Lecture # 7
Civil Engineering Practice
Works and Tenders.
Instructor:
Engr. Dr. Attaullah Shah
Department of Civil Engineering
Swedish College of Engineering and Technology-Wah Cantt.
2
What is a Project?
• An adhoc endeavor to create a Unique Product or Service.
• A unique one time effort bound by cost, time and
resources/technical performance ( CST) and has defined
objectives to satisfy the customer needs.
• Project is an undertaking having definite objectives, and
specific beginning and ending points, limited budgets,
defined scope.
•
Sum of certain activities and tasks required to be performed
in a specified period of time with human and non-human
resources for specified objectives.
( Is your training a project? )
• Project is a one time non-routine opportunity to develop a
new product.
To satisfy the customer to achieve the organizational
objectives.
To be completed with in
– Allocated budget.
– Scheduled Time.
– Approved Technical Performance.
– Approved and agreed Scope of Work.
– Without any change in the existing culture.
4
Triple constraints
5
What is management?
The process of Planning, Organizing, Staffing, controlling and
leading.
Project management:
The art of Directing and coordinating the human and non human
Resources throughout the life of project by using modern
Management techniques to achieve pre-determined objectives of
scope, cost, time, quality and participants satisfaction.
( Project Management Institute America)
• Project management includes:
- Project Appraisal
( Before Commencement of Project PC-I, PC-II).
- Project monitoring.
( During Execution of the Projects PC-III)
- Project Evaluation
( After Completion of the projects. PC-IV,PC-V)
Project Life-Cycle
Project Planning( Pre-Investment Studies):
– Project Opportunity Analysis ( Identification)
– Project Selection & Problem analysis.
– Project Pre-feasibility studies.
– Project Feasibility Studies
– Preliminary Design
– Cost Estimation.
Implementation ( Investment Phase)
–
–
–
–
–
–
–
–
Detailed Design.
Pre-qualification of bidders
Tendering & Negotiation
Construction and developing the facility
Test
Deployment
Operation
Commissioning
Maintenance.
–
–
–
–
Up-keeping ( Preventive)
Adoptive Maintenance ( Project Integration).
Enhancement
Decommission
What is management?
The process of Planning, Organizing, Staffing, controlling and
leading.
Project management:
The art of Directing and coordinating the human and non human
Resources throughout the life of project by using modern
Management techniques to achieve pre-determined objectives of
scope, cost, time, quality and participants satisfaction.
( Project Management Institute America)
• Project management includes:
- Project Appraisal
( Before Commencement of Project PC-I, PC-II).
- Project monitoring.
( During Execution of the Projects PC-III)
- Project Evaluation
( After Completion of the projects. PC-IV,PC-V)
Different Forms used by
Planning Commission
of Pakistan.
PC-I Forms
- Production Sectors - Infrastructure Sectors
- Social Sectors.
PC-II Form
Survey and Feasibility Studies.
PC-III Form
PC-III (A) form for Physical Targets based on
PSDP Allocations & Activity Chart. PC-III(B) Monthly
Progress Reporting.
PC-IV Form
Project Completion Report.
PC-V Form
Annual Performance Report After Completion of Project
Procurement Management
• Procurement is acquisition of goods and services.
• Project Procurement Management includes the contract
management and change control processes required to
administer contracts or purchase orders issued by
authorized project team members.
Procurement Cycle

• Plan Purchases and Acquisitions. Determining what to
purchase or acquire and determining when and how.
– Purchase of equipment
– Procurement of works
– Procurement of supplies etc
• Plan Contracting – documenting products, services,
and results requirements and identifying potential
sellers.
– Developing the requisite documents
– Specification
– No and make etc.
• Request Seller Responses.
– obtaining information, quotations, bids, offers ,or proposals, as appropriate.
–
–
–
–
Inviting bids
Inviting quotations
Request for Proposals ( RPFs)
Expression of Interest ( EOI) etc.
• Select Sellers.
– Reviewing offers, choosing among potential sellers, and
negotiating a written contract with each seller.
– Tender/bids opening
– Evaluation and Assessment of bids
– Negotiation if required and allowed
– Selection of the seller/contractor
• Contract Administration –
– Managing the contract and relationship between the buyer and seller.
– Reviewing and documenting how a seller is performing or has
performed to establish required corrective actions
– Provide a basis for future relationships with the seller,
– Managing contract-related changes and, when appropriate,
– Managing the contractual relationship with the outside buyer.
– Contract Agreement
• Contract Closure –
– completing and settling each contract, including the resolution of any
open items,
– Closing each contract applicable to the project or a project phase.
Procurement Planning
– Make-or-Buy Analysis
– Whether a particular product or service can be produced by the
project team or can be purchased.
