Certain sections of legislation, including the Project and Construction Management Professions Act of 2000, aimed at regulating the South African construction industry, are poorly drafted owing to inconsistencies and incoherencies which exist within and in-between the various laws which have been enacted, states legal expert Coen Snyman who trains exclusively for Alusani Skills & Training Network.
These inconsistencies and incoherencies contribute to instances of fraud and corruption in the construction industry, states Snyman, who came across these conclusions while presenting courses to industry stakeholders.
While some sections are transparent, their intention and enforcement by various state bodies, lacks clarity. This, together with the lack of transparency of other construction related laws, enables stakeholders to interpret and apply these laws as they see fit.
The extent to which the contractor’s scope of work may be increased and varied, for example, between the tender stage and before final completion of the works, is often misunderstood and advantage is taken of contractual provisions, which generally allow variations to some degree, to circumvent laws which necessitate that such work should go out on tender and form the subject matter of an entirely different enquiry.
Snyman adds that the more an industry is regulated, the more people aim to find ways to bypass the regulations, adding to the amount of dishonesty and fraud prevalent throughout the industry.
He notes that the biggest challenge faced when trying to comply with South African construction law is the application and interpretation of public procurement laws, such as the Preferential Procurement Policy Framework Act. Owing to its lack of clarity and the difficulty of applying it, long lag times are experienced between project conception and implementation.
Snyman adds that the lack of clarity and the construction industry’s lack of understanding regarding procurement, implementing proper tender processes and procedures, evaluating tenders, the types of contracts available for selection and proper contract administration complicates the construction industry environment.
Technical documents, such as an employer’s requirements and specifications regarding a project are also often drafted improperly owing to a shortage of skills and little knowledge regarding what such documents should actually contain and address.
This is where focused training can be an advantage, states Snyman. Alusani’s two-day New Engineering Contract (NEC) course provides course participants with an overview of this form of contract, which originated from the UK, and with an understanding of the fundamentally different and new approach to contracting brought about by the NEC.
“The NEC is regarded by many as global best practice, hence, many organisations and institutions seek to gain a better understanding of this form of contract,” Snyman explains.
The course is aimed at anyone involved with the procurement, management and administration of projects or with the actual execution of the works. Legal practitioners and advisers would also benefit from attending this course, he adds.
“The construction industry should take note of the many benefits that a proper under- standing of a NEC brings to the industry,” Snyman states, adding that NECs are not as simple and straightforward as they may appear and proper training is essential for all contracts users.
Snyman asserts that claim management is still being carried out in an ad-hoc manner, which unnecessarily drags out the process. “Proper and substantive evidence and records are generally not kept, making the assessment of claims difficult and time consuming.”
“Many parties fail to recognise that the claims procedure is simply part of the allo- cation of risks. The negative connotation regarding claims also results in unnecessary disagreements and disputes. Negative connotations exist since the claims process is often seen as a mechanism whereby contractors are able to abuse and take advantage of their employers,” Snyman explains.
He warns that the construction industry is filled with “pseudo lawyers” – the law which they apply is often based on an incom- plete understanding of the relevant legal principles. Therefore, these lawyers often give dangerous and erroneous advice to industry stakeholders.
“Anyone involved in the decision-making processes within the construction sector must have adequate knowledge of construction contract law – particularly individuals involved in procurement, claims and contract administration,” Snyman stresses.
The value of having a good understanding of the fundamentals of the Project and Construction Management Professions Act is immeasurable, he points out, noting that construction law and contract law are fundamentally different – a phenomena misunderstood and incorrectly acted on by most industry stakeholders.
In response to the growing need for knowledge, Alusani Skills & Training Network offers a Construction Contract Law course to help remove the stigma that claims are a negative phenomenon and reduce the number of resulting disputes. “We hope the course will create a more consistent and common understanding of the relevant legal and contractual principles.”
Snyman states that there is a huge interest and fascination with construction claims in the industry. “Contractors want to gain a better understanding of claims procedures, as well as events giving rise to claims, since they still see it as a way to increase their profit margins and as a way in which to reduce their risk.”
Alusani’s two-day Construction Claims course provides participants with a better understanding of the claims process in the construction industry. It will lead to better formulated claims, enabling easier claim assessments, which will reduce the number of formal claim disputes in the industry, Snyman says.
“This will not only save the industry millions of rands in costs, but will also free up management’s time to ensure projects are completed on time, within budget and up to standard.”
The courses also offer South African Institution of Civil Engineering continuous professional development points and are aimed at project managers, project engineers, construction managers, contract managers, site agents, attorneys, contractors, subcontractors, civil engineers, quantity surveyors, commercial managers and developers.
State of Industry
Snyman notes that, while the construction industry is active, there are few new projects being rolled out, owing to delays on a government level in terms of initiating new public infrastructure.
“Subsequently, skills development is lagging, but it should increase as more projects are rolled out.”
The demand for education and skills development in the construction industry is significant, owing to the scarcity of jobs in other sectors, which attracts many new entrants into the construction industry.
“Many mistakenly see this as an easy option because they underestimate the challenges and risks inherent in construction, thinking construction work is effortless, easy money, which, of course, is not the case,” Snyman points out.
While the construction industry is contributing towards job creation it will contribute more when government rolls out new projects.
In addition, more women are entering positions in the construction industry as project managers, cost engineers and quantity surveyors, and are also active in the field of proper engineering.
However, Snyman notes that while the industry has not yet achieved gender parity, it has become more open and receptive to women.
In 2012, Alusani Skills & Training Network trained over 2 600 professionals within the construction sector on construction- related courses, technical courses and management development courses. Over 15% of these professionals were women.
Alusani’s construction course portfolio also includes, a Federation of Consulting Engineers (FIDIC) course, a General Condition of Contract (GCC)2010 course and a Joint Building Contracts Committee Suite of Contracts course(JBCC).