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FI DI C CONTRACTS AND

BEST PROCUREMENT PRACTI CE


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Ministry of Electricity and Dams
Dams Implementation Unit
Contracts Directorate
Ministry of Electricity and Dams - Dams Implementation Unit -Contracts Directorate
FIDIC CONTRACTS
CONSTRUCTI ON


PLANT AND DESI GN-BUI LD /

EPC/TURNKEY PROJ ECTS

SHORT FORM OF CONTRACT

CLI ENT/CONSULTANT MODEL SERVI CES AGREEMENT

Ministry of Electricity and Dams - Dams Implementation Unit -Contracts Directorate
CONDITIONS OF CONTRACT
Guide
published 2001
published 1999
Ministry of Electricity and Dams - Dams Implementation Unit -Contracts Directorate
CONTRACT CONTINUITY
Employer /
consultant
design
Contractor
design
Various formats Uniform format and contents
Ministry of Electricity and Dams - Dams Implementation Unit -Contracts Directorate
WHICH BOOK TO USE?
STRAIGHTFORWARD
PROJECT ? EMPLOYER DESIGN ?
CONTRACTOR DESIGN
plant and/or
high
unforeseen
risks
fixed price - lump sum
little employer
involvement
no major unforeseen
risks
no
no
no
DISCUSS IN DETAIL
Employer s
requirements with
the Contractor, and
negotiate a
modified FIDIC
contract
no
yes
yes
yes
yes
Ministry of Electricity and Dams - Dams Implementation Unit -Contracts Directorate
FEATURES AND ADVANTAGES

