CIDB grading explained: what it means, the grades and the grading table

What is the CIDB?

CIDB stands for the Construction Industry Development Board. It is a statutory body that was established to promote the construction industry’s development and to regulate certain aspects of it, including the national Register of Contractors. The CIDB describes the register as supporting clients in infrastructure procurement by categorising and grading contractors from 1 to 9, according to financial and works capability.

When contractors, clients and tender notices talk about “CIDB grading”, “CIDB grades” or a contractor’s “CIDB level”, they mean the grading designation recorded for that contractor on this register.

How a CIDB grading designation is written

A grading designation is written as one digit followed by two letters. The digit is the grade, from 1 to 9. The letters show the class of construction works. For example, a grade 6 civil engineering contractor is written 6CE, and a grade 4 general building contractor is written 4GB. The CIDB also shows that emerging contractors’ designations carry additional letters, for example 4GBPE.

A contractor can hold more than one grading. The CIDB gives each contractor one registration number regardless of how many gradings it holds.

The CIDB grading table

The table below reproduces the CIDB’s grading designation table for works capability. It shows, for each grade, the maximum value of contract that a contractor is considered capable of performing and the track record the CIDB looks for.

How a contractor’s grade is determined

The CIDB says grading is based on two determinants: works capability, which means construction works or track record, and financial capability, which means available capital. It assesses track record first, then capital.

Works capability (track record)

The CIDB looks at projects the contractor has completed in the five years before the application, in the class of works applied for. Track record applies to grades 2 to 9. Projects awarded from 1 April 2021 must be registered on the CIDB Register of Projects to count.

Financial capability

The CIDB looks at the contractor’s financial statements for the immediate past two years and considers the best annual turnover of those two years, together with available capital, which it describes as funds presumed available to start a new project.

Financial sponsorship

A financial sponsorship is a guarantee or surety from a third party to cover liabilities if the contractor cannot meet its financial obligations. The CIDB says a financial institution can provide it and that, for other sponsors, it may not exceed 15% of the sponsor’s net asset value.

The track record the CIDB asks you to evidence includes the project award from the client, the certificate of project completion, a payment certificate and bank statements. The CIDB may ask for more. Preparing your registration information explains how to organise this.

How the grade is used in tendering

Public-sector tender notices commonly state the grading designation they require, such as a grade and class of works. Whether a contractor holding a higher grade may also tender is a matter for the tender notice and the CIDB’s rules, so read the notice itself.

• A grade reflects the largest contract value a contractor is considered capable of performing, not a measure of quality.
• A contractor registered in one class of works is not automatically registered in another.
• Where several contractors form a joint venture, the CIDB has its own approach to assessing the combined grading. See CIDB joint ventures.
• Tender documents usually ask for other evidence as well. See the tender document checklist.

Why grading matters for insurance and guarantees

CivilCovered arranges insurance and does not grade contractors. Your CIDB grade does not decide whether a policy can be arranged. It does, however, shape the contracts you can tender for, and therefore the insurance and security you will be asked to provide.

• Insurers may ask about your experience and the size of contract you are taking on, particularly for Contractors All Risk insurance.
• Guarantee providers assessing a bid bond or performance guarantee may ask for your grading, your track record and your financial statements.
• Contracts at higher grades tend to carry higher insurance limits and security requirements, so it helps to plan these before you tender.

CIDB terms in plain language

CIDB

The Construction Industry Development Board.

Register of Contractors

The CIDB’s register of graded contractors, which clients use when they procure construction works.

Grading designation

The grade and class of works recorded for a contractor, such as 6CE.

Class of works

The type of construction work: for example civil engineering (CE) or general building (GB).

Track record

Projects completed in the last five years in the class applied for, used to assess works capability.

Available capital and best annual turnover

The financial measures the CIDB uses to assess financial capability.