, according to the CIDB (2011), came into being as the result of a
constitutional requirement as set out in section 217 (1–3) of the Constitution of the
Republic of South Africa, 1996 (Act No. 108 of 1996), which requires that contracts for
goods and services entered into by every state, provincial and local government organ
be conducted in a system which is fair, just, transparent, competitive and cost-
effective. The Constitution does not prohibit the organs of state or institutions referred
to in the above sub-section from implementing a procurement policy providing for (a)
categories of preference in the allocation of contracts; and (b) the protection or
advancement of persons, or categories of persons, disadvantaged by unfair
discrimination. It also sets aside the framework within which the policies mentioned
30
above may be implemented in compliance with the national legislation (CIDB,
2011:15–16).
3.2.1 Emerging contractor development programmes (ECDPs)
The ECDP was initiated by the Department of Public Works (DPW) as one of its
pioneering programmes based on some of the legislation mentioned above with the
intention of promoting emerging contractors in the building industry (DPW, 2004:2).
Increasing the penetration of firms owned and managed by PDIs into the construction
industry was the primary aim of the ECDP. The focal point of the training was therefore
on contractors transacting business of up to R500, 000 on the CIDB grading as shown
in Table 3.1.
The ECDP was designed to target the business side of construction which, according
to the DPW (2004:2), includes tendering for work, pricing, human resource
management, financial management, marketing and contract administration.
According to the report by the DPW (2004), most programmes at their inception phase
of the ECDP had shortfalls such as an inappropriate organisational structure, a lack of
staff capacity and the lack of effective and efficient management systems. There was
a failure to guarantee effective performance, satisfactory control and incorporation into
sub-systems as a consequence of these weaknesses (DPW, 2004:2).
It was also found that the programmes did not perform as expected in rural areas,
such as the inability of the ECDP to record field information that related to contractors’
vital details, training received and progress of contractors (DPW, 3004:2).
As a consequence of the abovementioned issues, and considering the impact of
sustaining contractors versus the high monetary value of contractor development
under ECDP, the conclusion was that the ECDP was not a viable programme. A
contractor incubator programme was therefore proposed (DPW, 2004).
3.2.2 Contractor incubator programmes
Considering that the bulk of public works projects were in the region of R1.5 million to
R5 million on the CIDB grading (Table 3.1) and that many contractors were stuck at
31
the R2 million to R5 million levels, the incubation programme was therefore directed
at encouraging the growth of construction enterprises owned and controlled by
historically disadvantaged individuals (HDIs) and contractors who come within the
R1.5 million to R5 million cost range (DPW, 2004:3).
According to the DPW (2004:3), the incubator programme was geared at “…creating
an enabling environment within which selected existing contracting enterprises could
grow into sustainable contracting enterprises”. An enabling environment was
supposed to include regular access to contracting opportunities, with values ranging
from R1.5 million to R30 million and provide measures for the support of these growing
enterprises (DPW, 2004:3). This objective was to be achieved through:
regular access to openings to assure sustainability;
supply-side actions underpinned by an enterprise development programme
including mentorship, training, finance and data; and
an enabling atmosphere, specifically uniform and standard procurement,
contract documentation, and swift payment (NPWD, 2008).
Aspiring participants of the CIP were expected to abide by the following entry
requirements:
having a CIDB grading designation of between 3 to 7;
having a certain training in construction;
having skilled staff employed in the company; and
being owned by blacks, women, youth and people living with disabilities
(NPWD, 2008:6).
The envisaged outcome of the CIP as stated by the NPWD (2008:7) was to enable
contracting entities belonging to PDIs having knowledge and the ability to embrace
financial expertise, human and material resources to complete a construction project.
It was also envisaged that on completion of the CIP contractors would improve their
managerial and commercial abilities in the industry.
32
According to the NDPW Contractor Incubator Programme overview report (2008:22),
the CIP achieved some successes, such as the selection of the right project team,
selection of suitable contractors and contracts, and communication and acceptance
by various stakeholders. The report states that the programme was monitored and
evaluated, that people employed in the programme understood their responsibilities
and there was an integrated approach, unlike the ECDP.
However, despite the successes, it has been noted that there are some shortfalls
relative to the CIP. These shortfalls include the following:
Mismatch between suitability of contractors and accessibility to contracts;
Contractors dropping out beforehand completing the programme; and
Unsuitable sustainability indicators (NPWD, 2008:21).
Most of the CDPs implemented by the national, provincial and local stakeholders were
designed and carried out along the principles of ECDP.
33
Table 3.1: Requirement in relation to contractor grading designation
Financial capability Track record for the past 2 years Minimum current
financial capability
Code Maximum value of
contracts that a
contractor is considered
capable of performing
(upper limit of bid value
range)
Minimum average
annual turnover
At least one
contract with a
value greater
than
Employable capital
(EC) of at least (next
asset value x bank
rating factor) +
financial
sponsorship
1 (#) R200,000.00 R0.00 R0.00 R0.00
2 (#) R500,000.00 R0.00 R80,000.00 R0.00
3 (*) R1,500,000.00 R780,000.00 R260,000.00 R0.00
4 (*) R3,000,000.00 R2,400,000.00 R800,000.00 R600,000.00
5 (*) R5,000,000.00 R4,800,000.00 R1,600,000.00 R1,200,000.00
6 (*) R10,000,000.00 R9,000,000.00 R3,000,000.00 R2,250,000.00
7 (*) R30,000,000.00 R24,000,000.00 R8,000,000.00 R6,000,000.00
8 R100,000,000.00 R78,000,000.00 R26,000,000.00 R19,500,000.00
9 "No Limit" R240,000,000.00 R80,000,000.00 R60,000,000.00
(#) These contracting enterprises are the targets for training under ECDP.
(*) These contracting enterprises are the targets for training under CIP.
Source: Adapted from DPW Contractor Incubation Programme Management Plan,
2004
34
3.2.3 Eskom Construction Academy
Eskom started the training academy in order to address the shortage of qualified
contractors skilled in electrical infrastructure, line construction and the management
of wayleaves and servitudes in both rural and urban areas. The aim was to train
contractors by developing their skills, help create jobs and alleviate poverty in
communities, and, in so doing, empower the contractors to deliver projects to meet
international standards and Eskom’s requirement for the optimisation of their
infrastructural network (CIDB, 2009).
The cardinal aims of the Eskom Contractor Academy were to:
develop the required business and construction management competencies
within proprietors; and
uplift and build ability in the technical skills of personnel (CIDB, 2009:28).
In addition, the Eskom Contractor Academy was to enable a vertical movement of its
employees and a horizontal movement into other contracting environments by training
sufficient and competent, skilled employees and also equipping contractors to deliver
projects to Eskom’s satisfaction (CIDB, 2009:28).
According to CIDB (2009), the entrants to the Eskom Contractor Academy were
selected from a group of contractors already contracted to Eskom or registered on
Eskom’s vendor list as future contractors. These contractors were vetted according to
their performance in past or current projects and their aptitude to pass other entrance
benchmarks set by Eskom.
Eskom, in partnership with Edupark, set up and ran an eight-month training course
registered under the Energy Sector Education and Training Authority (Eskom, 2011).
The training was modelled to have two phases, namely the classroom phase, where
contractors would have to attend one week per month of classroom study and and the
other phase would involve 26 weeks of fieldwork.
The study module for the classroom study comprises business management, financial
management, supply chain management, project management, people management,
35
safety, health, environment and quality (SHEQ) and the new engineering contract
(NEC). The NEC was selected by ESKOM for training because it is the form of
agreement commonly used by the electrical utility company.
The fieldwork training includes a course in medium-voltage line construction, SHEQ,
pole mount transformers, low voltage (LV) line construction, schools and clinics, pre-
paid metering, LV live work, supervision of work and LV operation (CIDB, 2009; Eskom
2011).
The training is delivered by accredited training providers and it is ranked on the
National Qualification Framework (NQF) as level 4 training. Trainees are required to
achieve 50 per cent or more in both the theory and the practical training before they
are allowed to graduate. The University of Limpopo awards certificates to successful
graduates (CIDB, 2009; Eskom 2011). The goal of the training, according to the CIDB
(2009), is to develop contractors’ competences so that they are able to effectively
manage and sustain their businesses, competently participate in the open market, and
to be competent to upgrade their CIDB grading.
Eskom (2011) claims that the programme has achieved a 97 per cent success rate
since its commencement in 2008 because 167 trainees out of the 173 who have
participated in the programme have successfully graduated. It was further stated that
52 out of the 167 graduates who were business owners were black women.
3.2.4 Vuk’uphile Learnership Programme
The NDPW initiated the Vuk’uphile Contractor Learnership Programme as part of the
Expanded Public Works Programme (EPWP) which was aimed at building capacity
among emerging contractors. By so doing, the EPWP achieved three goals, namely
a) executing work using the emerging contractors, b) increasing the amount of labour-
intensive work and c) providing employment and skills development opportunities for
the unemployed in the country.(CIDB; 2011b:63; EPWP, 2008).
Therefore, the intention of the Vuk’uphile Contractor Learnership Programme was to
build sustainable, empowered and independent contractors expert in labour-intensive
ways that would contribute towards unemployment reduction.
36
The Vuk’uphile Contractor Learnership Programme was therefore geared towards
developing the following entrepreneurial, business and technical skills:
Training contractors at NQF level 4 (254 credits) and site supervisors at NQF
level 4 (218 credits);
Capacity to contract in labour-intensive works sector to support EPWP;
Project sourcing and marketing;
The trainees also benefit from the programme by obtaining the following:
Accepted qualifications;
A project track record;
A financial track record;
A recognised relationship with a financial body; and
An improvement in their CIDB Grading (CIDB, 2011b:63).
The CIDB (2011:64) noted that applicants to the Vuk’uphile Contractor Learnership
Programme are required to possess some prerequisite qualifications such as having
completed at least a Grade 10, having some experience in construction and being
capable of executing contracts of up to R2.5 million. Selection to the Vuk’uphile
Contractor Learnership Programme is targeted at contractors with a CIDB grading
designation of 1 to 4. In addition, the programme targets attracting 80 per cent of HDIs,
50 per cent women and 50 per cent youth in the programme (CIDB, 2011b:64; EPWP,
2008).
The minimum duration required to complete the training is 30 months (CIDB 2011b:64-
65). During this period the contracting entities are assisted in the following ways:
Training: Contractors go through NQF-related teaching at levels 2 to 4 on
applying labour-intensive construction methods of work. The participants are
the learner contractor and learner supervisors such as site managers and site
foremen from the contracting entity to enhance their practical experience.
Mentoring: The mentors are liable for counselling and guiding the students in
the improvement and the management of their businesses and construction
37
competency. Their responsibilities include the opening assessments in the
training curriculum and deciding the areas where the learner contractors require
improvement. The ratio of mentors to contractors on the programme is pegged
at 1 to 10. In certain instances mentors are also co-signatories to the learners’
bank accounts so that accountability of funds is ensured.
Projects: On graduating from the training programme, the implementing body,
as part of its responsibilities under EPWP, provides the graduate contractors
with suitably sized projects so that practical experience can be attained onsite
training. The projects should be appropriate for labour-intensive construction
and favoured points are notched for training in labour-intensive construction.
Financial assistance: Banks and other financial institutions provide
admittance to credit and financial assistance to the graduate contractors. The
trainees benefit from the programme in that collateral is not required for any
financial assistance during the training period; however, the contracting entities
would have to include their mentors as signatories to their bank financial
records (EPWP, 2008).
The number of graduates from the Vuk’uphile Contractor Learnership Programme
could not be established during the current study and therefore it is difficult to establish
how many have benefited from the programme nationally. The Vukuzakhe Contractor
Development Programme was initiated by the KwaZulu-Natal Department of Transport
(KZNDoT), with the objective of transforming and empowering construction companies
involved in the construction of road infrastructure. The historically disadvantaged
individuals (HDIs) also benefitted from the Vukuzakhe CDP when it was first piloted in
1994 as part of the Roads for Rural Development Programme. The programme policy
was revised in 2002 to ensure sustainability of firms and also to capacitate firms
belonging to women, youth and people living with disabilities so that they could be able
to compete with other companies in the infrastructure boom market that was expected
in advance of the 2010 FIFA Soccer World Cup (CIDB, 2011b).
Therefore the Vukuzakhe policy, according to the CIDB (2011b:16), was to create an
effective programme which would transform the road construction and the building
construction sectors in general by creating an enabling environment such as the
38
availability of procurement opportunities and guaranteeing that Vukuzakhe contractors
had technical, management and financial support to execute projects successfully.
Aspiring applicants to the Vukuzakhe programme are interviewed by the department
officials to ascertain contractors’ skill levels in order to ensure that the construction
entity is genuine and that the entity meets the objectives of the programme (Civil
Designer, 2012).
Under the programme, contractors with a CIDB classification of 1 are permitted to take
part in all contracts of worth not exceeding R200, 000.00. However, entities requiring
entrance to the Vukuzakhe Development Programme and possessing a CIDB
contractors’ grading designation of 2 and above are required to comply with the
following:
1. The capability of the contractor in a particular CIDB rating designation;
2. CIDB Registration (mandatory);
3. Registration in the Vukuzakhe Database;
4. Valid Tax Clearance Certificate;
5. Provincial Treasury Supplier Database registration;
6. 100 per cent HDI-owned companies;
7. Registration for Value Added Tax with the South African Revenue Service;
and
8. Management actively involved in the operations of the contractor.
Vukuzakhe contractors are only permitted to go enter the programme at Grades 1 to
3 and registrations are not accepted from contractors who are in Grade 4 or above as
they are deemed to be necessarily established in terms of the programme aims and
objectives (CIDB, 2011b:17).
The CIDB (2011b:19–23) explains that most of the work of Vukuzakhe programme is
coordinated at the Enterprise Development directorate at the head office of KZNDoT
and aided by the Departmental Project Managers from the several regional offices.
The KZNDoT encourages participating contractors to form associations and
participate in these associations through which they can communicate and share ideas
39
regularly among themselves and the Department. The KZNDoT also affiliated their bid
procurement documentation with the CIDB’s standard for uniformity in construction
procurement documentation. Furthermore, consultants are appointed with the view of
supporting contractors’ development.
Vukuzakhe training was envisioned to be delivered in both classroom work and
fieldwork by accredited training providers with financial support coming from KZNDoT
departmental support and other institutions such as the Construction Education and
Training Authority (CETA), the Provincial Treasury SMME Fund, the Department of
Labour, the South Africa National Roads Agency Limited, the South Africa Federation
of Building and Civil Engineering Contractors (SAFCEC), municipalities and the EPWP
Unit of the Department (CIDB, 2011:20). The training programme includes mentorship,
contract management, financial, business management and organisational
development (CIDB, 2011b:20).
Projects are awarded to participating contractors for their training and development.
Contractors in the CIDB grade 2 to 6 are allowed to undertake more than one
development programme at a time, based on their performance on current projects
and their risk profile. On the other hand, contractors in the CIDB grade 1 are only
allowed to undertake one development project at a time (CIDB, 2011b:20).
Contractors with CIDB grading 1 to 3 are limited to tendering for projects within their
designated grading while contractors with the CIDB grades 4 to 6 are not limited to
tendering above their designated grade, but once below their grade, they are not
allowed to tender for jobs. However, joint ventures are encouraged so that there is
skills transfer and therefore the development and transformation goals are achieved.
The joint venture split between the contracting entities was set at 60 per cent for the
entity with the higher grade and 40 per cent for the entity with the lower grade (CIDB,
2011b:21).
One of the incentives built into the development programme is the payment frequency.
Cash flow is a critical element, especially with the emerging contractors. Therefore the
KZNDoT adopted a twice-monthly payment system to contractors for their work done
with the first payment being on the 15th and the second being on the last working day
40
of every month, provided that contractors’ invoices bear no discrepancies (CIDB,
2011b:21).
Thorough financial and technical vetting of contractors is done to ascertain their ability
to complete projects to the required quality, within a set budget and on the allotted
time. This strategy was adopted because the Department carries the risk for the
waived sureties for the work. However, the Department does not set aside the
guarantees for additional work and also reserves the right to withdraw contract
management support systems already offered on any other concurrent projects
awarded in the instance where a participating contractor decides to undertake more
than two projects at a time (CIDB, 2011b:22). The CIDB (2011b) asserts that this is to
encourage contractors to concentrate on the work at hand in order to enhance their
training and mentorship which is the main goal of the Vukuzakhe programme.
According to the CIDB (2011b:19), it is essential that all Vukuzakhe contractors are
registered on the CIDB list of contractors in the relevant grading designation and the
suitable class of works. The progress criteria of the programme are based on the CIDB
upgrading requirements. Contractors are allowed to upgrade from one grade of
Vukuzakhe programme to the next grade if that contractor has successfully applied for
and has been granted an upgrade with the CIDB.
According to the CIDB (2011b:19), contractors may depart from the programme under
the following circumstances:
Being unable to secure tender opportunities in two years;
A written request from the contractor concerned to be removed from the
programme; or
The ability of the contractor to meet the competency criteria for a grade
7 and is deemed to be self-sustaining.
The contractor progress, according to the CIDB (2011b:24), is measured in terms of
the contractor being able to:
source work from client bodies in general;
41
complete projects within time, to the specified quality standards and
within the cost parameters;
comply with training and skills development goals;
comply with the health and safety specifications;
comply with the environmental specifications; and
comply with best practice standards, such as payment of subcontractors
and contract documentation between main contractor and
subcontractors.
3.2.5 Masakhe Emerging Contractor Development Programme
The Masakhe ECD was initiated and operated under the jurisdiction of the KwaZulu-
Natal Department of Public Works (KZN DPW) in accordance with the Construction
Sector Transformation Charter and with the aim of capacitating emerging HDI
contractors so that they are able to excel in the open market (CIDB, 2009). The
contracting entities targeted for training under the Masakhe ECDP were those with
CIDB grading designations of 1 to 5.
According to the Masakhe handbook (n. d.), the objective of the programme is to:
a) create an enabling environment through which the emerging
contractors can flourish and have access to:
markets (DPW KZN contracts);
financial support;
training and mentoring; and
skills transfer.
b) Create an emerging contractor development system which would
provide for:
basic business management and technical training;
implementing targeted procurement interventions;
ongoing technical support through a mentorship plan;
linkages with financial institutions or funding agencies for
appropriate financing products; and
42
ongoing monitoring and evaluation of participating contractors.
c) Establish a credible database of emerging contractors, which will
encompass:
a screening mechanism for profiling HDI status and technical
competence;
a profile verification mechanism;
a performance monitoring and evaluation mechanism; and
adequate elevation of participating contractors through the CIDB-
linked grading system (Masakhe Handbook, n. d.).
In order to qualify for the Masakhe ECDP, aspiring trainees should meet the following
requirements:
The owner must be actively involved in his or her business and its
management;
The contractor must be CIDB registered;
The contractor must be registered with the KZN provincial suppliers’
database;
A CIDB Grade 1 contractor must undergo compulsory basic training with
the Department;
HDI equity ownership should be more than 50 per cent.
The contractor must supply any other documentary proof that may be
requested (Masakhe Handbook, n. d.)
The programme is administered by the Project Management Unit (PMU) of the DPW.
According to theCIDB (2009:18), the PMU is made up of a contractor development
directorate situated at the KZN DPW head office. The directorate has been divided
into regional blocks where the actual contractor training is undertaken. These regional
offices are manned by programme managers, project leaders, mentors, consultants
and other stakeholders such as theCIDB and CETA (CIDB, 2009:18).