– Expert Judgment
– Expert purchasing judgment can also be used to develop or
modify the criteria that will be used to evaluate offers or
proposals made by sellers.
– Contract Types
– Different types of contracts are more or less appropriate for
Different types of purchases.
• Fixed-price or lump-sum contracts.
• Cost-reimbursable contracts.( cost Plus)
• Time and Material (T&M) contracts.
• Fixed Price contracts
•
•
•
•
•
•
•
Fixed price or lump sum
Cost price with re-determination
Fixed price plus incentive fee.
Fixed price plus economic price adjustment
Fixed price with successive targets incentives
Fixed price for service material and labor at cost.
Time and material labor hours only.
• Others methods:
•
•
•
•
•
•
•
Turnkey
Bonus - Penalty
Joint venture
Combination of the above
BOOT ( Build Operate Own and Transfer
BOT ( Build Operate and Transfer)
Build Lease and Transfer ( BLT)
Plan Contracting: Outputs
• Procurement Documents
– Procurement documents are used to seek proposals from
prospective sellers.
– A term such as bid, tender, or quotation is generally used when
the seller selection decision will be based on price (as when
buying commercial or standard items),
– A term such as proposal is generally used when other
considerations, such as technical skills or technical approach, are
paramount.
• Evaluation Criteria
– Evaluation criteria are developed and used to rate or score
proposals. They can be objective or subjective Evaluation
criteria are often included as part of the procurement documents.
• Other Selection criteria
Understanding of need. How well does the seller’s proposal address the contract
statement of work?
– Overall or life-cycle cost. Will the selected seller produce the lowest total cost
(purchase cost plus operating cost)?
– Technical capability.
– Management approach.
• Technical approach.
– Financial capacity. Does the seller have, or can the seller reasonably be
expected to obtain, the necessary financial resources?
– Production capacity and interest. Does the seller have the capacity and
interest to meet potential future requirements?
• Business size and type.
•
References. Can the seller provide references from prior customers verifying the
seller’s work experience and compliance with contractual requirements?
• Intellectual property rights. Does the seller assert intellectual property rights in
the work processes or services they will use or in the products they will produce
for the project?
• Proprietary rights. Does the seller assert proprietary rights in the work
processes or services they will use or in the products they will produce for the
project?
Request Seller Responses: Tools and Techniques
•
Bidder Conferences
– Meetings with prospective sellers prior to preparation of a bid or
proposal.
– To have a clear, common understanding of the procurement
– All potential sellers are given equal standing during this initial buyer
and seller interaction to produce the best bid.
– Advertising
– Develop Qualified Sellers List
– Qualified sellers lists can be developed from the organizational assets if
such lists or information are readily available. Whether or not that data is
available, the project team can also develop its own sources.
Select Sellers
•
Selection decision process:
– cost can be the primary determinant for an off-the-shelf item,
– Proposals are often separated into technical (approach) and commercial (price)
sections, with each evaluated separately.
– Multiple sources could be required for critical products, services, and results to
mitigate risks that can be associated with issues such as delivery schedules and
quality requirements.
– Select a single seller that will be asked to sign a standard contract.
– Establish a negotiating sequence by ranking all proposals by the weighed
evaluation scores assigned to each proposal.
– On major procurement items, the overall process of requesting responses from
sellers and evaluating sellers’ responses can be repeated.
– A short list of qualified sellers can be established based on a preliminary proposal.
A more detailed evaluation can then be conducted based on a more detailed and
comprehensive proposal that is requested from the sellers on the short list.
Select Seller Techniques
•
•
•
•
•
•
Weighting System
Independent Estimates
Screening System
Contract Negotiation
Seller Rating Systems
Expert Judgment
Contract
• A contract is awarded to each selected seller.
•The contract can be in the form of a complex
document or a simple purchase order.
• Regardless of the document’s complexity, a
contract is a mutually binding legal agreement
that obligates the seller to provide the specified
products, services, or results, and obligates the
buyer to pay the seller.
Contract Administration: Tools and Techniques
• Contract Change Control System
• A contract change control system defines the process by which the
contract can be modified.
• Buyer-Conducted Performance Review
• Inspections and Audits
• Performance Reporting
Contract Closure
• The Contract Closure process supports the Close procurement
process since it involves verification that all work and
deliverables were acceptable.
• Contract Closure: Tools and Techniques
– Procurement Audits
– A procurement audit is a structured review of the
procurement process from the Plan Purchases and
Acquisitions process
– Records Management System
Procedures of Open competitive Bidding under PPRA
Rules 2004.
One Envelope Procedure
• Each bid shall comprise one single envelopes containing, separately, financial
proposal and technical proposal (if any)
– Open competitive bidding procedure used for most of the procurement.