fair apportioning of risks, rights and obligations between the parties
BALANCED

WELL TRI ED

long case history for earlier contracts
ACCEPTED

known and recognised; in wide use for international contracts
SUPPORTED

recommended or required by development banks, etc.
EFFECTI VE

clear and complete conditions; time limits; provisions for adjudication
Ministry of Electricity and Dams - Dams Implementation Unit -Contracts Directorate
Key points: CONSTRUCTION
Employer designs
Engineer, working for the Employer
Bill of Quantities
Payments based upon measurements
Certification of payments by Engineer
Ministry of Electricity and Dams - Dams Implementation Unit -Contracts Directorate
Key points: PLANT& DESIGN-BUILD
Contractor designs
Engineer, working for the Employer
Lump sum pricing
Payments according to progress
Certification of payments by Engineer
Ministry of Electricity and Dams - Dams Implementation Unit -Contracts Directorate
Key points: EPC/TURNKEY PROJECTS
Contractor designs and takes full responsibility
Employer may appoint a Representative
Fixed price, to cover risks taken on by Contractor
Payments according to progress
No certification of payments
Ministry of Electricity and Dams - Dams Implementation Unit -Contracts Directorate
Key points: SHORT FORM
Simple projects
Design by either
Employer may appoint a Representative
Valuation as appropriate; to be agreed
Payments according to value of Works executed and
Materials and Plant delivered to site
No certification of payments
Ministry of Electricity and Dams - Dams Implementation Unit -Contracts Directorate
Key points: CLIENT/CONSULTANT
Agreed Scope of Services: Appendix A
Normal, Additional and Exceptional Services
Normal Services priced as agreed
Additional and Exceptional Services at rates agreed
Payment schedule as agreed
Ministry of Electricity and Dams - Dams Implementation Unit -Contracts Directorate
FIDIC GUIDES
The FIDIC Contracts Guide
The White Book Guide
Guide for the preparation of particular conditions
(in the major contracts)
Notes for Guidance (in the Short Form of Contract)
Tendering Procedure and Pre-qualification forms
Consultant Selection
Ministry of Electricity and Dams - Dams Implementation Unit -Contracts Directorate
USE OF FIDIC CONTRACTS
Match contract and project
Decide early on type of contract
Draft by professionals
Do not touch the General Conditions
Buy originals
Ministry of Electricity and Dams - Dams Implementation Unit -Contracts Directorate
PRINCIPLES OF PROCUREMENT
Effectiveness
Economy
Efficiency
Accountability
Transparency / confidentiality /
Strong competition
Publicity, wide participation
Fair and equal conditions
Standard procedures
Standard documentation
Ministry of Electricity and Dams - Dams Implementation Unit -Contracts Directorate
PROCUREMENT CATEGORIES
Goods
Works
Consultant services
Other services
Ministry of Electricity and Dams - Dams Implementation Unit -Contracts Directorate
TENDERING PROCEDURES
Development bank / public procurement procedures
Open tendering / International Competitive Bidding
Local tendering / National Competitive Bidding
Restricted tendering / Limited Bidding
Single source
Two stage tendering
Ministry of Electricity and Dams - Dams Implementation Unit -Contracts Directorate
SELECTION PROCEDURES/CRITERIA
Criteria defined and published in advance
Economically most advantageous offer
Quality based selection
Quality and cost based selection
Ministry of Electricity and Dams - Dams Implementation Unit -Contracts Directorate
Establishment Of Project Strategy Comprising:
Procurement method
Form of tendering
Time schedules
FIDIC TENDERING PROCEDURE( FOR
CONSTRUCTION CONTRACTS)
1.0 ESTABLISHMENT of PROJECT STRATEGY
Ministry of Electricity and Dams - Dams Implementation Unit -Contracts Directorate
Prepare Prequalification Documents Comprising:
Letter of Invitation
Information about prequalification procedure
Project information
Prequalification application
2.1 PREPARATION of PREQUALIFICATION
DOCUMENTS
Ministry of Electricity and Dams - Dams Implementation Unit -Contracts Directorate
2.2 INVITATION TO PREQUALIFY
Place Prequalification Advertisement In Press, Embassies
etc. as appropriate stating:
Employer & Engineer
Outline of project (scope, location, programme, source of
finance)
Dates for issue of tender documents, & submission of tenders
Instruction for applying for prequalification
Minimum requirements for prequalification
Submission date for contractors prequalification data
Ministry of Electricity and Dams - Dams Implementation Unit -Contracts Directorate
2.3 ISSUE & SUBMISSION OF PREQUALIFICATION DOCUMENTS
Issue prequalification documents & Questionnaires requesting from
each company/joint venture:
Organisation & structure
Experience in the intended type of work & the region
Resources:
- Managerial
- Technical
- Labour
- Plant
Financial Statement
Current contract commitments
Litigation history
Ministry of Electricity and Dams - Dams Implementation Unit -Contracts Directorate
2.4 ANALYSIS OF PREQUALIFICATION APPLICATIONS
Analysis Prequalification Applications Data:
Company/joint venture structure
Experience
Resources
Financial Capability : Annual Turnover, Working
Capital= Ratio of Current Assets to Current
Liabilities ( > 1.0 )
General suitability
Ministry of Electricity and Dams - Dams Implementation Unit -Contracts Directorate
2.5 SELECTION OF TENDERERS
Prepare List of Tenderers
Ministry of Electricity and Dams - Dams Implementation Unit -Contracts Directorate
2.6 NOTIFICATION OF APPLICANTS
Ministry of Electricity and Dams - Dams Implementation Unit -Contracts Directorate
Notify all selected tenderers
3.1 PREPARATION OF TENDER DOCUMENTS
Prepare Tender Documents:
Letter of Invitation to tender
Instructions to tenderers
Condition of Contract
Form of tender and appendices
Drawings
Bill of Quantities
Schedule of additional
information
Ministry of Electricity and Dams - Dams Implementation Unit -Contracts Directorate
3.2 ISSUE OF TENDER DOCUMENTS
Issue tender documents to
contractors on list of tenderers
Ministry of Electricity and Dams - Dams Implementation Unit -Contracts Directorate
3.3 VISIT TO SITE BY TENDERERS
Arrange Date and Time for Visit
to Site
Ministry of Electricity and Dams - Dams Implementation Unit -Contracts Directorate
Ministry of Electricity and Dams - Dams Implementation Unit -Contracts Directorate
3.4 TENDERERS QUERIES
A) CORRESPONDENCE METHOD
B) TENDERERS CONFERENCE METHOD
A) Prepare replies
A) Inform tenders present of queries and replies
submitted in writing replies to queries at
conference
Send Minutes to all Tenderers ( Parity of
Tendering)
Ministry of Electricity and Dams - Dams Implementation Unit -Contracts Directorate
3.5 ADDENDA TO TENDER
DOCUMENTS
Issue Addenda Including Replies
to queries to all tenderers
Ministry of Electricity and Dams - Dams Implementation Unit -Contracts Directorate
3.6 SUBMISSION AND RECIPT OF TENDERS
Record date and time of receipt
Acknowledge receipt or return unopened
tenders received late
Ministry of Electricity and Dams - Dams Implementation Unit -Contracts Directorate
4.1 OPENING OF TENDERS
Tender opening by public or restricted opening:
announce and record the names of tenderers
and price, including price for alternative tenders
if appropriate
announce and record the names of tenderer (if
any) disqualified due to late or non arrival of
tenders
Ministry of Electricity and Dams - Dams Implementation Unit -Contracts Directorate
5.1 REVIEW OF TENDERS
Establish conformity and completeness of tenders:
Reject Substantially Unresponsive Tenders
Establish conformity and completeness of tenders:
Reject Substantially Unresponsive Tenders
Establish conformity and completeness of tenders:
Ministry of Electricity and Dams - Dams Implementation Unit -Contracts Directorate
5.2 TENDERS CONTAINING DEVIATIONS
Evaluate Deviations, Seek Clarifications Evaluate Deviations, Seek Clarification Evaluate Deviations Seek Clarification
Ministry of Electricity and Dams - Dams Implementation Unit -Contracts Directorate
5.3 ADJUDICATION OF TENDERS
Assess tenders in accordance with evaluation criteria .
Raise further points requiring clarification, if any.
Complete evaluation.
Check with funding agency.
Reject non- conforming tenders & advise tenderer(s) concerned.
Ministry of Electricity and Dams - Dams Implementation Unit -Contracts Directorate
6.0 AWARD OF CONTRACT
Decide on contract award, if necessary after
pre- award discussion
Ministry of Electricity and Dams - Dams Implementation Unit -Contracts Directorate
6.1 ISSUE LETTER OF ACCEPTANCE
Issue Letter of Acceptance
Ministry of Electricity and Dams - Dams Implementation Unit -Contracts Directorate
6.2 PERFORMANCE SECURITY
Obtain Performance Security From Contractor
Ministry of Electricity and Dams - Dams Implementation Unit -Contracts Directorate
6.3 PREPARATION OF CONTRACT
AGREEMENT
Prepare Contract Documents
Signing of Contract
Ministry of Electricity and Dams - Dams Implementation Unit -Contracts Directorate
6.4 NOTIFICATION OF UNSUCCESSFUL TENDERERS
Advise Unsuccessful Tenderers And Return Tender
Security (If Provided)
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FIDIC Tendering Procedure
FIDIC Standard Prequalification Form for Contractors