The KZN DPW sets aside projects valued between R1 million to R5 million for the
implementation of the Masakhe ECDP. Prospective trainees tender for these projects
43
and the contracts are procured by the following historically disadvantaged individuals
(HDIs):
Women: 40%
Youth: 20%
Priority population group: 35%
Physically disabled: 5%
(CIDB, 2009: 18).
Contractors are trained under the following two main curricula:
Training and development, which entails training in business
management, business administration, tendering, project costing,
construction management, and onsite technical support; and
Financial support, which includes an introduction of ECDP contractor
funding products through traditional and government funding agencies,
establishing relationships between contractors and such funding
agencies, and introduction to a performance guarantee waivers principle
in lieu of contract retentions.
Contractors who have successfully completed their projects on time, within budget, to
high quality and who exhibit the acquisition of business and technical skills are
considered competent to progress to the next stage of the programme. Contractors
who have acquired CIDB grading designations 4 and 5 are encouraged to involve
contractors with lower CIDB grades during the construction phase of project
implementation (CIDB, 2009: 18). However, records to demonstrate the success of
the Masakhe programme are not available and this makes it difficult to conclude on its
performance.
3.2.6 Small Enterprise Development Agency – Construction Incubator (SCI) Programme
The Small Enterprise Development Agency (SEDA) construction incubator (SCI)
programme was well-known in 2005 and is a programme whereby government funds
44
contractor development. The main aim was to improve emergent contractors through
a mixture of practical and business administration expertise incorporating the usage
of technology in order to add to the management effectiveness of their businesses. It
is under the banner of a ring-fenced incubator programme called the Small Enterprise
Development Agency (SEDA) Technology Programme (CIDB, 2011b:27).
The CIDB (2011b:27) noted that the SCI was envisaged to be the forerunner in the
contractor development initiatives to produce competitive construction SMMEs
through the setting up of innovative sustenance involvements. In order to realise this,
the programme’s objective was to increase the capacity of construction SMMEs
through an organised mixture of business, technical and technology involvements
leading to sustainable businesses, substantial job creation and also helping to
contribute positively to the South African economy (CIDB, 2009; 2011b).
In addition to wanting to create a high level of professionalism and formality in the
industry, the SCI includes providing:
contractors with the required support to become successful and run
sustainable businesses which are able to compete in the open market;
business technology incubation services to SMME contractors; and
acceptable technical training, coaching and mentoring to assist
contributing contractors to effectively complete their projects –
contractors are evaluated in the skills to complete the jobs that they have
won through their own undertakings (CIDB, 2011b:28).
The SCI programme is designed for contractors registered in grades 3 to 6 of the CIDB
grading category and who have legally registered their businesses with the registrar
of companies, have a business plan and meet the entry requirements. However, some
of the training centres do cater for the start-up contractors with a grading of 1 to 2
(CIDB, 2011b:28).
In addition, contractors are eligible for the training programme if they are registered
and are active on the CIDB register of contractors (CIDB, 2011b:29). Other listed entry
requirements to the SCI programme include having:
45
a copy of income tax registration;
a certificate of tax clearance ;
acopy of establishment registration document;
A copy of identity documents of all stock holders;
A business plan that clearly demonstrates a company’s future plans;
curricula vitae of all the owners and senior management;
most recent signed annual financial statements;
up-to-date management accounts; and
a letter of motivation provided by the applicant on why he or she wishes
to join the SEDA construction incubator and its benefit to the company.
One of the main interventions the SCI provides is mentorship to willing contractors. A
skills audit is conducted by the SCI in order to determine the skills’ gap and then a
plan is developed to develop those skills. Contractors are also encouraged and
assisted to approach financial institutions for financial assistance (CIDB, 2011b:30).
This mentorship programme is undertaken at a cost agreed between the client bodies
and the mentor.
The SCI also offers assistance to selected SMME contractors for a period of three
years, within which period the participating contractors are expected to improve by a
minimum of one financial level above their entry level on the CIDB register of
contractors and function with little or no support in the open market. The programme
was planned around particular practices that can be found in any construction
enterprise. CIDB (2011b:27) outlines some of them as being the following:
Tender stage: assist contractors to charge tenders correctly with profit
margins factoring in all expenditures;
Pre-construction: help the contractor in organising for the occupation of
the site;
Construction management: make sure the right and expert management
and administration of projects; and
46
Site supervision: facilitate the communication with the site foreman,
consultants and all role players in the construction route, while permitting
the contractor’s management team a certain amount of autonomy.
Contractors are supported under the SCI in both administrative and technical issues.
The administrative assistance includes the provision of infrastructure and compliance
with all statutory regulations. Technical assistance includes (i) tender phase support
which entails assistance in pricing and completing of the tender, estimating, advice on
whether to tender or not; and (ii) construction phase support which includes assistance
with scheduling, cash flow projection, contractual claims, valuations, compliance with
occupational health and safety regulations, compliance with environmental
requirements, and all other contractual issues.
The SCI has a 240 evaluation point system which is used to appraise contractors’
performance. This evaluation scheme is linked to the training modules in order to make
certain that contractors have assimilated what they have been taught and are
implementing such knowledge on site (CIDB, 2011b:29).
Records show that there has been some measure of success with the programme.
According to the CIDB (2011b:27), a total of 63 contracting entities were supported by
the programme within two years of its inception in 2007.
3.2.7 Khuthaza Contractor Development
Khuthaza was set up to offer professional development programmes targeted at
women who were setting up or running construction companies (Khuthaza, 2012). The
programmes included training offered partly by CETA-accredited training providers.
Khuthaza’s goal was to offer a number of training programmes which are creative,
interesting, dynamic, challenging and rewarding (Khuthaza, 2012).
Khuthaza’s CDP offers technical skills training in the following components:
a) Excavation (exploration)
47
The excavation programme was directed at individuals who were exploring the
construction industry and considering the idea of setting up a construction business.
Through the Excavation programme Khuthaza assisted people to decide whether
construction was truly the industry for them and to help them consider the demands
of running their own company. This programme, according to Khuthaza (2012:10),
assisted new entrants to do market research before commencing a business. In this
programme activities are available available to anyone throughout the year. These are
usually day-long technical and classroom-based workshops.
b) Cornerstone (entry level)
At this level, Khuthaza created a medium through which programme partakers were
taken through a foundation of knowledge and skills was built. This course, according
to Khuthaza (2012:10), was intended for those individuals who were in the initial
stages of the setting up of their construction businesses. The programme is a
certificate programme lasting for the period of eight months. The certificate programme
combines aspects of the development of professional, personal, business and
technical skills.
c) Connection (intermediate level)
The connection programme is a medium in which programme partakers are able to
develop their current knowledge and skills. The programme also makes admittance to
industry players available for participants as well as openings with the established
sector. Through this programme Khuthaza aims to provide applicants with skills,
experience, networks and knowledge that will assist them to better the efficient
operations of their businesses and participate more efficiently with the industry. The
duration of the connection programme is eight months (Khuthaza, 2012:10).
d) Re a abelana (raa) (more experienced)
Re a abelana is a forum through which programme participants have greater access
to leaders in the industry and opportunities with the established sector. The
programme was aimed at providing participants with skills, exposure, networks and
48
knowledge that would enable them to grow their businesses and plan for the long term.
This is an eight-month certificate programme (Khuthaza, 2012:10).
e) Re a abelana+ (raa+) (those who have completed re a abelana)
In this Khuthaza programme, the aim was to maintain contact with those individuals
who had completed the RAA programme and provide them with continuous
development programmes and mentoring opportunities.
Entrance to these programmes is open to anyone interested and they are open
throughout the year with fees discounted at 10 per cent at each level of the
programme. However, some of the participants have struggled to make the stipulated
payments and therefore monthly payments have been negotiated with the participants
in Connection and Re a abelana levels.
In terms of performance of the Khuthaza programme, it is reported that there were 65
applicants who registered for the 2012 Cornerstone, Connection and RAA
programmes. Out the 65 who registered, 56 of the participants attended the training
frequently over the year and 45 qualified for certificates. Equally, 45 participants
registered for the Cornerstone programme and out of these, 32 candidates qualified
for certificates some individuals were not able to complete their training. Khuthaza
(2012:11) identified some of the reasons why participants did not complete the
programmes or did not receive certificates as including the following:
Challenges finacially;
Being busy on site/sites sometimes located outside Guateng;
Work commitments related to full-time employment (not their own business);
Busy getting alternative income from non-construction businesses;
Family responsibilities (often family illness and deaths);
Distance and transport challenges;
Commitments related to other degree-related study or other development
programmes; and
Other challenging interests and commitments.
49
The Summary of CDP in South Literature on CDPs in South Africa has revealed that
for CDPs to achieve their aims and objectives, they should possess some qualities
as determined by the CIDB (2011b:14). These qualities include, inter alia, the
following:
Goals, vision and objectives out of the CDP and should identify the target
group clearly;
Sufficient budgets should be available for the operation of the programme.
Recruitment and allocation: A qualified and sufficient management team
should be recruited and allocated;
Clearly communicated entry, progression and exit levels and criteria should
be defined;
The training needs assessment of the contractors should be introduced and
the improvement of training and skills programmes for individual contractors
must be considered;
The training should enhance contractors’ chances of acquiring assistance
pertaining to finance, networking initiatives and credit access;
A successful training appraisal and monitoring method must regularly
assess how effective the programme is to contractors and other
stakeholders; and
The training should provide opportunities for the contractors to
communicate their views and difficulties freely without any hindrances.
However, the literature reviewed on CDPs in South Africa has not revealed much on
the ongoing mentoring support for beneficiary contractors after they have undergone
the various CDPs. With mentorship being one of the core best practices for contractor
development, only a few of the CDPs reviewed had a mentorship process, although
this was for eager contractors and client bodies. According to the CIDB (2011a:76),
some clients regard mentorship as an unnecessary expense. It was found that in most
cases there was not sufficient work to sustain the contractors’ training for longer
periods owing to budget slashes from possible clientele, projects, and large trainee
enrolment in the programmes (CIDB, 2011a:76).
50
The issue of mentorship was not adequately described in most of the CDPs reviewed;
however, it was certain that most implementing agencies seemed to understand the
benefits of mentoring even though they had struggled to implement mentorship with
any realistic amount of success (CIDB, 2011a:76). The CIDB (2011a:76) lamented
that although the notion and design of the models may be proper, the resourcing,
oversight by clients and managing of mentors have been difficult. The CIDB further
notes that, in most cases, the ratio of the mentor to pupil contractors was very high.
This high ratio placed undue pressure on the mentors and also compromised the
quality of the mentorship programme.
3.3 CONCLUSION
This chapter presented an overview of of literature on CDPs in South Africa. An
assessment of the framework of contractor development programmes regarding their
purposes, objectives and their patterns of implementions was also discussed.
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CHAPTER FOUR
REVIEW OF INTERNATIONAL CONTRACTOR DEVELOPMENT PROGRAMMES
4.1 Introduction
Globally, there have been CDPs designed and implemented mainly to encourage best
practices for contractors from various geographic locations. Tanzania, Palestine and
Lesotho were studied to ascertain the aims, objectives, achievements and lessons
learnt from their contractor development programmes. These countries were chosen
owing to their similarities with South Africa, such as being regarded as third world
countries.
4.2 Development programme – Tanzania CRB initiative
As stated by Uriyo and Jere (2003: 2–15), the Tanzanian Construction Registration
Board (CRB) ushered in a Structured Training Programme (STP) in 2001 with the
purpose of helping indigenous contractors, bridging the gap skill and knowledge wise
and increasing the capability of local contractors involved in infrastructure
development, restoration and upkeep. The agenda was begun after 38 per cent of
prospective clients and 42 per cent of surveyed contractors demanded for training
platforms to be introduced (Uriyo & Jere, 2003:2).
4.2.1.1 Objectives of the STP
The training’s objectives were to seek solutions to the contractors’ apparent paucity of
technical and management capabilities, lack of ability to break through into higher
forms, inability to acquire up-to-date tools, and their limited access to credit facilities.
4.2.1.2 Structure of the STP
The training programme comprised a five-day course covering before-contract
practice, contract management, construction planning, maintenance of plant and
equipment, and health and safety and contractors were obliged to finish six courses
per year. The charge for training was greatly subsidised, with the CRB covering about
70 per cent and the partaking contractor paying only about 30 per cent.
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4.2.1.3 Achievements of the STP
In measuring the productivities of the STP, Uriyo and Jere (2003:4) obseved that,
within seven years of its commencement, 2,071 contractors had been trained
compared to the budgeted 1,620 contractors. The authors argue that those numbers
demonstrated the popularity of the programme.
Additionally, the annual client opinion report showed a drop in criticisms of contractors’
absence of knowledge and skills during the course of the STP and there was also a
decrease in the complaints related to the use of unqualified individuals on construction
projects.
Equally, contractors also professed the training to be a success although, they
observed some gaps in the programme which they felt required to be taken care of
(Uriyo & Jere, 2003:4).
4.2.1.4 Gaps in the STP
In a study conducted by Uriyo and Jere (2003:5-15) contractors noted the following
gaps:
Training to be made mandatory for all contractors;
Contractors to undertake continuing professional development (CPD) –
(continuous mentoring);
Importance to be placed on lecturing artisans and technicians on skills’
gaps;
Training to be applicable and reactive to industry requirements;
Training in rate-build-up to be included;
Mentorship and internship to be promoted to improve capability;
Continuous monitoring of programmes to assure potency;
Different training programmes for different levels of firms; and
An adequate group of reserve persons to sustain knowledge transferral.
(Uriyo & Jere, 2003:5-15).
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4.2.2 Development programme – Tanzania NCC initiative
The National Construction Council (NCC) of Tanzania embarked on various training
and development programmes when it realised that there were not enough local
contractors to guarantee the road maintenance and rehabilitation projects created by
the government’s Sixth Highway Rehabilitation Programme and the integrated road
projects.
The training programmes were tailor-made and were conducted on a basis of the
clients’ needs (Joseph & Haule, 2003).The training, according to Joseph and Haule
(2003), took place in the following six centres:
Kilimanjaro Centre: Contractors were trained at this centre in labour-based road
rehabilitation and maintenance programmes. The training was done in three phases
and comprised classroom work, fieldwork and trial contracts.
Morogoro Centre: The training programme at this centre included a gravel and
bituminous road and bridges maintenance programme. This programme was financed
by the Swiss Agency for Development Corporation and was carried out in three stages,
namely classroom study, fieldwork and trial contracts.
Mwanza Centre: This centre trained contractors in labour-based road rehabilitation
and maintenance. The implementing methodology was classroom work, fieldwork and
trial contracts.
Nachingwea Centre: Training of small contractors in Lindi and Mtwara Regions in
labour-based technology was conducted at the Nachingwea Centre. The aim of this
programme was to train small contractors to undertake spot improvement and
maintenance of roads (Joseph & Haule, 2003: 5). The Finnish government through its
FINIDA development agency provided both technical and fiscal support for this plan.
Dodoma and Dar es Salaam Centres: The Swiss Agency for Development and
Cooperation financed contractors who were members of the Tanzania Civil
Engineering Contractors Association to undergo training on road maintenance and
rehabilitation. The training comprised classroom work and trial contracts. A total of 139
54
contractors were trained in the Dodoma and Dar es Salaam regions (Joseph & Haule,
2003:5).
4.2.2.1 Achievements of the CDP
Joseph and Haule (2003) cite some success achieved by the programme as being the
completion of over 756 kilometres of road network and the rehabilitation of 420 culverts
across the country.
4.2.2.2 Gaps in the development programme
Gaps in the programmes have been identified and include: (i) inadequate workload for
contractors after the training; (ii) insufficient financial support to contractors after
graduation; (iii) lack of financial assistance to the programmes; (iv) not being able to
source plant and equipment for work after training; and (v) conflict between trained
contractors and employers as some contractors knew more than their employers
(Joseph & Haule, 2003: 8-9).
4.2.3 Development programme – Palestine
In Palestine contractor development programmes were also implemented. The aim of
the programmes were to help smaller construction companies to advance their
managerial abilities in capacities such as pricing, financial management, tenders
submision, contract administration and construction work marketing (Enshassi &
Shaath, 2007:43).
4.2.3.1 Structure of the CDP
The contractor development programme in Palestine was based on the Improve Your
Business (IYB) book. The Improve Your Construction Business (IYCB) agenda
comprised three handbooks and workshop series that tackled subjects such as (i)
pricing and bidding; (ii) site management; and (iii) business management (Enshassi &
Shaath, 2007).
The putting into practice was in two stages, with stage one being the training of the
trainers and phase two, the training of selected construction businesses’ managers
and proprietors, with each training course lasting for around three months.
55
4.2.3.2 Achievements of the CDP
Enshassi and Shaath (2007:52) perceived that most of the contractors had benefited
significantly from the IYCB handbooks and workshops and were pleased with the
models as the learners were able to apply some of the innovative methods learnt.
4.2.3.3 Gaps of the CDP
The contractors observed some of the following as the problems in the programme
which required the attention of the executing agencies:
The period of the training agenda was too lengthy and they proposed that it
should be shortened;
The Arabic translation was not properly done;
Books were more theoretical than practical;
The training did not differentiate between the different levels of contractors;
and
The books did not quite fit the circumstances of the Gaza Strip and the West
Bank.
4.2.4 Development programme – Lesotho
4.2.4.1 Objectives of the CDP
According to Seth (2004), the Department of Rural Roads (DRR) in Lesotho launched
the contractor training programme (CTP).
The objectives included, among others, promoting labour-based work methods,
creating a sustainable road maintenance system for the DRR, and enhancing the
institutional ability of the DRR to manage the CTP effectively. The CTP was supported
both nationally by the Lesotho government and internationally by the International
Development Agency by providing financial support, while the ILO provided expert
help.
The technical assistance provided included (i) selection of new entrepreneurs to the
programme, (ii) preparation of bidding documents, (iii) planning and implementation of
56
trial contracts, (iv) observing of contractor performance (v) training of DRR staff to
implement the CTPs; and (vi) advice on preparation of training materials, technical
handbooks and a trainer’s manual (Seth, 2004:2).
4.2.4.2 Structure of the CDP
The training was in two phases, with phase one being a nine-month road maintenance
and rehabilitation (ROMAR) programme and phase two a 12-month road construction
and upgrade (ROCAU) programme.
Applicants were screened and selected for the programme based on their educational
background and previous experience in labour-based work methods. Secondly, a
written proficiency test was administered to evaluate the applicants’ knowledge of
English language and mathematics. Successful candidates were invited into the
training programme (Seth, 2004: 2).
Contractors underwent the ROMAR training first and upon successful completion, they
were capacitated to undertake a “no-bid” routine maintenance contract which was
assessed at less than US$10,000 (Seth, 2004:2). Depending on their size and the
calibre of their workmanship, trained contractors were allowed to undertake more than
one project of routine maintenance work and were later promoted to undertake
rehabilitation work valued at under US$100,000. Only candidates who had been
successful in the rehabilitation work were allowed to proceed to the ROCAU training.
The ROCAU training included (i) classroom work; (ii) site demonstration; (iii) trial
contract in routine maintenance; and (iv) trial contract with periodic maintenance (Seth,
2004). The classroom work covered technical and business administration topics such
as road materials, technical specifications, bid planning, estimating, contract
administration, site management and bookkeeping.
The work for trial contracts was granted to contractors without any competitive bidding
and the contractors were allowed to add a 10 per cent profit to the negotiated rates
based on engineers’ estimates.
