ISO 10845-5:2011

Overview

ISO 10845-5:2011 - "Construction procurement - Part 5: Participation of targeted enterprises in contracts" defines a measurable key performance indicator (KPI) - the contract participation goal (CPG) - to promote and verify the engagement of targeted enterprises (e.g., local, minority-owned, or otherwise designated businesses) in construction contracts. The standard sets out how a CPG is defined, measured, quantified and verified under two targeting approaches: targeting strategy A (tender-stage / tendered amount basis) and targeting strategy B (final contract value basis).

Key topics and requirements

• Contract Participation Goal (CPG): A monetary value (expressed as a percentage of the contract amount, exclusive of VAT/sales tax) representing the portion of contract value to be awarded to targeted enterprises.
• Two targeting strategies:
  • Strategy A: CPG based on tendered contract amount (used for evaluation and/or minimum performance during contract).
  • Strategy B: CPG based on final contract value (used for post‑performance measurement or financial incentives).
• Measurement & verification: Procedures for quantifying credits toward the CPG, verifying targeted enterprise status and ensuring commercially useful functions are performed.
• Implementation planning: Contractors may be required to submit a Contract Participation Goal Implementation Plan (Annex C) - e.g., within five working days of instruction or before the first payment claim for Strategy A.
• Joint ventures and participation parameters: Rules for crediting joint-venture partners and apportioning value where targeted partners participate as joint venture members.
• Records and reporting: Documentation, monthly supporting submissions, certification of credits, and actions on completion of subcontracts.
• Compliance and sanctions: Processes for assessing compliance, substitutions, bona fides and sanctions where CPG obligations are unmet.
• Supporting guidance: Informative annexes provide commentary, examples, tender evaluation schedules and template forms (Annexes A, F, G, H, I, etc.).

Applications and users

ISO 10845-5 is intended for stakeholders involved in procurement and contract management in the construction sector who aim to achieve socio‑economic procurement objectives, including:

• Employers / contracting authorities wanting to set measurable supplier participation targets.
• Procurement officers drafting tender documents and targeting data.
• Main contractors and subcontractors preparing CPG implementation plans and reporting credits.
• Procurement auditors and compliance officers verifying targeted enterprise status and contractor performance.
• Policy makers and consultants designing local content, local labour or enterprise development programs.

Practical uses include tender evaluation scoring, contract performance measurement, incentive schemes, and monitoring of local or disadvantaged enterprise participation.

Related standards

ISO 10845 series (construction procurement): Parts 1–8 - especially Part 1 (processes) and Part 6–8 (participation requirements for partners, local enterprises and labour) which complement Part 5 when implementing procurement policies. Keywords: ISO 10845-5, construction procurement, contract participation goal, CPG, targeted enterprises, targeting strategy A/B, procurement KPI.