57
4.2.4.3 Achievements of the CDP
Seth (2004:3) observed that some of the key outcomes of the programme, and hence
successes, included: (i) the training of 43 new contractors in ROMAR and 12 in
ROCAU; (ii) the creation of temporary employment opportunity in rural areas to
alleviate poverty; (iii) the improvement of the DRR’s institutional efficiency by reducing
staff by 260; (iv) a reduction in foreign exchange due to reliance on local construction
equipment; (v) the improvement of construction standards of local contractors; (vi) the
improvement of the technical and managerial capabilities of local contractors; and (vii)
a total of 2,100 kilometres of routine maintenance, 56 kilometres of periodic
maintenance, 45 kilometres of rehabilitation and 20 kilometres of upgrading work
worth an estimated cost of US$7.5 million executed under the programme.
4.2.4.4 Gaps in the CDP
Some of the constraints in implementing the programme were said to include: (i) the
contractors’ inability to handle site management; (ii) the unwillingness of private banks
to give credit facilities to contractors without collateral; (iii) the inability of contractors
to secure sureties or guarantees from financial institutions; (iv) new contractors finding
bidding documents to be too complex; and (v) multipart bureaucratic payment
procedures delaying contractors’ payments for months.
Synthesis of findings from CDPs
A synthesis of the CDPs reviewed in this section has been undertaken as can be seen
in Table 4.1. It appears from the four development programmes that they all have
similar gaps. The gaps in the CDPs include the need for continuous development and
training being designed based on the contractors’ area of business as it becomes
difficult for contractors to travel away from their homes in order to attend training. The
CDPs must be aimed at addressing specific contractor needs in order to avoid ‘one
size fits all’ programmes. Beneficiaries wanted the CDPs to be designed with the aim
of bridging the skills’ shortage gap between contractors by targeting the training at the
contractors’ level of competencies. The trainees also believed that the CDPs should
be more practically oriented, have shorter durations, subsidise the cost of training to
58
affordable levels or preferably should be free and should have easy-to-understand
bidding documents. The lack of prompt payment and assistance from clients and
financial institutions during and after the training were also identified as some
impediments and hence would impact on the CDP sustainability.
Table 4.1: CDP gaps in some developing countries
Item Contractors’ perceived Gaps. CDP had no
Tanzania -CRB
Palestine Lesotho Tanzania -NCC
i.
Continuous professional development (CPD) – Mentoring of contractors after graduation
X X X X
ii. Plan to bridge skill shortage gap between start-ups and established firms
X X X X
iii. Training adopted to specific area
X X X X
iv. Different training requirements adopted to different levels of contractors
X X X X
v. Allowance for those unable to afford the training cost
X
X X
vi. Relevant and responsive training to industrial needs
X X X X
vii. Consideration of the duration of training programme. Perceived to be too long
X X X X
viii. Emphasis on practical training
X X X X
ix. Assistance in acquiring financial and technical advice
X X X X
x. Simplified bidding documents
X X X X
xi. Prompt payment system to trained contractors
X
X X
4.3 CONCLUSION
The chapter on some selected contractor development programmes has discussed
their performance in South Africa and other developing countries. The conception of
these CDPs, their planning and design, their implementation models, some best
practices and some gaps were identified and discussed.
59
The results indicate that a holistic approach to the implementation of CDPs is required
in order for the programme to succeed. However, what is also apparent is that
mentoring and continuous training in the CDPs are increasingly being recognised as
being at the focal point of the CDP performance and sustainability. In addition, the
institutional structures, training and skills’ development models, and monitoring and
evaluation were all identified as complementing the successful implementation of
CDPs.
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CHAPTER FIVE
CONTRACTOR DEVELOPMENT MODELS
5.1 INTRODUCTION
This chapter reviews some models which have been developed to assist with
contractor development. The literature shows how many national, provincial and local
government bodies, implementing stakeholders and some financial institutions have
worked assiduously to formulate and implement models and other interventional
measures to assist the development of contracting firms. This chapter presents some
of the models.
5.1.1 The South African Construction Excellence Model
The South African Construction Excellence Model (SACEM) as shown in Figure 5.1
was produced by the Council for Scientific and Industrial Research (CSIR) as a tool
for contractor development in South Africa. The SACEM is a business performance
assessment tool designed to evaluate the overall performance of contracting entities
and also to assist in developing contractor capabilities in an effort to eliminate some
of the challenges facing SMME contractors (Dlungwana & Rwelamila, 2005:2).
Dlungwana and Rwelamila (2005:2–3) explain that the SACEM uses a questionnaire-
based method to assess the contractor’s level of improvement and the degree to which
the contractor is adhering to best practices. This model was built on the principle of
strong leadership, long-term approach, continuous improvement, client focus, people
management and results orientation. Therefore, the model provides an assessment of
contractors’ strengths and weaknesses in order that appropriate improvement be
implemented by the management.
Dlungwana and Rwelamila (2005:3) further assert that the SACEM is not only a
performance assessment tool but also aims at supporting the national strategic
development for the construction industry by expediting the rapid implementation of
best practices to guarantee contractors’ improvement of their output, competitiveness,
and planned management of social and environmental matters. The contractors’ quest
61
for profit, growth and sustainability should match their performance in the management
of socio-environmental matters (Dlungwana & Rwelamila, 2005:3).
This model suggests that a CDP should be subjected to monitoring and evaluation to
assess whether the programmes are being implemented as planned. Of importance
in this model is the measurement of the actual development of the trainee contractor.
Figure 5.1: The structure of SACEM
Source: Dlungwana and Rwelamila (2005:5)
5.1.2 The Integrated Emerging Contractor Development Model
The integrated emerging contractor development model was developed to be a vehicle
to facilitate skills and knowledge transfer to the construction firms. The objective of the
IECDM was to assist with developing small construction firms to become competitive
and sustainable businesses (Dlungwana et al., 2004). Hauptfleisch (2006:9) explains
that even though implemented in some provinces with satisfying outcomes, the IECDM
shown in Figure 5.2 is a complex model which requires capable management for its
successful implementation. Lazarus (2005:3) notes that the IECDM is a best-practice
tool designed to help implementing agents to aid the implementation of CDPs with the
62
added elements of project management and total quality management. According to
Dlungwana et al. (2004.), the model is a framework for managing contractor
development by facilitating the selection of suitable construction firms, implementation
of a programme of skills training, mentorship and total quality management. It
incorporates training and mentorship and depends on various stakeholders
contributing towards contractor development. The framework is therefore an all-
inclusive model which requires the involvement of all stakeholders for its successful
implementation.
According to Hauptfleisch (2006:4–9), the successful implementation of the IECDM
depends on the following:
Project manager: The IECDM is functional as a project within a project management
programme. Mediocre outcomes have been observed where the method was mainly
to assign funds to development inventiveness short of solid project management.
Hauptfleisch (2006) observed that if “a programme is not project managed, the ending
is unsurprisingly poor.”
Client - every project should have a clearly identified client who is committed to:
provide or facilitate a construction contract for contractors, valued not less
than R5 million for a period of 24 months. The model of contractor
development is based on the ‘learn and earn’ surroundings with mentoring
backing on site. The on-and-off obtainability of jobs for contractors on the
programme disturbs the progression and distracts the contractors’ attention
on development; and
dedicate management contributions in the agenda, make adequate budget
available for the programme, require attainable assurances from contractors
and enter into contracts with all necessary role players (Hauptfleisch,
2006:6).
Emerging contractors: The contractors should meet the following criteria:
63
Can be assessed for the recognition of prior learning (RPL) in order to select
a sustainable training package;
Meet minimum CETA requirements to enter a “learnership” programme,
leading to a national construction contractor qualification;
Intensive 24 month training programme commitment; and
Be previously predisposed to a mentor/protégé relationship.
Accredited construction mentors: Being trained in a specific discipline does not assure
automatic ability to act as a mentor. Mentors are selected for the programme according
to the following specific criteria. They must:
pass an examination and a psychometric evaluation
take part in a structured training course to establish understanding and
compliance requirements of mentoring objectives;
pass an interview for selection into the programme;
be devoted and unswerving to perform as a business guide and sounding
board of the emergent contractor, in some cases taking on executive duty;
supervise the established (formal) training of the upcoming contractor and
the transference of such expertise to the business of the contractor; and
have as a main objective the development of a self-sufficient and
sustainable contractor who can operate independently for 24 months.
Construction Education and Training Authority: CETA, as the constitutional body
providing funding for skills advancement, is involved in the training programme and
should therefore provide the following:
Finance for a three-party contract to enable training by a training worker, the
three parties for the agreement being the emerging contractor, the client
(acting as the employer) and a training provider registered with CETA;
Assistance with the recognition of prior learning (RPL) process; and
Fulfilling its customary role as training consultant, evaluating results of the
training.
64
a) Training providers: CETA-accredited training providers should be carefully
selected in order to ensure their capability to make available the necessary
training, working inside a organised managed agenda differing from the
common practice where training providers are only answerable to CETA. Banks
and other financial institutions: Banks and other financial institutions see
emerging contractors as high risk and therefore ‘not bankable’ and where they
are willing to help, they ask for collateral which contractors cannot provide.
Owing to this higher risk of the emerging contractors, financial institutions,
including some government-controlled ones, are reluctant to do business freely
with these contractors. The following security should therefore be built into any
facility:
An out-and-out bank account for each construction agreement that is
signed;
All disbursements outstanding to the contractor for job completed should be
paid to this account and withdrawals should only be made under the
combined signatures of the contractor and the mentor;
Facilities should first be provided by banks alongside a pre-set cash flow
forecast permitted by a mentor.
Construction Industry Development Board: The CIDB should be involved as a critical
stakeholder in order to add value. Equally, by the contractors getting registered, they
ascribe to the CIDB ‘best-practice: registration is a symbol of the ability to undertake
projects of a particular magnitude and it also helps contractors to aspire to grow to
higher levels of grading on the record, and be permitted to be able to contest for larger
and more rewarding projects in the yet to come. This consequently conveys a strong
motivation for contractors to progress themselves and their businesses.
Quality managers: Self-governing quality managers with the function of visiting the
contractors and their mentors regularly and reporting to all concerned for the duration
of the programme. Monthly progress reports from the quality managers and the
tripartite parties such as contractors, mentors and training providers can be the
foremost ideal documents used to offer the client with complete responses concerning
the development programme.
65
a) Professional services: The role of professional services in the IECDM is dual.
First, the project consultants are made mindful of the arrangement of the
programme and their backing is lobbied for the progress of the contractors. The
conflict between consultants wanting to complete projects on time and within
cost limits versus a ‘learning’ contractor not having the skills to complete on
time and within budget is minimised. Second, even though not a common
occurrence, a financial plan must be put in place to get specialist expert support
for the programme when required.
The IECDM differs from the SACEM in that it incorporates a linkage for the critical
stakeholders in the construction industry to be part of the development programme.
The IECDM also relies on the aspect of measurement of contractor progress.
Figure 5.2: The structure of IECDM
Source: Hauptfleisch (2006:1–5)
5.1.3 Supply-side interventions to accelerate growth of priority enterprises
It is also argued that contractor growth can be accelerated from interventions related
to the supply side of the value chain. Watermeyer et al. (2001:5–8), in support of this
66
theory, recommend the linking of procurement and supply-side interventions in CDPs
in order to speed up the growth of prioritised enterprises.
The range of interventions in a structured CDP, according to Watermeyer et al.
(2001:5-8), must encompass the following:
a) Interventions facilitated by the client. These are an integral part of the supply
chain activities and are facilitated and paid for by the client to provide a mechanism
for prioritised contractors to accelerate their development. The client may allow for
any or all of the following:
Third party management support: In this planning, a client employs
service providers to make available certain construction and
materials management facilities and to direct, help and train ‘on-the-
job’ young contractors in the carrying out of the contract and
supervise that the jobs progress acceptably according to the
specified requirements, thus reducing the client's risk exposure.
There is no contract between the prioritised contractor and the third
party management support provider. However contracts are entered
into between the third party and the client and between the selected
contractor and the client (Watermeyer et al., 2001:5–8).
Mentorship: In this arrangement the client should make provision
for the services of a qualified mentor in the contract by including a
re-measurable item for mentorship in the bill or schedule of
quantities. This item would comprise a maximum number of hours,
the whole or part of which may be omitted by the client, and a fixed
hourly rate for mentorship services. The contractor would appoint
the mentor and be reimbursed for the services of the mentor in
accordance with the provisions of the contract. Contractors are
required to obtain the services of accredited mentors who are then
required to assist contractors with the preparation of their tenders at
risk and should then be required to certify that, in their opinion, the
tenderer is able to complete the contract for the tendered sum. The
contractor, upon award of the contract, is required to submit a
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mentorship plan to the client that sets out the mentorship
requirement for the contract. Mentorship is only provided by the
client department if the plan is approved. According to Watermeyer
et al. (2001:5-8), a contract is not entered into between the mentor
and the client in this type of client intervention arrangement.
b) Interventions facilitated by institutions. In these types of arrangements, the
contractors are afforded services of professional institutions to do with legal and
business decisions. Watermeyer et al. (2001:5–8) explain that in this type of
intervention, support is autonomous of the supply chain arrangements, and
generally encompasses the following:
Business and risk management.These are multifaceted business services
which, according to Watermeyer et al. (2001:7), should be provided by legal
and accounting firms aimed at assisting contractors to grow in their
businesses.
Supportive institutional arrangements. Different institutional arrangements
may be obligatory, reliant upon the administration within which line up
enterprises function and may include tender/business guidance centres,
training in commercial, technical, administration and managerial areas,
financial facilitation, ‘soft’ loans, connecting finance facilities and capability
building (Watermeyer et al., 2001:7).
5.1.3.1 Linking procurement and supply-side interventions
Growth of small contracting organisations may also be achieved by linking
procurement strategies to supply side interventions. Watermeyer et al. (2001:7) argue
that there has to be a link between interventions and procurement in order to achieve
rapid growth in CDPs. Figure 5.3 shows how the two interventions could be linked with
government procurement process for contractors’ growth.
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Figure 5.3: Supply-side interventions required to accelerate the growth of
prioritised enterprises
Source: Watermeyer et al. (2001:7- 8)
5.2 FACTORS FOR SUCCESFUL IMPLEMENTATION OF CDPs
Ensuring that CDP programmes are successful is critical. Therefore knowing what
factors would assure success is essential. According to the CIDB (2011:76–78), the
implementing client’s knowing the rationale for the programme is critical to the success
69
of a CDP. Furthermore, a successful CDP must have political and administrative
backing and the size of the programme should be determined by the implementing
agents. The programmes should also have clear entry and exit points and commitment
of funds from management and political bodies where applicable.
The CIDB argues that the selection of contractors to the CDPs, transparent, cost-
effective and fair procurement strategies and the simplicity of contract documentation
will contribute to success of the programmes.
The common elements observed for the successful implementation of CDPs from the
literature reviewed on South Africa, some developing countries and the models of
contractor development are summarised and presented in Table 5.1. The elements
common to most of the studies include classroom work, fieldwork and mentorship.
5.2.1 Classroom work
With the exception of the SACEM and supply-side interventions which did not
specifically mention classroom work, the rest of the studies (Uriyo & Jere, 2003;
Joseph & Haule, 2003; Seth, 2004; Hauptfleisch, 2006; Enshassi & Shaath, 2007;
CIDB, 2009 & 2011; Khuthaza, 2012) as per Table 5.1 identified classroom work as
being the first part of the implementation of CDPs.
5.2.2 Fieldwork
With construction being practically oriented, it is crucial that fieldwork be part of a
contractor development programme. The use of fieldwork for the implementation of
CDPs feature prominently in all the literature reviewed (Uriyo & Jere, 2003; Joseph &
Haule, 2003; Seth, 2004; Hauptfleisch, 2006; Enshassi & Shaath, 2007; CIDB, 2009
& 2011; Khuthaza, 2012). All these sources see fieldwork as an integral part of
contractor development as depicted in Table 5.1.
5.2.3 Mentorship
As can be seen in Table 5.1, all the studies reviewed (Uriyo & Jere, 2003; Joseph &
Haule, 2003; Seth, 2004; Hauptfleisch, 2006; Enshassi & Shaath, 2007; CIDB, 2009
70
& 2011; Khuthaza, 2012) identify mentorship as an important element for contractor
development.
Table 5.1: Factors for successful CDPs
Factors for successful CDPs
Cla
ssro
om
wo
rk
Org
an
isatio
n
Fie
ldw
ork
Me
nto
rsh
ip
Vukuzakhe CDP (CIDB, 2011) X X X
Masakhe CDP (CIDB,2009 & 2011) X X X
Vuk'uphile Learnship Programme (CIDB,2009 & 2011) X X X
Khuthaza CDP (Khuthaza,2012) X X X
SEDA Construction Incubator (SCI) Programme (CIDB,2009 & 2011) X X X
Eskom Construction Academy (CIDB,2009) X X X
Development Programme – Tanzania 1 (Uriyo & Jere, 2003) X X X
Development Programme – Tanzania 2 (Joseph & Haule, 2003) X X X
Development Programme – Palestine (Enshassi & Shaath,2007) X X X
Development Programme – Lesotho (Seth, 2004) X X X
SACEM – Dlungwana and Rwelamila (2005) X X
IECDM – Hauptfleisch (2006) X X X
Supply-side interventions required to accelerate growth of priorities
enterprise (Watermeyer et al., 2001)
X X
Source: Researcher’s design
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Figure 5.4 summaries the elements required for a successful implementation of CDPs.
Figure 5.4: Elements of successful CDPs
Source: Author’s own design
5.3 CONCLUSION
This chapter discussed the role of various institutions in assisting the development of
contractors in the South Africa. Equally, all the models for successful implementation
of CDPs in South Africa point to the fact that for CDPs to be successful, there has to
be a combination of strong leadership, government approval and participation, and the
involvement of financial institutions. Since the capacity of contractors varies, any CDP
needs to be flexible in terms of content adjustment, methods of implementation and
their accessibility. Therefore it appears that the critical elements for successful CDP
implementation should include classroom work, fieldwork and the mentoring of
contractors after graduation from the CDPs.
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CHAPTER SIX
IMPORTANCE OF CDPs IN THE CONSTRUCTION INDUSTRY
6.1 CONSTRUCTION’S CONTRIBUTION TO ECONOMIES
The CDPs are very important because of the industry within which they are located:
the construction industry. The construction industry plays a myriad of important roles
in the socioeconomic development of most countries as it is able to employ both skilled
and unskilled labour in the economy and also provide infrastructure for the other
industries, as noted in the scenarios below.
The Organisation for Economic Co-operation and Development (OECD) (2008:6)
postulates that one of the most important driving forces for construction activity in
OECD countries is the increased spending on infrastructure and non-residential
development. It was further noted by the OECD (2008:6) that the construction industry
sector contributes about 6 per cent of the GDP in some of the largest OECD countries
and about 9 per cent of employment in these countries.
In a UK study by the Department for Business, Innovation and Skills (DBIS) it was
noted that the construction industry contributed about 7 per cent of the UK economy,
comprising over 280,000 businesses and covering some 2.93 million jobs (DBIS,
2013:7). The Australian construction industry, according to Gallery (2008:6),
contributed about 6 per cent to the economy and comprised about 8 per cent of the
labour force.
The Sri Lankan construction sector contributed nearly 8 per cent of the gross domestic
product (GDP) and was seventh among 13 major sectors contributing to the country’s
GDP (Chamber of Construction Industry Sri Lanka,2012), while the Palestine
construction industry contributed about 26 per cent to the country’s economy in 2000
(Mahamid, 2001:1).The importance of the construction industry in the Indonesian
economy reflects almost the same as the above scenario (Wibowo, 2009) and also in
Ghana as shown by Osei (2013).
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PWC (2013) stated that the construction industry in South Africa attained a net profit
margin of up to 6 per cent in 2010 while Industry Insight reported that South Africa’s
construction industry contributed nearly 4 per cent to the GDP in 2012 (Industry
Insight, 2012:17). The industry could also be used as an economic stimulus to revive
the country's economy as it was used by the South African government after the
world’s economic meltdown.
Ngandu et al. (2010) discuss how the government used construction to stimulate the
South African economy after the recession. They observe that “…when construction
is stimulated through a government infrastructure investment program, demand for
intermediate inputs used by construction expands” (2010:10).
To elaborate on their observation, Ngandu et al. (2010:10) argued that;
“…assuming that the R787 billion allowed for in the 2010 National Budget Review for
infrastructure project over three years is entirely used in construction activities, the
total effect during the first year generates an increase of over R1.3 trillion in income of
all production activities and R250 billion in household incomes”.
Ofori (2012:4–5) summarised the importance of the construction industry to countries’
economies as being the spine of every country’s socioeconomic development, as the
outputs of construction industry’s activities such as buildings and other infrastructure
are where production and manufacturing of goods and services take place.
Businesses require buildings to work from, and roads and highways to transport and
distribute their goods. In most countries the provision of basic shelter and basic
education are constitutional obligations and these are achieved by the involvement of
the construction industry. The industry promotes tourism in most countries, as tourists
look for better accommodation and other infrastructure. The literature shows that for
most economies the construction industry contributes between 5 per cent and 10 per
cent of the GDP. About 10 per cent of the working population of countries are
employed in the construction industry.
Ofori (2012) postulates that governments can regulate the way they spend country’s
fiscal resources by using construction to introduce desired changes in their
economies. This can be done by investing a large part of their income in the
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construction of basic infrastructure such as hospitals, schools, roads, bridges, airports,
harbours and power stations.
With the construction industry’s links to other industries in the economy, it means that
when the construction industry struggles, the ripple effect is felt in other industries and
the economy in general (Ofori, 2012:4-5).
Employing about 10 per cent of a country's population means that when there is a
boom in construction activities, there will be money in the economy to be spent in the
other sectors such as manufacturing, legal and other professional services as well.
Finally, the construction industry’s use of employee labour-intensive methods allows
it to generate employment for the citizens of most nations. Since most of construction
activities in developing countries happen in rural areas, most of the youth in these
areas are employed and able to support their families and the economy in general.
The majority of the construction activities on the site are undertaken by mostly local
SMME contractors who have acquired the projects through direct bidding processes,
sub-contracting or through joint ventures with other firms.
Wharton and Payne (2003:1) opine that about 90 per cent of construction firms in the
EU are small to medium-size and 93 per cent of these firms are macro enterprises.
They further elaborated that these SMME firms employ 50 per cent of the whole
construction workforces.
The OECD (2008:7) affirms this point by citing the European Construction Industry
Federation (FIEC) which observed that out of a total 2.9 million EU construction
companies in 2007, 95 per cent were SMEs with fewer than 20 employees. It was said
that 60 per cent of all construction work in the EU was undertaken by companies with
not more than 50 employees.
6.2 CONSTRUCTION BUSINESS REQUIRES COMPETENCE
The construction industry is a specialised sector of an economy and it poses its own
unique challenges such as overcoming fierce competition, dangerous work
environments, material supply interruptions, price escalations, labour disputes, many
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projects being undertaken at the same time, litigation, rigorous and ever-changing
regulations, and often ambiguous drawings, specifications and contract
documentation. Consequently, such demands require a unique set of skills and
competencies to run a construction business effectively.
Entrepreneurs venturing into the construction business should be aware that just as in
any other business, there are some competences to be acquired to enable the
successful running of a construction business. Contracts signed between clients and
contractors oblige contractors to undertake the work with due diligence and complete
it within a reasonable time and budget, and deliver an acceptable quality to serve the
clients’ purpose. The contractor is expected to play its part in delivering the contract
as per the client’s scope and this can only be achieved through the competences built
over a period or taught under the CDPs.
According to Arslan and Kivrak (2008), some of the important factors of a company’s
success include sound business management and the ability to organise and plan for
a project or projects. In addition to planning and organising, the availability of cash is
also another essential part of a company’s success. The authors further contend that
the behaviour of the owner-manager is also a critical success factor. Quality of work
and workmanship which includes client satisfaction, use of good quality materials,
teamwork and harmony was the other factor. Other success factors include company
image, good advertisement and competitive pricing which were considered as the
most important strategies for a construction business. It was identified that doing
business in markets where the company has adequate experience was another factor:
experience is therefore a critical issue in the market entry assessment and basis of
competitive advantage. This factor was considered as an essential element for
success (Arslan & Kivrak, 2008:43–46).
Paz (2006) also posits that contractors need to possess some qualities such as
effective leadership, where the contractor can take risks and has a ‘can-do’ type of
personality to propel the firm through difficult times, and also be firm but fair, deliver
on promises and hold others accountable for their commitments. Paz (2006) argues
that competent contractors are able to view human resource talents as their most
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important asset and are able to train them periodically. In addition, the author contend
that competent contractors have sound project management systems which allow for
the regular update of their information, and they must also possess and retain good
financial management and liquid cash flow for the successful implementation of
projects. They must possess superior estimating skills and must be selective in the
work they bid for and they must have a well-defined market niche and then focus their
efforts within those niches (Paz, 2006:1-3).
Mbachu (2012:864) summarise these competences required by a contractor and
group them under three main subjects, namely technical, managerial/business and
generic skills and knowledge.
6.2.1 Technical competences
The contractor technical competencies may include the ability to:
price and submit tenders or quotes as requested by clients;
estimate quantities of materials required for a job;
interpret construction drawings, specifications and contract documentations
for setting out projects on site; and
prepare requests for quotations from subcontractors and be able to select
their preferred subcontractor.
6.2.2 Managerial/business competences
Other preferred competencies that contractors should possess relate to managerial
and or business aspects such as:
project management;
risk management;
contract and conformity management;
financial management, accounting and cash flow management; and
planning and variation management.
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6.2.3 Generic skills and knowledge competence
In addition to the core technical and management competencies, other more generic
competencies are just as critical. The set, according to Mbachu (2012:864), should
include, inter alia, the following:
Computer literacy;
negotiation skills;
Dispute resolution skills;
Organisational skills;
Operational research;
Numeracy skills; and
The ability to solve problems.
Larger construction firms have all the above skills as they are able to employ
professionals for almost all the aspects. However, most SMME companies are unable
to employ professionals and as such they are owner-managed. Therefore the owner-
managers are responsible for the implementation of the various skills. The need,
therefore, arises for the owner-managers to be trained in all the competency elements
to enable them to function effectively to the benefit of the firm.
6.3 FACTORS CONSTRAINING THE COMPETITIVENESS OF SMME CONSTRUCTION BUSINESSES
The other important reason for implementing CDPs is the competitive nature of the
construction industry. The highly competitive nature of the construction industry
requires that contractors attain certain competencies which they may currently lack.
According to Wasi et al. (2001), Enshassi and Shaath (2007), Thwala and Mvubu,
(2008), Thwala and Phaladi (2009) and Laryea (2010), some of these challenges
include contractors’ inability to price and complete a winning tender and this affects
them negatively because there is a high number of contractors at the starting or lower
end of the CIDB grading, and that means a large number of contractors have to
compete for the limited projects in the market. With a situation such as this, astute
contractors have an advantage in such a competitive environment. Makhura (2011:65)
found that one of the greatest challenges facing SMME contractors is their lack of
78
knowledge on tendering and procurement. This aspect is a disadvantage in such an
environment and definitely requires development. According to Ntuli and Allopi (2013),
competitive pricing enhances the contractor’s chances of getting continuous work.
In fact, SMME contractors in the country appear to lack these qualities as “…an
average of 7 per cent profit margin for the construction sector is forfeited with wrong
costing and pricing calculations” (Greyling, 2012:7).
The other hindrance that constrains SMME contractors is their inability to market
themselves. Word-of-mouth can elevate or diminish one's chances of getting more
work. The construction market is one of those unique markets where continuity can be
assured due to the quality of work delivered in the previous work. However, it seems
that most clients are dissatisfied with the quality of work they receive from SMME
contractors (Mbachu & Nkado, 2006). The CIDB (2011c:4) also points out the fact that
most SMMEs seem to deliver projects of low quality as their evidence suggest that the
quality of work decreases with increased project size in South Africa.
Smallwood (2010:941) observed that quality of work ranks the highest in the clients’
satisfaction index in South Africa. The lack of quality in contractors’ work has resulted
in the Department of Human Settlements using 10 per cent of its 2009/10 year’s
budget to repair poorly built Reconstruction and Development Programme (RDP)
houses (CIDB, 2011:4).
Further to the above is the contractors’ lack of or poor management skills. Poor
management affects a company’s reputation and a bad company reputation can have
adverse effects on the survival of the company. Management skills entail
administrative, financial and technical skills.
Greyling (2012:43) laments that most contractors do not have enough understanding
of the basic contracts being used in the country. Makhura (2011:65) supports this
observation and notes that most of the contractors were not familiar with contracts
being used in the South African industry. Similarly, Ntuli and Allopi (2013) find a lack
of management skills as being one of the obstacles retarding the progress of the
contractor.
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Financial skills are found to be among the high-ranking challenges which SMME
contractors are facing (Ntuli & Allopi, 2013; Makhura, 2011). Identified practices
among SMMEs included ineffective financial skills, which may result in bad cash flow
projections, cross-financing other businesses and misuse of company funds, which
can be detrimental to the health of the SMME firm.
Equally, a lack of technical skills may lead to construction mistakes and the work
needing to be redone. Reworking takes additional time and could have serious
implications regarding the completion time of the project. A bad or careless
interpretation of drawings and specifications on site can result in a catastrophe; the
contractor will have to rectify the problem at his or her own cost and in his or her time
(Greyling, 2012:43).
The problem is also compounded by the fact that there are many small contractors
registered in the lower categories. Records at the CIDB suggest that the current CIDB
register of contractors takes the form of a pyramid with more contractors being
registered in the base categories and the few at the peak, enjoying most of the contract
work. According to the CIDB (2013), over fourteen thousand contractors were
registered on the CIDB Register of Contractors in Grades 2 to 9. In 2012, 90 per cent
of the registered contractors were in the designation of Grades 2 to 4 and 10 per cent
were in Grades 5 to 9.
Moreover, over 80 per cent of the general building and civil engineering classes of
works contracts in the public sector were awarded to contractors in the CIDB Grades
of 7 to 9 and only about 6 per cent to 8 per cent were awarded to Grades 2 to 4
(CIDB, 2013:1-2).
Records also show that not many contractors have been able to move upwards in
terms of grading. One of the reasons for this stagnation is that the grading system of
the CIDB targets the enterprise and not the individual and therefore the enterprise is
downgraded when the contractor fails to sustain workflow (Greyling, 2012:41).
The apparent lack of information communication and technology (ICT) skills also
hinders most SMME contractors’ progress. With ITC skills businesses have become
80
more productive in their business and are able to exploit other ventures and look for
and communicate with other potential clients. Unfortunately, it appears that contractors
in South Africa lack the expertise to utilise the advantages that ICT offers. Dlungwana
et al. (2002:1) contend that “…South Africa is a technology colony” and therefore
contractors, especially SMME firms, should capitalise on ICT.
Finally, other basic skills such as negotiation and dispute resolution, organisational
knowledge, numeracy and the ability to solve problems are critical to the survival of a
business (Mbachu, 2012:864). Greyling (2012:41) concludes that despite all the
copious interventions and strategies that have been put in place by government and
other stakeholders, SMME contractors reflect poor human resources management,
poor business planning, poor investments and they fail to perform within the set
quality, time frames and budgets. These inadequacies put their competency in
question. In agreement with this assertion, Ntuli and Allopi (2013:95) contend that
most of the people running SMME companies lack operational and strategic skills.
SMME contractors should be able to communicate with stakeholders, should be
abreast of their procurement of materials and services, must possess risk
management skills and manage human resources (Makhura, 2011:58).
The CIDB (2011:5-8) identified a number of challenges impacting on SMMEs and
summarised them as follows:
Absence of business and financial skills;
inadequate admittance to finance, trade credit and performance bonds;
Delayed compensation by clients affecting contractor cash-flows, causing
deferrals in the conclusion of projects and eroding away their profit margins
and also tying up operational capital, and consequently encouraging
corruption;
High turnover amongst skilful personnel due to doubts in job openings;
The fragmentation of the construction method having a confrontational
result on the total performance of the industry;
The short-term way of the job which makes it difficult to advance and carry
outt long-term approaches and growth procedures;
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Officious or overly complicated contract award and contract administration
procedures;
Strong competition, particularly in lower levels of construction enterprise,
and struggles in challenging with larger construction firms;
Not enough wealth to provide a harmless and decent functioning
environment such as protection, equipment and attire;
Lack of expert advisors and consultants, and whenever available, the
unwillingness to use them due to alleged high costs of professional charges;
Dearth of assets equipment such as vehicles, heavy machinery or
scaffolding; and
Doubts/Uncertainty of supplies and prices of resources, associated with
commonly absent or poor relationships with suppliers.
These factors may lead to low productivity, poor quality workmanship, and low delivery
of construction projects in the South African construction industry (CIDB, 2011:6–8).
6.4 CONTINUOUS TRAINING AND DEVELOPMENT
Continuous professional development is key for most professions. It is arguably even
more critical to SMME contractors because of the competitive nature and difficult
environment in which they operate. With competition for limited work opportunities
becoming stronger, and globalisation threatening local businesses, most companies
are striving to improve their skills and knowledge in order to survive. The importance
of training and development has been advocated for by many (Paradise, 2007; Aguinis
& Kraiger 2009; Ongori & Nzonzo 2011; Jehanzeb & Bashir 2013). Those entities
which have embarked on this road of training have also seen benefits. Numerous
companies and organisations have seen the benefits of training and development and
have subsequently invested huge sums of money into training and development for
the betterment and improvement of the skills of their employees (Jehanzeb & Bashir,
2013:244). Paradise (2007) states that companies in the United States alone spend
more than $126 billion per year on employee training and development.
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6.4.1 The concept of training and development
Several definitions of training and development exist. It should be noted, however, that
these terms have been defined in various ways throughout the literature. Masadeh
(2012:63) defines training as a planned process to modify the attitude, knowledge,
skills or behaviour through a learning experience in order to achieve effective
performance in any activity or range of activities. Its purpose in the work situation is to
develop the abilities of the individual and to satisfy current and future manpower needs
of the organisation (Masadeh, 2012: 63). Aguinis and Kraiger (2009:452) define
training as “…the systematic approach to affecting individuals’ knowledge, skills, and
attitudes in order to improve individual, team, and organisational effectiveness”.
According to Gansberghe (2003), development is a long-term process designed to
enhance potential and effectiveness. It is also defined as the growth or the realisation
of a person’s ability through learning, often from planned study and experience. It is a
systematic effort affecting individuals’ knowledge or skills for purposes of personal
growth or future jobs and/or roles (Aguinis & Kraiger, 2009:452).
6.4.2 Modules of training and development programmes
Different companies and organisations have developed various training and
development programmes to assist in the growth of their companies or the intended
recipients, but for whatever objectives they are designed, for training and development
programmes to be perfect they must consist of a mixture of knowledge, development
and goal setting (Jehanzeb & Bashir, 2013:244).
Cotterill (2004:3) elaborated that before training is implemented, there should be an
identified shortfall of skills, after which training needs must be established, and then
training objectives must be defined. Training methods must also be chosen and the
proficiency target level of the trainees must be set.
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Cotterill (2004:3) further used Eckstrand’s systems model of training (Figure 6.1) to
explain that before an organisation can undertake training, it should first go through a
series of processes such as definition of training objectives, definition of training
content, definition of training methods and materials and thereafter development of a
training programme
Figure 6.1: Eckstrand's systems model of training
Source: Cotterill (2002:4)
6.4.3 Model of training management
For training to yield successful results for an organisation or an individual it requires a
model to assist management with the training programme. There are numerous
training models which have made an impact in the field of training and development.
These models include instructional systems design, total quality management (TQM),
performance-based instructional design, human performance technology and the
ADDIE model (See Fig. 6.2) (Bichelmeyer, 2005).
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Figure 6.2: The ADDIE model of training
Adapted from Bichelmeyer (2005)
Cotterill (2004:6) developed a model that includes incorporating concepts such as
those of Eckstrand, Hackett and Mayo, referred to as the PRISM (Figure 6.3) to help
in the training of SMMEs and large firms.
85
Figure 6.3: The PRISM model for training management
Source: (Cotterill, 2002:7)
The PRISM model entails the following:
a) Identifying training needs
The need for training never diminishes within an organisation, just as our needs are
insatiable. Individuals receive training when they are employed in an organisation.
Then they are trained to undertake the specific task for which they have been
86
employed and thereafter they will need further training to enhance their career
advancement. A hierarchy of training needs exists and would follow a pyramid, as
showed in Figure 6.4:
Figure 6.4: The hierarchy of training needs
Source: Cotterill (2002:8)
Training must be maintained in an organisation to keep employees' competencies
renewed as knowledge and skills become obsolete and also as new technology and
expertise are being introduced. The onus, however, lies with the organisation to
analyse and established which training is needed, when it is needed and whether it
adds value (Cotterill, 2004:9).
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b) Identifying competence gaps
The second step of the model, according to Cotterill (2004), involves identifying
competence gaps. Identification of competence gaps should take place before
training, because this helps to give the trainees the exact training they are looking for.
Different people or organisations have different competence levels and these must be
identified for proper implementation of a training programme to avoid training someone
in what he or she already knows.
Knowing the competence gaps enables the organisation and/or trainers to concentrate
on those areas. According to Cotterill (2004:10), gaps could be the following:
Organisational gap – where an organisation has procured new systems
which requires everybody within the organisation to learn to operate the
system;
Job-related gap – an employee would require training to be able to operate
new equipment or to take up a different position in an organisation; and
Individual gap – where an individual will require frequent training to remain
abreast of new technology and systems.
c) Setting training objectives
Cotterill (2004:11) explains that for any training programme to succeed, there must be
clear and concise objectives of such training, minimum competence levels for trainees
must be defined, and levels must be set that can be assessed to see whether the
organisation is achieving its aims.
Training also requires commitment from both the trainee and the employer or trainer.
The trainee should be willing to be trained to upgrade or improve his or her knowledge
and skills and the employer must also be willing to allow the employee the time to
attend the training. In addition, the employer should be willing to pay the cost of and
provide a conducive environment such as workshops and classrooms for the training
(Cotterill, 2004).
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Good administration of the training is also a requirement to enable the organisation to
keep track of what is happening in the training. The administration process should
include who the training provider should be, the length of the training, the aims and
objectives of the training, the method of evaluating the training and the success rate
of the trainees.
d) Securing or designing training programmes
The next step in the model is the securing or designing of the training programmes.
Training can be designed and implemented by utilising in-house expertise or it can be
out-sourced to specialist external training providers. It should be decided as to which
of these two would be used, and the decision should be made by taking cognisance
of the need to provide the organisation with value for money spent.
Determination of the appropriate method of implementation of the training programme
is highly recommended. It should be realised that not all people learn with the same
level of understanding; therefore in developing a training programme one has to
consider the following five principles relating to how adults learn:
Readiness – are the users ready to learn or is preparation work required?
Association – build upon existing skills, keep training in context.
Involvement – active participation is more effective than listening to
someone talk.
Repetition – aids memory, stresses importance of key points.
Reinforcement – positive, enthusiastic feedback from the trainer. Rewards
effort and always provides constructive feedback (Cotterill, 2004).
The training needs differ between departments and therefore when selecting or
designing a training programme, one should consider who the recipients are and what
they require. The training programmes should be varied to suit the intended recipients
where necessary and, where possible, a combination of different syllabi should be
considered in order to deliver the best results.
Cotterill (2004) again mentions that the selection of appropriate training material plays
a significant role in the training process. Selecting the right training materials for the
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right training assists in reinforcing what the trainers have learnt. Many of these can be
produced internally and, where possible, may be hired from the appropriate service
providers.
Common training materials include the following:
Audio visual aids:
Audio tapes
Video tapes
Projected slides or PowerPoint
Diagrams
Printed material:
Manuals
Workbooks
Handouts
Prepared flip-charts
Tools, machines and equipment:
Simulators
Workplace tools
Machinery parts (Cotterill, 2004)
e) Training methods
There are a plethora of methods of providing training: these can be classified as on-
the-job training and off-the-job training methods (Wood, 2004; Alipour et al., 2009).
These training methods include classroom training, distance learning, on-the-job
training, embedded training, simulator training, and computer-based training.
f) Providing training
The next step of the PRISM training model is the provision of training. According to
Cotterill (2004:18), setting up of clear and concise objectives for a training section is
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paramount to the successful implementation of the programme. Planning and
preparation are also very vital for training implementation, especially if it is an off-the-
job training programme. The planning process as explained by Cotterill (2004) must
also include the choice of a suitable venue, checking whether all training equipment is
working well and the selection of the right training materials.
The trainees see the trainer as a mentor; as such, the competence of the trainer should
not be doubted. The trainer must possess a high level of communication skills and
must be self-motivated. Equally, the trainer should be prepared and be abreast of the
topics to teach, be able to predict likely questions from the trainees and prepare
answers to the questions. The trainer must create and maintain a high-level of mutual
understanding between him- or herself and the trainees for facilitating proper
implementation of the programme.
Another factor that can impede proper provision of training is communication.
According to Cotterill (2004), training should not be conducted in a language that the
trainees do not understand. The trainer must assess the trainees’ ability to
comprehend the language being used. Cotterill (2004) advises that sometimes it would
be prudent to use some industry jargon to teach or explain some points to the trainees.
Training materials should be legible and clear for all trainees to understand them.
Yet another factor in the provision of training is the separation of work from training,
and, as Cotterill (2004:20) puts it, “It is important that ‘on-the-job’ training is not given
‘during the job’”, because this is likely to compromise the effectiveness of the training
as the trainees will be compelled to complete their day’s work and at the same time
grasp the training proceedings. It is therefore essential that training time be carefully
separated from work time to ensure proper implementation of programmes.
The trainer must also encourage trainees’ participation in the training implementation
as they enjoy lessons when they are made to take part in the lesson. This makes them
feel responsible and enhances their recall of what they have been taught.
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g) Evaluating the training
Evaluation of training programmes is one of the key stages of training. It enables the
stakeholders implementing the training to assess whether the training methods and
material used are benefiting the trainees. The trainers also get to know whether
trainees understand the training methods and, if not, then they have to re-evaluate
their training methodology for proper implementation. Evaluating the training
programme also assists in checking whether the training policy is being achieved and
whether the training gives value for money to the organisation (Cotterill, 2004:21).
Cotterill (2004:21) posits that evaluation can be done in the following ways:
Assessing the course by aiming at the learning that took place, checking
trainees’ attitude and behaviour on their jobs and/or the impact of training
results;
Assessing trainees’ learning levels and changing to suit them: this can be
done through setting of case studies, examinations, practically oriented
tasks, and interviews for trainees to measure their learning levels; and
Assessing trainees’ behaviour, either at work or during examinations, and
changing their behaviour levels.
h) Follow up training
If after evaluating the training programmes it is observed that the majority of the
trainees have difficulty with the assessment programmes, then there is a need for
follow-up training to be conducted. Follow-up training can be conducted by providing
trainees with their evaluation results and providing clarification on where
their answers were incorrect;
a re-training where a majority of the trainees answered incorrectly; and
refresher training to keep trainees up to date (Cotterill, 2004:22).
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6.4.4 Benefits of training and development
Training programmes have many benefits including those to the trainees. Benefits of
training as pointed out by Aguinis and Kraiger (2009:454-455) and Jehanzeb and
Bashir (2013:246–247) include the following:
Acquiring new skills which enhance job performance: Trainees’ innovative
and implicit skills are improved which in effect adds value to their work
outputs and therefore improves their career competencies;
Improving employees’ technical skills which in turn enhances their career
competencies;
Improving trainees’ declarative knowledge;
Trainees gaining self-confidence if they understand their job description
very well, which makes them want to stay in the organisation longer; and
Enhancement of the trainees’ behaviour of how to perform. Skills are taught
that boost self-confidence and self-reliance (Aguinis & Kraiger, 2009:454).
In addition, strategic knowledge helps trainees organise their work in order to complete
a task (Jong & Ferguson-Hessler, 1996:107). Aguinis and Kraiger (2009:454) describe
this as knowing when to apply specific knowledge or skills for a specific task. Self-
reliance boosts productivity, ensures profits for the organisation and means higher
salaries and bonuses for the employees.
Acquiring knowledge through training ensures employees’ consistency in their line of
work. Consistent performance results in trainees’ loving their job or work. It enhances
employees’ performance and satisfaction in their job.
In summary, as Jehanzeb and Bashir (2013: 246-247) point out, the benefits of training
of individuals result in an enhancement of career competencies, promote employee
satisfaction and ensure employee performance. The other benefits of training relate to
organisational performance. Even though there seems to be a paucity of literature on
the profits of training and development relative to organisational performance,
Jehanzeb and Bashir (2013:247–248) argue that some of the benefits include the
following:
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An improvement of the organisation's performance, because employees
develop their general knowledge and management skills; and
An improvement to the organisation’s productivity, sales, revenue and
generally their overall profit margins.
The other benefits to organisations which spend money on training is the retention of
employees. As rightly argued by Jehanzeb and Bashir (2013:248), when employees
are offered opportunities to improve their skills and knowledge through training, such
employees are likely to remain in the organisation. They contend that there is a solid
connection between employee training and development on the one hand, and
employee retention on the other. The retained employees subsequently become
experienced employees who, according to literature, are one of the greatest assets to
a company or organisation. Employee retention has been successful in companies
where training and development programmes have been designed and implemented
to the employees’ satisfaction (Jehanzeb & Bashir, 2013:248).
6.5 CONCLUSION
In this chapter the importance of CDPs was discussed in light of the standing of the
construction industry in the socioeconomic development of a country. It was observed
that CDP was important and should be undertaken because it is targeted at SMME
contractors which dominate the construction industry, critical to the social economic
development of a nation.
It was also noted that CDPs were critical because the SMME contractors needed key
skillsto match the demands of the construction industry. The construction industry
demands such key competencies therefore it is imperative for SMMEs to be developed
to match these. Literature reveals that entrepreneurs venturing into the industry must
possess technical, managerial and some generic competencies for them to survive
the fierce competition that exists in the industry. It is, however, noted that contractors,
especially the SMME contractors, are faced with some perennial challenges that
impede their development and sustainability, hence the need to train and develop the
contractors.
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Furthermore, the chapter discussed training and development, the idea of training and
development, and some models of training and development, and also explored some
training methods. Finally, the benefit of training and development to individuals and
organisations in general was reviewed in this chapter. Acquiring new skills, improving
technical skills, gaining self-confidence, improving organisations’ performance and
productivity were found to be among the benefits of training and development
programmes.
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CHAPTER SEVEN
RESEARCH METHODOLOGY
7.1 INTRODUCTION
This chapter outlines the design of how the research was conducted and the methods
which were employed to investigate the performance of CDPs in South Africa. In
addition, it presents the methods used to analyse and present the data.
7.2 RESEARCH DESIGN
The main objective of the research was to investigate the effectiveness of CDPs in
South Africa, and to establish the extent to which they have achieved their intended
goals. A review of literature was conducted on the performance of CDPs through
published articles in journals, books, peer reviewed documents and the Wide World
Web. South African and international literature were reviewed and the objectives of
the CDPs as well as their expected outcomes and the perceptions of beneficiaries on
the performance of the CDPs in the construction industry were described. This
information was intended to aid an understanding of how important CDPs are within
the context of the construction industry.
Based on the literature reviewed, structured interviews and a questionnaire survey
were conducted and the data collected from the questionnaire were analysed using
the SPSS software. The data obtained from the questionnaire sought to ascertain how
beneficiaries perceive the CDPs and their impact on the beneficiaries’ growth and
sustainability, while the interviews were conducted to triangulate and validate the
findings from the questionnaire.
7.3 RESEARCH TOOLS
7.3.1 Questionnaire
The questionnaire survey was adopted owing to its advantages as elaborated by Van
Vuuren and Maree (2008:281), which include, among others, that:
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it is the most inexpensive method to apply and can be distributed to a
broader spectrum of respondents at a price of only a postage stamp or an
electronic mail;
it promotes confidentiality owing to the fact that respondents are usually
anonymous and are willing to be open; the questionnaire survey was
suitable for the type of data being collected and also for answers to actual
questions; and
the respondents have the luxury of reading over the questions a number of
times in order to understand them before answering.
The questionnaire was designed in accordance with the objectives of the study, which
were to investigate the effectiveness of CDPs in South Africa and to establish the
extent to which they have achieved their intended goals. A questionnaire comprising
closed-ended questions was administered to SMME contractors and their views were
solicited on the effectiveness of CDPs in South Africa. In addition, the questionnaire
included open-ended questions which were designed to encourage the respondents
to express themselves freely in those instances. The objectives of the CDPs were
transposed into simple and unambiguous questions to minimise potential errors from
respondents. Questions from relatively similar topics were adopted from the literature
reviewed and were used as the basis for the draft questionnaire. The draft
questionnaire was discussed with the research supervisor who constructively criticised
and gave valuable advice and comments. The draft questionnaire was then revised
and discussed with the university’s statistical department (Statkon) to seek their
opinion on the content and suitability. The final questionnaire was developed after
Statkon’s input.
The questionnaire comprised four main headings:
Organisation’s details: This section comprising questions 1 to 12 was
designed to capture the data of the organisation the respondent
represented. Data such as the respondents’ gender, disability, racial
classification, age, their organisation’s CIDB grading before and after the
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CDP, and status with respect to whether they were minor, medium or macro
enterprises were captured in this section.
CDP implementation: In this section contractors’ views were solicited on
how the CDPs were implemented and whether the respondents believed
the execution process was to their expectations.
The third section was designed to capture information on contractors’
perception on CDPs, and whether they believe the CDPs were achieving
their intended objectives.
Part four of the questionnaire was an open-ended question which solicited
any other comments regarding the CDPs.
Respondents were asked the extent to which they agreed to each statement put to
them. Responses were either “Strongly agreed”, “Agreed”, “Disagreed” or “Strongly
disagreed” with the statements which were put to them. In addition, an option of
selecting “Not sure” was also included to the response type accorded to the research
participants. Weightings of 5,4,3,2 and 1 in descending order were allocated to each
response on an ordinal scale. Naoum (2007:93) describes an ordinal scale as merely
numerical labels and these do not indicate that the intervals between the scales are
equal, nor do they indicate that absolute quantities are used to rank the respondents’
responses.
7.3.2 The structured interview
In order to boost the rationality, strength and interpretative potential of the study
(Thurmond, 2001), interviews were also conducted. The questions for the structured
interviews were designed and presented in the same order and with the same wording
to all interviewees in accordance with the objective of the research. Again, the draft
questions for both consultants and graduate CDP contractors were discussed with the
research supervisor who reviewed them and gave valuable advice and commented on
them before they were administered. The objective for interviewing the consultants
was to establish their views on the performance improvement of contractors who had
undergone CDPs, if any, and also solicit their perspective on how mentorship could
be used for the betterment of CDPs, while the objective of interviewing the contractors
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was to establish their views on mentorship and whether there were mentorship
programmes in the CDPs they had undergone.
The advantages of structured interviews as explained by Naoum (2007:57) include the
following:
High chance of answers being more accurate;
Relatively high response rate; and
Exploring answers by finding out why the particular answers were given.
The first part of the interview questions was designed for the consultants and was
comprised of four main questions. The intention of these questions was to solicit views
on the performance of CDP graduate contractors. The questions sought specifically to
establish whether contractors’ performance had improved after undergoing CDPs and
what their views were on mentorship as a way of ameliorating contractors’
performance deficiencies.
The second set of interview questions was designed for CDP graduate contractors
and comprised seven main questions. The purpose of these questions was to elicit the
contractors’ opinion on mentorship programmes during and after CDPs and to
determine whether they believed that mentorship should be continuous until they were
able to sustain themselves.
7.4 DATA COLLECTION
A purposive sampling strategy was adopted for this research because the study had
adopted a multistage purposeful approach for which the sampling method was suitable
(Onwuegbuzie & Collins, 2007). Therefore the survey was aimed at contracting firms
listed with the CIDB in categories 1 to 7 and can be described as low, medium and
macro enterprises. These SMMEs were the targets of the CDPs. The sample was
obtained from the CETA online database in Johannesburg.
In addition, the office of the Department of National Public Works in Pretoria was
contacted for contact details of contracting firms who had undergone their CPD
training with the EPWP.
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Other respondents were obtained through links with Eskom’s training academy,
Khuthaza, Gauteng Department of Transport’s Maintenance sections and the CIDB’s
contractors’ registration register. The researcher’s networks within the construction
industry were also utilised to reach out to more potential respondents.
Contractors with CIDB grading designations of between 1 and 7 were the main targets
for inclusion in the sample because the CDPs were designed for this category of
contractors. Questionnaires were delivered to respondents’ offices in person and in
most cases the researcher waited for the questionnaires to be completed and handed
back. This approach was taken in order to increase the response rate to the
questionnaires. However, a few of the questionnaires were emailed to respondents
and were returned via electronic mail.
A total of 128 questionnaires were distributed to respondents and 103 questionnaires
were received from the respondents, translating to a response rate of 80 per cent.
According to Baruch and Holtom (2008), Nulty (2008) and Fincham (2008), a response
rate of 80 per cent is acceptable for a survey.
Furthermore, a total of 10 consultants and 12 graduate CDP contractors were
interviewed. The consultants comprised seven quantity surveyors, one architect, one
architectural technologist and one civil engineer. The contractors were made up of
three CIDB Grade 3 contractors, five CIDB Grade 4 contractors and four CIDB Grade
5 contractors.
7.5 RELIABILITY AND VALIDITY
It was important to assess the reliability and the validity of the instrument used to
collect data because statistical measurement fundamentally depends on them.
Therefore the Cronbach’s alpha coefficient was used to measure the internal
consistency of the survey instrument. Cronbach’s alpha coefficient, according Miller
(1986:2), is used during the scale development with items that have several response
options such as the agreement scale ranging from ‘Strongly Disagree’ to ‘Strongly
Agree’ as was the design of the questionnaire for the current study.
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According to Brown (2002:17), the Cronbach’s alpha index ranges from 0 to 1. Brown
(2002:17) further explains that if the Cronbach’s alpha for a set of scores turns out to
be 0.90, that can be interpreted as meaning that the test is 90 per cent reliable, and
by implication that it is 10 per cent unreliable (100% – 90% = 10%). However,
Cronbach’s alpha coefficient of 0.7 is usually in the high acceptable range. Table 7.1
shows a Cronbach’s alpha coefficient of 0.956, which, according to Brown (2002), is
96 per cent reliable.
Table 7.1: Cronbach’s Alpha Coefficient
NUMBER OF QUESTIONS CRONBACH ALPHA COEFFICIENT
40 0.956
Reliability is the extent to which a questionnaire, test, observation or any measurement
procedure produces the same results on repeated trials (Miller, 1986:1). It is the
degree to which a measurement technique can be depended upon to secure
consistent results upon repeated application (Weiner, 2007). This aspect is critical in
part to the notion of generalisability of results.
In terms of validity, Miller (1986:3) posits that it is the extent to which the survey
instrument measures what it purports to measure. Weiner (2007:20) adds that validity
reflects those errors in measurement that are systematic or constant. There are
different aspects of validity, but for the purpose of this study validity was limited to
content validity and in order to ensure it, repeat questions and the interviews were
implemented (Golafshani, 2003).
Content validity pertains to the degree to which the instrument fully assesses or
measures the construct of interest and where items included in the measure
adequately represent the universe of questions that could have been asked (Weiner,
2007:22).
As stated, the internal consistency index in the form of Cronbach’s alpha coefficient
was used as the measure of reliability. A positive aspect of an internal consistency
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index of reliability is that it is assessed after only one test administration and
consequently avoids the problems associated with testing over multiple time periods
(Miller, 1986:2).
7.6 RATING SCALE
Weights were assigned to each answer choice as ‘Strongly agree’ = 5, ‘Agree’ = 4,
‘Disagree’ = 3, ‘Strongly disagree’ = 2 and ‘Not sure’ = 1. This rating scale was adopted
because it has been used in many studies and was also deemed suitable for the type
of study and data collected in the current research. It is supported by Svensson
(2001:43) who contends that rating scales are usually applied to measure qualitative
variables such as beliefs, positions, perceptions and many other behavioural
variables.
In order to determine and interpret the rating scale, the indices were calculated as
follows:
X1W1 + X2W2 + X3W3 ……………………XnWn
∑(𝑋1𝑊1+ 𝑋𝑛𝑊𝑛)
where: W = weight of answer choice;
X = response count for answer choice.
Source: (http://www.surveymonkey.com)
7.7 THE CORRELATION BETWEEN CDPs AND THEIR OUTCOMES
One of the main aims of the study was to determine whether a relationship existed
between contractor improvements with the CDP training of concerned contractors.
Therefore correlations between CDPs and the expected outcomes were measured.
For instance, the correlations between the CDPs and the improvement of
management skills, the CDPs and contractor upgrade, the CDPs and promotion of the
participation of companies belonging to PDIs, and the CDPs and contractor
satisfaction were calculated using the t-test: paired two sample for means using a
significance level of 0.05 per cent.
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The CDPs and their outcomes were correlated using the weighted average ratings.
The p-values were calculated to discover whether there was any significant correlation
between the CDPs and their intended objectives.
Gelman (2013) explains p-value as being a measure of the discrepancy of the fitness
of the null hypothesis and is calculated to measure whether the trial results are likely
to have occurred simply through chance. With p-values less than 0.05, the results from
the study are statistically significant. In brief, if the p-value is less than 0.05, then the
null hypothesis must be rejected: conversely, if the p-value is greater than 0.05, then
the null hypothesis is accepted (De Winter, 2013; Thisted, 2010; Goodman, 2008).
Otherwise, the p-value can range from 0 (chance) to 1 (total certainty).
7.8 CONCLUSION
In this section of the dissertation, the design and description of methods of data
collection were discussed. Structured interviews and self-administered questionnaires
designed and based on literature reviewed as tools for the research used in collecting
data were discussed. These tools were selected because they were found to be
appropriate for the study. Data was analysed using the SPSS software. Cronbach’s
alpha coefficient and the rating scale were used to measure the reliability and validity
of the data collected respectively. The correlation between the inputs of CDPs and the
intended outputs was calculated using the t-test paired two sample for means using a
significance level of 0.05 per cent. Based on the data collected and analysed using
the methods described in the current section, chapter eight discusses the results
thereof.
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CHAPTER EIGHT
PRESENTATION OF RESULTS
8.1 INTRODUCTION
This chapter presents the results of the survey. It builds upon the research methods
and approaches discussed in Chapter 7. The data received from the survey were
analysed and the results are presented in this chapter.
The aim of this chapter is to present results from the analysis of the responses
received from the respondents. The first part of this chapter presents the results of the
profile of the respondents to the questionnaire. In order to understand the background
of the respondents, this part of the chapter categorises the respondents according to
their gender, disability status, ethnicity, age, and number of employees and their CIDB
grading before and after training. .
The second section of this chapter presents results on how contractors perceive CDPs
by using descriptive statistics. First, it presents the results of respondents’ perceptions
of the mentors and trainers of these CDPs and how they implemented the
programmes. Second, it presents results on the impact of the CDPs on management
skills’ improvement of the respondents. The third part presents results of the
respondents’ rating of CDPs regarding their impact on contractors’ upgrade. Fourth,
the findings on the respondents’ ratings on CDPs’ contribution towards promoting the
participation of PDIs in construction are presented. Finally, the respondents’ overall
ratings of the CDPs are presented.
The third section of this chapter presents results from the structured interviews. The
first sectionpresent results on the consultants’ perceptions of CDPs and contractors’
performance improvement. Secondly, contractors’ views on mentorship in CDPs are
discussed and an attempt is made to deduce the influence of mentorship on
contractors’ CIDB grading.
The data were analysed using SPSS and the outcomes are presented in tables, charts
and figures to address the research objectives which were the folllowing:
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To investigate the extent to which CDPs have helped in improving
contractors’ management skills;
To investigate the extent to which CDPs have ensured contractors’ upgrade
in CIDB registration status;
To examine the relationship between CDPs and the achievement of an
increased participation of PDIs/organisations in the construction industry;
and
To establish how beneficiaries of the CDPs rate these CDP programmes.
8.2 RESPONDENTS’ PROFILES
To understand the background of the respondents, their gender, disability status,
ethnicity, age and number of employees were sought and are presented below.
The gender distribution of the respondents was reflective of the anecdotal evidence
regarding the nature of the construction industry where it is believed that there are
more males than females. The results show that male respondents accounted for 71
per cent and the female respondents accounted for 29 per cent. In terms of people
living with disabilities and their participation in the industry, 28 per cent of those who
participated in the research indicated that they lived with disabilities or had some kind
of physical disability, whereas 72 per cent indicated that they had none. Equally, 78
per cent of the respondents regarded themselves as PDIs. Most of the respondents
(73%) were in the age group of 18 to 45 years, with 27 per cent being between the
ages of 46 and above. The survey revealed that 59 per cent of the companies
represented in the study belonged to the small-industry category while 22 per cent
were in the micro-industry category and 18 per cent fell under the medium-size
category.
The participants were therefore found to be largely reflective of the current status of
the industry. It is male dominated and most of the respondents belong to SMME
organisations. Equally, the respondents were of the categorised PDI group, black and
young, and falling in the 18 to 45 age group.
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8.3 RESULTS
8.3.1 Implementation of CDPs
The respondents were requested to rate how the CDPs were implemented and
whether they thought the CDPs were achieving their intended goals. The results from
the survey indicated an average weighted mean of 4.30 overall on the implementation
of CDPs (Table 8.1). This value was below the 4.5 rating which leans more to the
‘Strongly agree’ rating. However, the majority of the respondents agreed that the CDPs
were implemented according to their expectations. Over 90 per cent of the
respondents either ‘Agreed’ or ‘Strongly agreed’ to CDPs being implemented properly
and to their satisfaction. The respondents rated highly, at 4.56, the statement that “the
trainers delivered and explained the training clearly”. The least rated statement, at
4.14, was that there was a single point of contact and the CDP barely met the training
objectives. This was rated at 4.17, making it the second-lowest rating. The majority of
the respondents, namely 81 per cent, simply ‘Agreed’ with the statement that the
training met the intended objectives (Table 8.1).
Table 8.1: Implementation of CDPs
ID Implementation of CDP Weighted average rating
Ranking
1 The trainers delivered and explained the training clearly 4.56 1
2 The time allowed for the classroom work was appropriate
4.43 2
3 Continuous mentorship will be very helpful to successful CDP implementation
4.35 3
4 The site work was adequate 4.32 4
5 The materials given at the training were effective and helpful
4.31 5
6 The training was scheduled and communicated clearly 4.27 6
7 The training was executed according to the predetermine schedule
4.26 7
8 The mentoring processes were helpful 4.21 8
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9 The training met the set objectives 4.17 9
10 There was a single point of contact for communication between trainers and trainees
4.14 10
8.3.2 Results on improvement of management skills
The first objective was to investigate the extent to which CDPs have helped in
improving contractors’ management skills. To achieve this, a number of questions
derived from the literature were used as indicators in the questionnaire. A weighted
average rating of 4.38 was achieved for the CDPs’ improvement of contractors’
managerial skills which slightly leaned towards ‘Agree’. As seen in Table 8.2, the
results showed that most respondents either ‘Agreed’ or ‘Strongly agreed’ with the
assertion that the training improved their management skills, with over 90 per cent of
the respondents indicating this. However, the total average rating was determined to
be 4.38, indicating a leaning towards ‘agreeing’ as opposed to ‘Strongly agree’. Most
of the respondents indicated that the training had given them more confidence in
management skills; 76 per cent of the respondents ‘Strongly agreed’ with this
statement and it was rated at 4.75. However, respondents did not think that the training
had necessarily enabled them to complete projects on time and within budget as only
62 per cent ‘agreed’ with the assertion (Table 8.2).
Table 8.2: Improved management skills
ID Improved Management Skills Weighted average rating
Ranking
1 The training has given me more confidence on my managerial skills
4.75 1
2 The training has enhanced my knowledge on financial planning
4.49 2
3 The training has broadened my knowledge on project planning
4.38 3
4 The training has assisted me to complete projects within project budget
4.33 4
5 The training has improved my knowledge on estimating and tendering
4.33 4
6 The training has enhanced my knowledge on effective quality control
4.31 5
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7 The training has enhanced my confidence in contract laws and claims
4.29 6
8 The training has improved my ability to market my services to clients
4.28 7
9 The training has enabled me to complete projects within the contract period
4.27 8
Average weighted mean 4.38
8.3.3 Results on contractor upgrades
The second objective was to investigate the extent to which CDPs have ensured
contractors’ upgrade in CIDB registration status. A number of questions were asked
to assist with achieving this objective. Results showed an overall weighted mean rating
of 4.42, which indicated that respondents agreed that they had seen an improvement
in their registration grading (Table 8.3). Over 90 per cent of the respondents indicated
that they had seen an improvement in their CIDB status after training. Similarly, as
depicted in Figure 8.1, 8 per cent of the companies represented by the respondents
were registered in Grade 1 before the CDP, but this changed to 1 per cent after the
CDP, indicating a drop in numbers, and hence suggesting an upgrade with many of
the contractors leaving their lower grades. This was also the case for those who had
indicated that they had been registered in Grade 2. About 50 per cent of the
respondents indicated that they had been registered in Grade 2 before CDP, but this
statistic changed to 10 per cent after training completion; 31 per cent had Grade 3
before CDP, but this figure changed to 46 per cent after CDP. Grade 4 companies
were at 7 per cent before CDP, but improved to 24 per cent on completion from CDP;
again, there were 2 per cent of Grade 5 companies before CDP but this figure
increased to 13 per cent after CDP, Grade 6 had 1 per cent before CDP, but improved
to 3 per cent after training completion, Grade 7 companies made up 1 per cent before
CDP, and this too changed to 2 per cent and finally, 1 per cent of the companies were
able to attain Grade 8 after graduation from CDPs.
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Table 8.3: Contractor upgrade
ID Contractor Upgrade Weighted average
rating
Ranking
1 The training has helped me improved my CIDB grading
4.60 1
2 The training has enabled me the opportunity to bid for bigger projects
4.48 2
3 The training has enabled my company to increase the number of employees
4.43 3
4 The training has assisted in the growth of my company’s income
4.30 4
5 The training has helped my company in getting consistent work flow
4.29 5
Average weigthed ean 4.42
The movement in the percentage registrations, namely from high to low percentages
in the lower categories and low to high percentage in the higher categories, seemed
to indicate an improvement in registrations after undergoing the CDP as indicated in
figure 8.1:
Figure 8.1: CIDB grading before and after CDP
Grade 1 Grade 2 Grade 3 Grade 4 Grade 5 Grade 6 Grade 7 Grade 8
Before CDP 8% 50% 31% 7% 2% 1% 1%
After CDP 1% 10% 46% 24% 13% 3% 2% 1%
0%
10%
20%
30%
40%
50%
60%
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8.3.4 Results on participation of previously disadvantaged individuals
The third objective of the study was to examine the relationship between CDPs and
the achievement of an increased participation of PDI’s/organisations in the
construction industry. A total of five questions were asked to characterise the level of
participation prior to and post CDP training. The results showed an overall weighted
mean of 4.37 which leans more to ‘Agreed’ rather than ‘Strongly agreed that the CDP
enhanced their participation in the construction industry (Table 8.4). The results also
showed that the training programme assisted the beneficiaries in being registered with
the CIDB. Access to register with the CIDB was rated the highest at 4.54 and the least
rated aspect at 4.22 was the enhancement of tendering for projects that they could not
have bid for previously (Table 8.4).
Table 8.4: Participation of PDIs
ID Participation of PDIs Weighted average rating
Ranking
1 The training has given me access to register with CIDB
4.54 1
2 The training has afforded me the opportunity to get more contracts
4.49 2
3 The training has encouraged clients to pay me promptly to boost my cash flow
4.35
3
4 The training has given financial institutions the confidence to assist me
4.24 4
5 The training has enhanced my chances of tendering for jobs that I couldn’t have tendered for
4.22 5
Average weighted mean 4.37
8.3.5 Results on contractor satisfaction with the CDPs
The final objective of this study was to establish how beneficiaries of the CDPs rate
these CDP programmes. A total of 11 questions as depicted in Table 8.5 were asked
in order to assist with achieving this objective. The results showed a weighted average
rating of 4.31. Generally most of the respondents were somewhat satisfied with the
CDPs, albeit not so strongly, as the overall weighted mean rating was lower than 4.5,
namely at 4.31. Of interest were the ratings on whether the training specifically met
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the beneficiaries’ expectations. About 51 per cent of the respondents ‘Agreed’ that the
training had met their expectations and rated it at 4.49. As for the method of training,
more respondents were of the view that online training could not have been the best
method of delivery. The rating was 3.71 which leans towards ‘Disagreeing’ rather than
‘Agreeing’. Further, the responses to the three critical questions were not very
convincing and perhaps remain moot. The responses to: “The training programme is
worth the cost of attending; I will be attending the training in future and I will definitely
recommend the training to someone else”, were rated at 4.33, 4.32 and 4.42
respectively. Most of the respondents did not ‘Strongly agree with those statements.
About 65 out of the 103 respondents, representing 63 per cent, ‘Agreed’ that the
training was worth the cost; 62 out of the 103 respondents (60%) also ‘Agreed’ that
they would be attending similar training in future and 56 respondents (54%) ‘Agreed’
that they would definitely recommend the training to someone else. Considering the
benefits that such training would bring, the response regarding recommending to
others was expected to be ‘Strongly agree’.
Table 8.5: Contractor satisfaction
ID Contractor Satisfaction Weighted average rating
Ranking
1 The training would have been better delivered through the Internet
3.71 1
2 The training has enhanced my relationship with my clients
4.50 2
3 The training programme generally met my expectations 4.49 3
4 The training has helped improved my relationship with my employees
4.46 4
5 I will definitely recommend the training to someone else 4.42 5
6 The training has enhanced my understanding of the construction environment
4.40 6
7 The training has helped me reduced complaints about the quality of my work
4.38 7
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8 The training programme is worth the cost of attending 4.33 8
9 The training was conducted according to our individual experience
4.33 8
10 I will be attending training in future 4.32 9
11 The training has assisted me to avoid penalties due to late completion of work
4.13 10
Average weighted mean 4.31
8.3.6 Value addition of the development programmes
In addition to finding out whether respondents would recommend the training to others,
the other questions put to them concern the value addition of the CDPs. The
respondents were asked to indicate whether the CDPs had added value. The
respondents were requested to give a simple ‘Yes’ or ‘No’ answer. Figure 8.2 shows
that 97 per cent of the respondents did not think that the CDPs were a waste of time.
Generally, most of the respondents felt that the CDPs had added value.
Figure 8.2: Response on whether CDPs were a waste of time
The response to a follow-up open-ended question showed that 59 per cent of the
respondents felt that there has to be provision of financial assistance in order to
improve the efficacy of the programmes. A further 49 per cent of the respondents
indicated that the CDPs required improvement to ensure significant benefit. Other
comments made by the respondents were that some of them were unable to obtain
financial assistance from financial establishments and in their view that situation
rendered the CDPs to be unhelpful.
No, 97%
Abstain, 3%
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Still on the question of the CDPs’ being helpful, respondents noted that the onsite
training programmes must be conducted by the same people who had initially
conducted the classroom training to ensure consistency. Respondents noted that the
conflicting approaches in the methodology of training when the two were conducted
by different institutions impacted negatively on the effectiveness of the training
programmes. In summary, respondents indicated that the CDP programmes were not
a waste of time and actually did add value to them. However, the respondents felt that
provision of finance and the methodology of training delivery needed to be improved
if the CDP’s were to be of help.
8.4 RESULTS FROM THE INTERVIEW
This section of the chapter presents the results of the interviews conducted on
consultants and contractors. The intention was to solicit consultants’ views on
contractors’ performance improvement after CDPs and also contractors’ views on
mentoring programmes in CDPs. Furthermore, this section looked at the individual
CDPs reviewed in Chapter 2 to assess whether there were any relationships between
their implementation processes and learners’ migration in their CIDB grading. The
results were as follows:
8.4.1 Consultants’ responses on CDPs and contractors’ performance
The results from the survey indicated that majority of the consultants interviewed
(90%) said that they had worked with SMME contractors who had undergone CDPs.
However, most (about 70%) of these consultants believed that contractors’
performance had not improved. As to the possible interventions that could be used to
improve the goals of the programmes, all the consultants (100%) interviewed believed
that a long-term mentorship process could be used to improve contractors’
performance. Furthermore, the majority (80%) of the interviewees believed that
mentorship must be compulsory if at all meaningful contractor development was to be
realised.
8.4.2 Contractors’ views on long term mentorship
The first question to the contractor interviewees was to find out whether they had
undergone or enrolled for a mentorship programme. Findings were that most (83%) of
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the contractors said that they had not undergone any mentorship programmes.
Interestingly, most of the contractors (83 %) knew or had heard about mentorship
during their time at the CDPs.
With regards to the administration of the mentorship programme for those who had
previously enrolled for the programme, 42 per cent of the interviewees said that they
had had to pay for enrolling in the mentorship programmes. The interview also
revealed that there was a requirement to pay for the mentorship, but some of the
programmes were subsidised. A few of the interviewees (25%) said that the
mentorship programmes that they had enrolled for were subsidised, whereas 33 per
cent said that theirs had been free.
According to many contractors (83%) who had undergone some sort of mentorship
programme, they said that the improvement in their CIDB grading could be attributed
to the mentorship, while 17 per cent said that they had not seen any improvement in
their CIDB grading. It was also observed that most of the contractors (58%) would not
mind adding their mentors as signatories to their bank accounts if that would allow
financial institutions to provide them with financial assistance, while 42 per cent
indicated that they would not sacrifice their privacy for financial assistance. It was,
however, noteworthy that most of the interviewees (75%) believed that mentorship
programmes provided value for money. Statements such as “the mentorship
programme was worth paying for” referred to the fact that interviewees considered the
programme valuable. On the other hand, about a quarter of the contractors did not
believe that the programmes gave them value for their money.
8.5 IMPACT OF THE MENTORSHIP PROGRAMME ON CONTRACTORS’ CIDB GRADING
This section of the chapter compares the movement in contractors’ CIDB grading of
the individual CDPs implemented in South Africa. An attempt was made to verify
whether there was any linkage between the CDPs that had mentorship programmes
and the movement in the CIDB grading.
Figure 8.3 shows the overall movement in contractors’ CIDB grading in the CDPs
reviewed. One hundred per cent of the respondents from Eskom’s construction
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academy indicated that they had had a higher CIDB grading. Eighty-six per cent of the
respondents from the SCI programme also responded that they had seen an upgrade
in the CIDB grading whereas 72 per cent from the EPWP-Vuk'uphile Learnership
Programme had some upgrade in their CIDB grading. Sixty-three per cent of
respondents from Masakhe CDP and 60 per cent from Khuthaza Contractor
Development had all seen some upgrades in their CIDB grading, with 57 per cent of
the respondents for both Vukuzakhe CDP and others stating that they had seen some
upgrades as depicted in Figure 8.3.
Figure 8.3: Percentage of migration in CIDB grading
8.5.1 Migration in CIDB grading in Vukuzakhe Contractor Development Programme
Critically analysing the contractor’s migration from a lower CIDB grading to higher
grading revealed that a fair percentage of the contractors who had undergone the
Vukuzakhe CPD had upgraded their CIDB grading with a total of 57 per cent of
upgrades. Table 8.6: Migration in CIDB grading in Vukuzakhe CDP shows that 36
per cent of the respondents who had undergone this CDP had migrated from CIDB
grading 1 to 2. Fourteen per cent of the respondents had migrated from CIDB grading
2 to 3 while 7 per cent upgraded from Grade 3 to Grade 4. However, 43 per cent did
not upgrade or did not state whether they had upgraded.
0%
20%
40%
60%
80%
100%
120%
Vukuzakhe Masakhe Vuk'uphile Khuthaza SEDA Eskom Others
Percentage of Migration in CIDB Grading
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Table 8.6: Migration in CIDB grading in Vukuzakhe CDP
Frequency % of Upgrade
No. of entrants 14
Upgrade from Grade 1 to 2 5 36%
Upgrade from Grade 2 to 3 2 14%
Upgrade from Grade 3 to 4 1 7%
Upgrade from Grade 4 to 5 0 0%
Upgrade from Grade 5 to 6 0 0%
Upgrade from Grade 6 to 7 0 0%
Did not upgrade or state anything 6 43%
Total no. of upgrades 8 57%
8.5.2 Migration in CIDB upgrade in the Masakhe Contractor Development Programme
There were some upgrades in the CIDB grading of companies represented by the
respondents of the survey. The percentage for the total upgrade was 63 per cent.
Table 8.7: Migration in CIDB grading in Masakhe CDP indicates that 13 per cent of
the contractors indicated that they had migrated from CIDB grading 1 to 2. Thirty-eight
per cent had migrated from CIDB grading of 2 to 3, while 13 per cent had upgraded
their CIDB grading from 3 to 4. A total of 38 per cent of respondents did not upgrade
or did not state anything, as depicted in Table 8.7: Migration in CIDB grading in
Masakhe CDP7.
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Table 8.7: Migration in CIDB grading in Masakhe CDP
Frequency % of Upgrade
No. of entrants 8
Upgrade from Grade 1 to 2 1 13%
Upgrade from Grade 2 to 3 3 38%
Upgrade from Grade 3 to 4 1 13%
Upgrade from Grade 4 to 5 0 0%
Upgrade from Grade 5 to 6 0 0%
Upgrade from Grade 6 to 7 0 0%
Did not upgrade or state anything 3 38%
Total no. of upgrades 5 63%
8.5.3 Migration in CIDB upgrade in EPWP-Vuk'uphile Learnership Programme
Respondents who underwent the Vuk’uphile Learnship Programme showed some
improvement in the CIDB grading with a 72 per cent upgrade. Twenty per cent of the
learners indicated that they had migrated from CIDB grading 2 to 3; while 32 per cent
of the learners had migrated from grading 3 to 4. As indicated by Table 8.88, 12 per
cent had upgraded their CIDB Grade from 4 to 5 while 8 per cent upgraded from 5 to
6. However, 28 per cent of respondents did not upgrade or did not state anything in
the survey.
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Table 8.8: Migration in CIDB grading in Vuk'uphile CDP
Frequency % of Upgrade
No. of entrants 25
Upgrade from Grade 1 to 2 0 0%
Upgrade from Grade 2 to 3 5 20%
Upgrade from Grade 3 to 4 8 32%
Upgrade from Grade 4 to 5 3 12%
Upgrade from Grade 5 to 6 2 8%
Upgrade from Grade 6 to 7 0 0%
Did not upgrade or state anything 7 28%
Total no. of upgrades 18 72%
8.5.4 Migration in CIDB upgrade in Khuthaza Contractor Development Programme
Table 8.9:9 indicates that 40 per cent of the contractors who underwent the Khuthaza
CDP had upgraded the CIDB grading from 1 to 2 and 20 per cent had migrated from
CIDB grading 3 to 4. A total of 60 per cent upgrade was observed while 40 per cent
did not upgrade or did not state anything.
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Table 8.9: Migration in CIDB grading in Khuthaza CDP
Frequency % of Upgrade
No. of entrants 5
Upgrade from Grade 1 to 2 2 40%
Upgrade from Grade 2 to 3 0 0%
Upgrade from Grade 3 to 4 1 20%
Upgrade from Grade 4 to 5 0 0%
Upgrade from Grade 5 to 6 0 0%
Upgrade from Grade 6 to 7 0 0%
Did not upgrade or state anything 2 40%
Total no. of upgrades 3 60%
8.5.5 Migration in CIDB upgrade in SCI Programme
As shown in Table 8.10, 18 per cent of the contractors who underwent the SEDA (SCI)
had increased their CIDB grading from Grades 2 to 3, 50 per cent upgraded from
Grades 3 to 4, with 14 per cent indicating that they had migrated from 4 to 5 and
another 5 per cent showed movement from Grade 5 to 6. However, 14 per cent did
not upgrade or did not state anything.
Table 8.10: Migration in CIDB grading in SEDA CDP
Frequency % of Upgrade
No. of entrants 22
Upgrade from Grade 1 to 2 0 0%
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Upgrade from Grade 2 to 3 4 18%
Upgrade from Grade 3 to 4 11 50%
Upgrade from Grade 4 to 5 3 14%
Upgrade from Grade 5 to 6 1 5%
Upgrade from Grade 6 to 7 0 0%
Did not upgrade or state anything 3 14%
Total No. of upgrades 19 86%
8.5.6 Migration in CIDB upgrade in Eskom Construction Academy
The results of the upgrades in the Eskom Construction Academy’s graduates were
that 38 per cent had shown movement by upgrading from Grade 4 to 5. At least 25 per
cent of the learners had migrated from Grade 5 to 6 while another 38 per cent indicated
that they had migrated from CIDB Grade 6 to 7, as depicted in Table 8.111
Table 8.11: Migration in CIDB grading in Eskom CDP
Frequency % of Upgrade
No. of entrants 8
Upgrade from Grade 1 to 2 0 0%
Upgrade from Grade 2 to 3 0 0%
Upgrade from Grade 3 to 4 0 0%
Upgrade from Grade 4 to 5 3 38%
Upgrade from Grade 5 to 6 2 25%
Upgrade from Grade 6 to 7 3 38%
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Did not upgrade or state anything 0 0%
Total no. of upgrades 8 100%
8.5.7 Migration in CIDB upgrade in other construction development programmes
Table 8.122 shows that the contractors who had undergone other CDPs also showed
some improvements in the CIDB grading. Twenty-nine per cent indicated that they had
moved from Grade 1 to 2, 5 per cent had upgraded from CIDB Grade 2 to 3, 19 per
cent migrated from CIDB Grade 3 to 4 and 5 per cent upgraded from CIDB grading 6
to 7. However, 43 per cent of the respondents did not upgrade or did not state anything
in the survey.
Table 8.12: Migration in CIDB grading in others CDP
Frequency % of Upgrade
No. of entrants 21
Upgrade from Grade 1 to 2 6 29%
Upgrade from Grade 2 to 3 1 5%
Upgrade from Grade 3 to 4 4 19%
Upgrade from Grade 4 to 5 0 0%
Upgrade from Grade 5 to 6 0 0%
Upgrade from Grade 6 to 7 1 5%
Did not upgrade or state anything 9 43%
Total no. of upgrades 12 57%
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8.6 CONCLUSION
The aim of CDPs was to create an enabling environment for SMME companies
belonging to PDIs, women, the youth and people living with disabilities. The
demographic data analysed suggested that most of the entrants to the CDPs fell into
those categories. Most of the firms surveyed fell within the SMME category and they
also have CIDB gradings ranging from 1 to 7 which is also a requirement for entrance
to the programmes.
In addition, most of the respondents surveyed were youth and also previously
disadvantaged, with Africans being in the majority. There still remains the historical
male-female dichotomy in the construction industry as those reflected in the data
analysis revealed the number of males exceeding that of females. The other issue that
still exists and is exposed in the analysis is that the representation of people living with
disabilities involved in construction is still low.
In the analysis of respondents’ perceptions on the implementation of the CDPs,
whether the CDPs are helping improve their management skills, whether the CDPs
enhance contractor upgrade, whether the CDPs encourage PDI participation and
whether the respondents were fairly satisfied with the programme, the responses
could be termed as fairly positive with some gaps which all stakeholders must consider
for the future improvement of the CDPs.
However, the interviews conducted revealed some interesting scenarios. The majority
of consultants believed that contractors’ performance had not changed, even after
undergoing these CDPs, and they agreed that mentorship after graduation would
assist in mitigating contractors’ performance deficiencies.
Most of the contractors interviewed claimed that mentorship was useful to their
sustainability, but not all of them had had the chance to undergo mentorship, either
because they were not introduced to it or they believed the process was expensive.
The survey also revealed that there was some kind of relationship between CDPs that
had mentoring programmes and the migration of contractors from lower CIDB grading
to higher grading of learners or graduates. There were correlations between the CDPs
122
that had mentoring and continuous mentoring processes and the migration from a
smaller CIDB grading to a higher grading.
These findings presented in the current chapter are discussed further in the next
chapter to derive meaning and also to compare with other known knowledge on the
matter.
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CHAPTER NINE
DISCUSSION OF THE RESULTS
9.1 INTRODUCTION
The purpose of the study was to investigate the effectiveness of CDPs in general with
a view to contributing to their improvement. The research’s primary objectives were
(a) to investigate the extent to which CDPs have helped in improving the contractors’
management skills; (b) to investigate the extent to which CDPs have ensured
contractors’ upgrade in CIDB registration status; (c) to examine the relationship
between CDPs and the achievement of an increased participation of
PDIs/organisations in the construction industry; and (d) to establish how beneficiaries
of the CDPs rate these CDPs.
9.2 QUESTIONNAIRE SURVEY RESULTS
The findings as regards each objective are presented below.
9.2.1 Improvement of management skills
The first objective was to investigate the extent to which the contractor development
programmes have helped in improving contractors’ management skills.
The findings from the survey revealed that most of the respondents felt that the CDPs
had slightly ameliorated SMME contractors’ management skills. However, the findings
on the ratings on some individual questions pertaining to their management skills
indicated a not so satisfactory level. The contractors’ responses regarding their
knowledge on estimating and tendering, project planning, contract law and claims and
on marketing were all rated a little below average and could not be regarded as
satisfactory.
These findings including those from the consultants interviewed who indicated that
there was no significant improvement in the contractors’ management skills or
performance. These findings were similar to those found by Ntuli and Allopi (2013),
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Greylings (2012), Smallwood (2010) and Mbachu and Nkado (2006) who noted that
SMME contractors still lacked some basic construction and management skills.
The study revealed that even though the CDPs had enabled the improvement of some
of the contractors’ management skills, there still remained much work to be done to
improve the contractors’ management skills. These findings were supported by
literature reviewed on CDPs internationally.
9.2.2 Contractor upgrades
The second objective was to investigate the extent to which the contractor
development programmes have ensured contractors’ upgrade in CIDB registration
status.
The findings in the study were that the CDPs might have translated into some
contractor upgrade in their CIDB registration status. However, these findings were in
sharp contrast to the profile of the CIDB contractors’ register which revealed that there
was a large number of contractors at the bottom of the CIDB grading pyramid, and
that there is very little upward movement of contractors from the lower categories
(CIDB; 2009, 2011 & 2013).
The responses to individual statements such as “the CDPs have assisted in the growth
of contractors’ companies” and “the CDP have assisted in companies getting
consistent work flow” were noted to be below average. This finding was consistent
with literature on South Africa which indicates that many contractors were downgraded
in terms of their CIDB grading owing to failure to ensure consistent work flow
(Greylings, 2012).
The favourable response to the question of the CDP giving contractors the opportunity
to tender for bigger projects was noted. The explanation for this positive rating might
be due to the allowance by the CIDB for the PDI contractors with a ‘potentially
emerging’ status to tender for projects one stage higher than their stipulated stage
(CIDB, 2013).
125
Literature on the South African construction industry with specific reference to
contractor registration shows that many SMME contractors dominate the bottom half
of the CIDB grading pyramid (CIDB, 2013). It would appear therefore that the CDPs
have not necessarily assisted in contractor upgrades.
9.2.3 Participation of PDIs
The third objective of the study was also to examine the relationship between the
CDPs and the achievement of an increased participation of companies belonging to
PDIs.
The findings from the survey revealed that most of the respondents actually felt that
the CDPs have ensured an increased participation of these beneficiary companies
belonging to PDIs.
However, with access to funding being the main obstacle to the participation of PDIs
in the construction industry, the findings could therefore not support the assertion that
the CDPs had given financial institutions the confidence to assist them. The question
attained a below average rating which was also consistent with the studies of
Havemann (2001), Söderbaum (2001), Rogerson (2010) and the CIDB (2011) who
observed that PDI construction companies were still faced with some obstacles to
their development which included, among others, the following:
The requirement to provide collateral in order to access loans and other
financial assistance; and
Late and fluctuating payment cycles. Most SMME contractors depend on fluid
cash to transact business. Any delay in paying these contractors results in their
failing to pay their employees and suppliers, which therefore renders them
uncreditworthy and consequently affects their progress and quality of work on
site.
These obstacles were also noted by interviewees in the open-ended questions of this
study.
126
The CDPs might be seen as having some influence on PDIs companies but literature
indicated that PDIs were still regarded by financial institutions as high risk. The fact
that CDP providers on mentorship programmes require mentors to co-sign financial
transactions with the PDI companies also pointed to the fact that PDIs were regarded
as high risk. PDI contractors on the above-mentioned CDP were only granted financial
assistance by financial institutions on evidence of co-signatory arrangements with a
mentor.
9.2.4 Contractor satisfaction
The fourth objective was to establish how beneficiaries of the CDP rate the
programme.
The general impression of the study was that most of the contractors were fairly
satisfied with the CDPs. However, most of the individual questions were rated below
average, suggesting that there were some gaps within the CDPs that required the
collective attention of all stakeholders to rectify.
First, it was observed that the CDPs did not assist the collaboration between
contractors and clients.
Second, the beneficiaries requested that the CDPs should emphasise quality control
and quality assurance knowledge in order to improve contractors’ output on site.
Third, the beneficiaries felt that a needs assessment should be conducted on
individual contractors to ascertain their individual experiences and needs before the
training was conducted. The beneficiaries believed that the one-size-fits-all approach
did not benefit the contractors because they all had different needs and had varying
experience.
Fourth, the beneficiaries felt that the training should have included more modules on
contractors’ human resource management processes in order to improve their
relationship with their employees.
Finally, one of the most interesting observations was the number of beneficiary
contractors who disagreed with the statement that the training would be worthwhile if
127
conducted via the Internet. It was expected that the contractors would have opted for
CDPs to be conducted via the Internet owing to the easy access to different tools that
could be used for this purpose and might assist contractors to be trained in the comfort
of their offices. This finding might be because as technically oriented people, the
contractors preferred their trainers to train them physically on site to being remotely
trained.
These findings were consistent with those by Havemann (1999), Seth (2004),
Enshassi and Shaath (2007) and Rogerson (2010) who found that the beneficiary
contractors regarded the CDPs to be effective and useful but had gaps which required
attention.
9.3 STRUCTURED INTERVIEW RESULTS
9.3.1 Consultants’ perception of CDPs’ impact on contractor performance improvement
The findings from the structured interviews were that consultants had not seen any
major improvement in contractors’ capabilities. The consultants’ opinion was that
continuous mentorship was the way forward in assisting contractors’ performance
improvement. The consultants unanimously agreed that mentorship programmes
were able to ensure contractors’ upgrade and sustainability. It was therefore a
common opinion of the consultants that for the CDPs to achieve their outcomes,
continuous contractor development should be made compulsory in all CDPs. These
findings were supported by Croswell and McCutcheon (2001) who observed that a
successful CDP should have an ongoing mentoring programme.
9.3.2 Contractors’ perceptions on mentorship
The findings from the structured interviews were that mentoring was optional in most
of the CDPs that they had undergone. It was also found that most of the mentoring
programmes were paid for by the contractors themselves and because they were
once-off and non-compulsory, most of the contractors deemed them to be an
unnecessary expenditure. This finding was consistent with CIDB’s finding (2011) that
only one out of the many CDPs reviewed had a working mentorship programme but
even that required the beneficiary to pay for it.
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The findings were that the contractors, in agreement with the consultants, were in
favour of the idea of having mentoring in all CDPs and that it should be continuous
and compulsory. It was, however, requested that such continuous mentorship
programmes must be subsidised or be made free of charge. These findings were in
congruence with those of Uri and Jere (2003), Joseph and Haule (2003), Enshassi
and Shaath (2007) and Seth (2004) who also postulated that successful CDPs were
those that were subsidised by national or local governments or, in some cases, by
foreign donors and other organisations.
The relevance of mentorship programme was noted by most interviewees and they
indicated that they would not mind having their mentors as co-signatories on their bank
accounts if that was the requirement in order for financial institutions to offer them
assistance. In as much as this could be said to be the contractors’ confidence in the
mentors, it could also be argued that those conditions were accepted by the
contractors because that was their only chance of getting assistance from the financial
institutions which view these contractors as high risk.
9.4 KEY FINDINGS
This study found that the general best practices for a successful CDP implementation
included, among others, the implementing clients’ knowing the rationale for the
programme. In addition, a successful CDP was found to be one with a political and
administrative backing and the size of the programme was determined by the
implementing agents. Furthermore, the programmes should also have clear entry and
exit points and a commitment of funds from management and political bodies where
applicable. In addition, the selection of contractors into the CDPs and the procurement
strategies of the programmes should be transparent, open, cost-effective and fair.
Finally, the documentation for the CDP implementation should be simplified to conform
to the CIDB Standards for Uniformity.
The key findings of this current study were that the elements for a successful CDP
implementation were classroom work, fieldwork and continuing mentorship
programmes.
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Literature revealed that classwork should be the first training point for successful CDPs
(Uriyo & Jere, 2003; Joseph & Haule, 2003; Seth, 2004; Hauptfleisch, 2006; Enshassi
& Shaath, 2007; CIDB, 2009; 2011; Khuthaza, 2012). Equally, fieldwork was found to
be part of a successful CDP. The use of fieldwork for the implementation of CDPs
features prominently in most of the literature which was reviewed (Uriyo & Jere, 2003;
Joseph & Haule, 2003; Seth, 2004; Dlungwana & Rwelamila, 2005; Hauptfleisch,
2006; Enshassi & Shaath, 2007; CIDB, 2009 & 2011; Khuthaza, 2012;) as these
authors regarded fieldwork as an integral element of any successful contractor
development programmes.
9.4.1 Continuous contractor mentorship
A significant finding of the current study was that, for a CDP to be successful and to
ensure contractors development sustainability, it should have a continuous contractor
mentorship (CCM) programme.
The benefits of CCM to the owner-manager of a SMME, according to the literature,
includes, among others, improved performance and productivity; improved knowledge
and skills; greater confidence, empowerment and well-being; improved job satisfaction
and motivation; faster learning and enhanced decision-making skills; improved
understanding of the business; improved creativity and innovation; encouragement of
positive risk-taking; and development of leadership abilities. On the other hand, the
benefits to the enterprise or business include, among others, strategic change,
facilitation of partnerships, innovation and change, problem solving and better project
management (Mazzarol et al. 2006; Pompa, 2012:9; BIS 2013).
The finding in the current study was that a successful CDP had a structured series of
consecutive contracts, during which the SMME contractors were continuously
mentored until they were able to act independently, that is having the entrepreneurial
approach towards marketing and tendering successfully to ensure their sustainability
(Croswell & McCutcheon, 2001).
The benefits of CCM were evident from literature in that, in most studies, the surveyed
respondents had requested CCM to be included in their CDPs (Uri & Jere, 2003;
Joseph & Haule, 2003; Seth, 2004; Enshassi & Shaath, 2007).
130
The findings from the questionnaire for the implementation of the CDPs were that the
majority of contractors strongly agreed or agreed to the proposition that CCM would
improve the success of CDPs. These findings were in agreement with the findings
from the structured interview conducted among consultants and contractors. Eighty
per cent of the consultants interviewed believed that CCM could ensure a successful
CDP while 75 per cent of contractors believed that CCM would assist in improving the
CDPs.
According to the South African literature, most of the CDPs had mentorship
programmes embedded in their curriculum. However, only a few of the CDPs had
implemented those mentoring programmes.
The current study found that there was a correlation between the CDPs that
implemented their mentorship programmes and the migration of contractors from a
lower CIDB grading to a higher grading. It was found that contractors who had
undergone the SCI programme migrated from a lower CIDB grading to a higher
grading. This movement was also attributed to the SCI programme which provided
support to selected participants, albeit at a cost, for a period of three years, by which
time the contractor would have advanced by at least one financial level above the entry
point in the CIDB grading and should have been capable of operating in the open
market with little or no support (CIDB, 2011:27).
Evidence that greater improvements were achieved in programmes with elements of
CCM was found in the Eskom CDP programme. It was found that the Eskom
Construction Academy’s contractors achieved a significant migration in their CIDB
grading. This result was attributed to the fact that the Academy had continuity of
contracting opportunities, training and ongoing mentoring, and also included a high
level of institutional support, as mentioned by Croswell and McCutcheon (2001). The
Eskom Construction Academy provided full mentoring and coaching support services
throughout the programme (CIDB, 2008:26) and most of the graduates were assured
of a constant workflow from Eskom. These conditions found in Eskom were
acknowledged as the reasons for the success of the CIDB upgrade.
131
9.5 CONCLUSION
The findings from the study showed that the CDPs had not assisted beneficiaries in
improving their management skills. Similarly, the CDPs were found not to have
assisted companies’ upgrades to higher CIDB gradings and that they had not ensured
the participation of PDIs in the construction market. However, beneficiaries were found
to be fairly satisfied with the CDPs and regarded them as value-adding activities.
Nevertheless, there were certain disparities or gaps within the CDPs that required the
implementing agencies’ serious attention to ensure the successful implementation of
the CDPs. Consultants also believed that the contractors’ performance had not
improved after undergoing the CDPs, and both the consultants and contractors
concurred that continuous mentorship programmes would be the solution for this lack
of performance.
A relationship was established between the CDPs that offered mentorship and the
migration of their beneficiaries from lower CIDB grading to higher grading. The
knowledge that the CCM programme seemed to correlate with the successful CDP
outcome was established.
The next chapter summarises the findings of the research, draws conclusions and
provides recommendations for the research problems.
132
CHAPTER TEN
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
10.1 INTRODUCTION
This concluding chapter concentrates on reviewing the contribution of this research to
the body of knowledge on CDPs. The aims and objectives of this study are reviewed.
An overview of each chapter is also presented, showing how each chapter relates to
the overall aims, analysing and detailing their contribution to the research. The
limitations and implications of the study are also presented in this chapter.
10.2 OBJECTIVES OF THE STUDY
The overall objective of the current study was to investigate the effectiveness of CDPs
in general with a view to contributing to their improvement. In order to achieve the
objectives of the study a mixed methodology was adopted. An extensive literature
review, structured interviews and self-administered questionnaires were used in
collecting the data which were analysed using SPSS. The structured interviews were
conducted to triangulate the findings of the questionnaire and literature reviewed.
Conclusions regarding the study are presented relative to the objective of the study.
10.2.1 Objective one
The first objective of the study was to establish the extent to which CDPs have helped
in improving contractors’ management skills. The findings were that, even though
contractors observed some improvements in their management skills, it could not be
termed sufficient owing to certain gaps within the current CDPs, and this observation
was also made by consultants. The literature reveals that most clients were
dissatisfied with the quality of work undertaken by the SMME contractors. Findings
from the literature were that most contractors were unable to submit winning tenders.
The literature again revealed that for CDPs to improve contractors’ management skills,
the beneficiaries must be trained in the classroom, on the field and through an ongoing
mentoring programme.
133
10.2.2 Objective two
The second objective of the study was to establish the extent to which the CDPs
ensured contractors’ upgrading. The findings were that, although contractors observed
some upgrades during the CDP period, they might have been downgraded after the
CDP. It can therefore be concluded that the CDPs have not ensured contractors’
upgrading because most contractors did not sustain their migration from lower CIDB
grading to higher grades. The literature revealed that many contractors still remained
at the bottom of the CIDB grading pyramid.
10.2.3 Objective three
The third objective was to examine the relationship between CDPs and the
achievement of an increased participation of PDIs/organisations in the construction
industry. The findings were that the CDP had not assisted in alleviating the persistent
obstacles faced by PDIs/organisations in the construction industry. The literature
postulated that PDI organisations were struggling to obtain financial assistance from
financial institutions because they are classified as a major risk.
10.2.4 Objective four
The final objective was to establish how beneficiaries of the CDPs rated these CDPs.
The findings showed an average contractor satisfaction with the CDPs and a belief
that they added value to their businesses. The findings only showed an average
satisfaction because the beneficiary contractors believed there were some gaps in the
CDPs that required attention for their successful implementation. The literature
revealed that even though the CDPs might have assisted in some contractors’
performance improvement, most SMME contractors still faced challenges that these
CDPs were designed to eliminate. The findings of the survey conducted among
construction consultants revealed that contractors’ performance had not improved and
it was suggested that continuous mentorship programmes be made a vital part of
every CDP.
134
10.3 CONTRIBUTION AND VALUE OF THE RESEARCH
The contribution and value of the current study are described below.
The study could contribute to the existing knowledge on CDPs as it pursued
the opinion of the beneficiary contractors about the valuation addition of the
CDPs.
This study has revealed that continuous contractor mentorship (CCM) could
be used to replace the current once-off mentorship programmes in the
CDPs.
The findings of this study could assist policy makers and stakeholders in
CDP development and implementation.
The study offers an opportunity for further research to improve and possibly
refine the findings of this study.
This study offers many implications for practice and therefore adds value to the body
of knowledge.
10.4 CONCLUSION
The following conclusions could be drawn from the findings of the research study.
The majority of the entrants to the CDPs fell within the PDI or the historically
disadvantaged individuals (HDI) category as enshrined in the Preferential
Procurement Policy Framework Act (PPPFA) (2000). This conclusion could be made
because the research findings showed that most of the trainees of the CDPs fell under
the PDI status with the majority of them being Africans. Again, the majority of the
trainees fell within the SMME category in the South African perspective: they were
youth and were within the requisite CIDB grading of 1 to 7.
Meanwhile, the male–female dichotomy in the construction industry (Moodley, 2012)
was observed in the study. The percentage of women surveyed was 29 per cent, which
fell short of the stipulated 40 per cent as required under the EPWP (2000). However,
there was a higher percentage (28%) of people living with disabilities as compared to
the 2 per cent stipulated in the EPWD (Mukanyima, 2012:138). The research generally
135
showed that the entrants to the CDPs fulfilled the entry requirements as stipulated in
NPWD (2008:6).
The study showed that the CDPs had not assisted beneficiaries in improving their
management skills. Again, the CDPs had not assisted companies’ upgrades into
higher CIDB grading and the CDPs had not ensured the participation of PDIs in the
construction market.
The study also showed that the beneficiaries were fairly satisfied with the CDPs and
regarded them as adding some value to their upgrading and sustainability. However,
there were certain gaps within the CDPs that required the implementing agencies’
serious attention to ensure the successful implementation of the CDPs.
Construction consultants perceived that the contractors’ performance had not
improved even after undergoing the CDPs. Both the consultants and contractors
concurred that continuous mentorship programmes would be the solution to this lack
of performance. There were relationships between the CDPs that offered mentorship
and the migration of their beneficiaries from lower CIDB grading to higher grading.
The finding of this study also showed that the CCM programmes which were found to
be vital to any successful CDP were lacking in most of the South African CDPs
reviewed.
10.5 RECOMMENDATIONS
The research findings have revealed the area(s) that require(s) attention of CDPs to
ensure their successful implementation and to achieve their set objectives of improving
the management skills of contractors, ensuring contractors’ upgrade and encouraging
the participation of PDIs in the construction industry.
CCM was observed as the overall remedy for the improvement of contractors’
performance to ensure their sustainability.
The following recommendations are made to all the relevant stakeholders and
implementation agencies or institutions involved with CDPs as part of the solution for
achieving the aims and objectives of these programmes.
136
10.5.1 Methodological
It is recommended that a similar study be conducted nationwide with a
different population and different sample size to improve the application of
CCM in CDPs.
It is also recommended that different methods other than structured
interviews and questionnaire be encouraged in studies such as this.
10.5.2 Theoretical
The importance of CCM was observed from the literature and the different
definitions of mentorship were provided and explained. This study, however,
observed that the key word for the mentorship programmes was
“continuous”. It is therefore recommended that contractor mentorship
programmes be made continuous to be beneficial to the construction
industry.
10.5.3 Practical
It is recommended that all CDPs should have organised intuitional
structures which are appropriately staffed to deliver the programmes.
It is recommended that all CDPs should have well-defined training and
development models with concise syllabus structures.
It is recommended that CDPs should have well-defined entry and exit levels
to enable the implementing bodies to evaluate learners’ performance.
It is recommended that the government and other CDP-implementing
agencies be observant of the importance of mentorship to contractor
development.
It is recommended that all implementing stakeholders should observe
mentorship as continuous process and not just a once-off process.
It is recommended that mentors implementing these programmes meet the
minimum qualifications as prescribed by the South African Council for the
Project and Construction Management Professions.
137
It is also recommended that CCM be cost free or the cost to contractors
subsidised.
Contractors should be encouraged to form associations to contribute
funding towards the payment of the mentors.
10.6 LIMITATIONS
The research was aimed at surveying contractors across the entire country,
but owing to both time and financial constraints it was limited to the Gauteng
Province only.
There were no respondents to the other provincial CDPs, and it would have
been interesting to know how these provincial CDPs would have fared.
There could have been a larger number of consultants for the interview but
these were reduced owing to time constraints.
10.7 SUGGESTION FOR FURTHER RESEARCH
A nationwide research could be undertaken in the future with time and all other
resources permitting. However, there are copious research opportunities to explore
from the findings of this study, with some of them listed below:
Exploring the effectiveness of CCM in South Africa;
Improving the impact of continuous contractor development and contractor
migration in CIDB grading;
The impact of project and financial management skills on contractors’ CIDB
upgrade;
The role of coaching and mentoring in contractor development; and
Gaps and solutions to a better CDP.
10.8 CONCLUSION
This study focused on the effectiveness of CDPs in South Africa. The aim of the
research was to investigate whether the CDPs had achieved their intended goals and
objectives of improving contractors’ management skills, ensuring contractors’
upgrade, encouraging the participation of PDIs in the construction market, and
138
establishing contractors’ general satisfaction with the programmes. Further, the study
sought to determine how CDPs could be improved so that they could achieve their
goals and also meet the beneficiary requirements.
The study revealed that a continuous mentorship programme embedded in a CDP had
better results in terms of the development programmes meeting their goals and
beneficiary satisfaction. However, most CDPs did not have or did not implement the
mentorship programmes effectively. This study therefore recommends that for CDPs
to meet their intended goals, classwork and field delivery methods need to be
supplemented by CCM as an integral part of every CDP.
These findings were grounded in theory and empirical findings. The study first
established and discussed the importance of the construction industry to the
socioeconomic development of countries and the role that SMME contractors played,
and the challenges that they faced as businesses. It was established that because of
the significant role that SMME contracting organisations played in the industry, and
the significance of the industry itself to national economies, it was necessary to have
effective training and development programmes for these SMME contracting
organisations.
However, the question arises as to what type of training and development programmes
were suitable and effective to meet the goals of development. Various contractor
development programmes were reviewed regarding their aims, methods of delivery
and outcomes. Equally, the implementation of CDPs and their impact on contractors’
development in South Africa and other developing countries were also evaluated.
Other training and development theories, including their benefits, were reviewed.
Findings from the review of the CDPs were that there was number of CDP initiatives
which were sometimes not coordinated, even within a country. Further, although
beneficiaries were happy with the offerings, almost all the CDPs had gaps which the
beneficiaries thought should have been addressed before commencing on the training.
Issues such as understanding the trainee and financing were key findings. The other
key finding was that in almost all the CDPs reviewed, the issue of continuous
mentorship was central and yet it was not effectively implemented. Beneficiaries felt
139
that this aspect of development was critical if all the intended goals were to be
achieved.
This study was embarked on in light of the fact that very few studies have sought the
views of beneficiaries on whether the CDPs have achieved their goals,. The study
adopted a research methodology which investigated small, medium and macro
enterprise contractors’ perceptions of CDPs in South Africa. A mixed method of
structured interviews and a questionnaire survey was utilised to collect triangulated in-
depth data to fully understand how effective the CDPs have been.
The results from the survey presented in Chapter 8 showed a level of satisfaction by
the beneficiaries in the CDPs. However, the CDPs were found not to be as effective
as intended.
140
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APPENDICES
APPENDIX A – QUESTIONNAIRE
20 January 2014
Dear Sir/Madam
Performance evaluation of Contractor Development Programmes – A Contractor
Perception Survey
I am a student of the University of Johannesburg and currently studying for a Master’s
degree in Construction Management in the Department of Quantity Surveying and
Construction Management.
In fulfilment of my degree requirements I am currently undertaking a research into how
contractors feel about contractor development programmes in South Africa.
You participated in the contractor development programme and as such I kindly
request your taking time to complete the questionnaire about your impression of the
training programme.
The questionnaire is composed of seven (7) pages and it should take no longer than
10 minutes of your time to complete. Your contribution towards this research is highly
valued.
Please do not enter your name, contact details or any identification marks on the
questionnaire in order for you to remain anonymous.
171
Please send the completed questionnaire back to me by email on or before 14t
February 2014.
Should you have any queries or comments regarding this survey, please contact me
on 076 750 9263 or email at [email protected]
Thank you in advance for your valuable time.
Yours sincerely
Ambrose Dapaah
PLEASE ANSWER THE FOLLOWING QUESTIONS BY TICKING (✓) THE
RELEVANT BLOCK OR WRITING DOWN YOUR ANSWER IN THE SPACE
PROVIDED.
EXAMPLE of how to complete this questionnaire:
What is your gender?
If you are male:
Male ✓
Female
We acknowledge the sensitive nature of the information provided below: however, all
information given will be treated in the strictest confidence and no comments will be
172
attributed to any one person or organization. We once again assure you that your
response and all information provided will remain anonymous.
Company’s Details
This section of the questionnaire refers to your company’s background information.
1. What is your gender?
Male
Female
2. Do you have any physical disabilities?
Yes
No
3. Are you a previously disadvantaged individual (PDI)?
Yes
No
4. To which ethnic group do you belong?
173
African
Coloured
White
Asian/Indian
Others
5. What is your age?
6. How many people does your company employ?
Less than 10
10 - 90
100 – 200
201 or more
7. In which province is your company based?
174
Gauteng
Kwa-Zulu Natal
Western Cape
Eastern Cape
North West
Limpopo
Mpumalanga
Free State
North Cape
8. Which of the following contractor development programmes have you attended?
Vukuzakhe Contractor Development Programme
Masakhe Contractor Development Programme (KwaZulu-Natal DPW)
EPWP – Vuk’uphile Learnership Programme
Khuthaza Contractor Development
SCI Programme
175
Eskom Construction Academy
Polokwane Local Municipality Contractor Development Programme
Mpumalanga DPWR&T Programme (Sakh’abakhi Programme)
Free State Depart. of Public Works and Rural Development
Programme
Western Cape Siyanyuka Contractor Enhancement Programme
Northern Cape DR& Public Works Contractor Development
Programme
Free State Depart. of Police, Roads and Transport contractor
Programme
Others
9. In which year did you attend the programme? Please fill in the year
10. In which year did you complete the programme? Please fill in the year
11. What was your CIDB grading before the training? Please fill in your CIDB grade
176
12. What is your CIDB grading after the training? Please fill in your CIDB grade
IMPLEMENTATION OF THE CDP
13. To what extent do you agree with the following description of the programme?
ID IMPLEMENTATION OF THE CDP
Str
on
gly
Ag
ree
Ag
ree
Dis
ag
ree
Str
on
gly
Dis
ag
ree
Not
Su
re
1 The trainers delivered and explained the
training clearly
2 The time allowed for the classroom work was
appropriate
3 The site work was adequate
4 The mentoring process were helpful
5 Continuous mentorship will be very helpful to
successful CDP implementation
6 The materials given at the training were
effective and helpful
7 There was a single point of contact for
communication between trainers and trainees
177
8 The training was scheduled and
communicated to clearly
9 The training was executed according to the
predetermine schedule
10 The training met the set objectives
14. Any other comments on your decision
CDP and CONTRACTOR EMPOWERMENT AND DEVELOPMENT
15. To what extent do you agree with the following description about the training?
ID IMPROVED MANAGEMENT SKILLS
Str
on
gly
Ag
ree
Ag
ree
Dis
ag
ree
Str
on
gly
Dis
ag
ree
Not
Su
re
1 The training has given me more confidence in
my managerial skills
2 The training has improved my knowledge on
estimating and tendering
3 The training has broadened my knowledge on
project planning
4 The training has enhanced my knowledge on
financial planning
5 The training has enhanced my confidence in
contract laws and claims
6 The training has improved my ability to market
my services to clients
178
7 The training has enhanced my knowledge of
effective quality control
8 The training has enabled me to complete
projects within the contract period
9 The training has assisted me to complete
projects within project budget
ID CONTRACTOR UPGRADE
Str
on
gly
Ag
ree
Ag
ree
Dis
ag
ree
Str
on
gly
Dis
ag
ree
Not
Su
re
1 The training has helped me improve my CIDB
grading
2 The training has assisted in the growth of my
company’s income
3 The training has enabled me the opportunity to
bid for bigger projects
4 The training has helped my company in getting
consistent work flow
5 The training has enabled my company to
increase the number employees
ID PARTICIPATION OF PDI’s
Str
ong
ly
Ag
ree
Ag
ree
Dis
agre
e
Str
ong
ly
Dis
agre
e
No
t S
ure
1 The training has given me access to register
with CIDB
179
2
The training has enhanced my chances of
tendering for jobs that I couldn’t have tendered
for
3 The training has afforded me the opportunity
to get more contracts
4 The training has given financial institutions the
confidence to assist me
5 The training has encouraged clients to pay me
promptly to boost my cash flow
ID CONTRACTOR SATISFACTION
Str
ong
ly
Ag
ree
Ag
ree
Dis
agre
e
Str
ong
ly
Dis
agre
e
No
t S
ure
1 The training programme generally met my
expectations
2 The training programme is worth the cost of
attending
3 The training has enhanced my understanding
of the construction environment
4 The training has assisted me to avoid penalties
due to late completion of work
5 The training has enhanced my relationship
with my clients
6 The training has helped me reduce complaints
about the quality of my work
180
7 The training has helped improve my
relationship with my employees
8 The training would have been better delivered
through the Internet
9 The training was conducted according to our
individual experience
10 I will be attending the training in future
11 I will definitely recommend the training to
someone else
16. Any other comments on your decision
17. Are the development programmes a complete waste of time in your view?
Yes
No
18. Any requests and/or suggestions about the contractor development programme
181
FOR ANY OTHER INFORMATION PLEASE CONTACT ME ON 076 750 9263
182
APPENDIX B – STRUCTURED INTERVIEWS – CONSULTANTS
PLEASE ANSWER THE FOLLOWING QUESTIONS BY TICKING (✓) THE
RELEVANT BLOCK OR WRITING DOWN YOUR ANSWER IN THE SPACE
PROVIDED.
EXAMPLE of how to complete this questionnaire:
Has contractor performance improved?
If yes:
Yes ✓
No
Consultants were asked the following questions in a pilot study to test the performance
of SMME Contractors.
1. Have you worked with SMME contractors who have undergone CDP?
183
Yes
No
2. If ‘Yes’, do you think they performed better than those that did not undergo the
CDP?
Yes
No
3. If ‘No’ to Question 2, do you think mentorship will assist in improving contractors’
performance?
Yes
No
4. Should mentorship be made compulsory in your view?
Yes
No
184
APPENDIX C – STRUCTURED INTERVIEWS – CONTRACTORS
PLEASE ANSWER THE FOLLOWING QUESTIONS BY TICKING (✓) THE
RELEVANT BLOCK OR WRITING DOWN YOUR ANSWER IN THE SPACE
PROVIDED.
EXAMPLE of how to complete this questionnaire:
Were you told about mentorship during your CDP?
Yes ✓
No
We acknowledge the sensitive nature of the information provided below: however, all
information given will be treated in the strictest confidence and no comments will be
attributed to any one person or organization. We once again assure you that your
response and all information provided will remain anonymous.
Contractors were asked the following questions in a pilot study to test their views on
mentorship.
1. Were you mentored during the CDP?
185
Yes
No
2. If ‘yes’, did you like it?
Yes
No
3. If ‘No’ to Question 1, were you told about mentorship during CDP?
Yes
No
4. If ‘No’ to Question 2, was the mentorship programme free/subsidized/paid by
you?
Free
186
Subsidised
Paid by me
5 Did the mentorship programme help increase your CIDB grading?
Yes
No
6 Will you accept financial assistance if your mentor has to be a signatory on your
bank account?
Yes
No
7 If you paid for a mentorship programme, do you think it is worth the money
paid?
Yes
No