– where the scope and technical specification of the procurements are very clear and
unambiguous.
– For projects of repetitive nature and where a pool of registered contractors with the
departments is available sometimes.
–
In this procurement mode, the financially lowest bid is generally selected.
–
Such procurements become victim of low bidder dilemma as the bidding firms.
–
Poor history of successful procurements by this method.
– Preferred for small and clear procurements.
Two Envelops Procedure
i)
The bid shall comprise a single package
containing two separate envelopes. Each
envelope shall contain separately the
financial proposal and the technical
proposal:
ii) The envelopes shall be marked as
“FINANCIAL PROPOSAL”
and
“TECHNICLA PROPOSAL” in bold and
legible letters to avoid confusion.
Two Stage Bidding Procedure
First Stage (Tech Proposal )
i) The bidders shall submit, according to the required
specifications, a technical proposal without price,
i)
The technical proposal shall be evaluated in accordance
with the specified evaluation criteria and may be
discussed with the bidders regarding any deficiencies and
unsatisfactory technical features.
Continued
iii)
After such discussions, all the bidders shall be permitted to revise
their respective technical proposals to meet the requirements of
the procuring agency;
iii)
The procuring agency may delete, modify or add any aspect of the
technical requirements or evaluation criteria, or it may add new
requirements or criteria not inconsistent with these rules.
Continued
• Such revisions, deletions, modifications or additions are
communicated to all the bidders equally at the time of invitation
to submit final bids, and that sufficient time is allowed to the
bidders to prepare their revised bids:
• Such allowance of time shall not be less than fifteen days in the
case of national competitive bidding and thirty days in the case
of international competitive bidding;
Continued
v) Those bidders not willing to conform their
respective bids to the procuring agency’s
technical requirements may be allowed to
withdraw from the bidding without
forfeiture of their bid security.
Second stage (Revised Tech Proposal)
i)
The bidders, whose technical proposals or
bids have not been rejected and who are
willing, to conform their bids to the
revised technical requirements shall be
invited to submit a revised technical
proposal along with the financial
proposal.
Continued
ii) The revised technical proposal and the financial
proposal shall be opened at a time date and
venue announced and communicated to the
bidders in advance; and
iii) The revised technical proposal and the financial
proposal shall be evaluated in the manner
prescribed above. The bid found to be the
lowest evaluated bid shall be accepted.
 Best for projects of technical nature.
 Where the firm’s capacity to deal with the complexity of the project is
critical to the successful implementation of the project
 The scaling of technical and financial score depends on the nature of the
project and relevant importance of the of each major criteria
 Typical range from 50:50 to 70:30 for technical: financial respectively.
 For mega IT projects, where the technical expertise, global partnership
and relevant experience of the firm are of paramount importance, the
technical part can be given a score of 70 or even 80.
Technical Evaluation for ICT project at AIOU
Criteria
Marks
Nature of Firm
( 10)
Max
Individual firm: 02
03
Partnership:
05
Company:
Add 1 mark per year
since establishment Max
5 marks
and
Offices
Outreach
( 10)
Islamabad
office: 05
01
Other:
per
marks
office max: 05
Methodology and
approach
( 20)
Experience of similar works
In hand
(25)
Min
For
two similar
works: 10
2
Add
marks per
work.
Completed
( 15)
For Min four
works: 05
Add 01 marks
for add work
References.
( 10)
National: 05
Intn’l; 5
Financial
soundness and
bank references
( 10)
Balance sheets:
05
Income Stat:03
Bank reference:
02
Key personnel
for the project
( 10)
Total Marks
( 100)
Team leader:
05
team
Core
members: 10
Obtained.
One Stage Two envelope
bidding procedure:i)
The bid shall comprise a single package containing
two separate envelopes containing separately the
financial proposal and the technical proposal;
i)
The envelopes shall be marked as “FINANCIAL
PROPOSAL” and TECHNICAL PROPOSAL” in bold
and legible letters to avoid confusion;
Continued
initially, only the envelope marked “TECHNICAL
PROPOSAL” shall be opened;
iv) The envelope marked as “FINANCIAL PROPOSAL” shall be
retained in the custody of the procuring agency without being
opened.
v) The technical proposal shall be evaluated on the laid down
criteria.
vi) The financial bids of the firm fulfilling the criteria are opened
and remaining are returned un-opened.
vii) The lowest evaluated bid based on the technical and financial
bids is approved.
iii)
Performance Guarantee
• Where needed and clearly expressed in the
bidding documents, the procuring agency
shall require the successful bidder to furnish
a performance guarantee which shall not
exceed ten per cent of the contract amount.
Two Stage Bidding Procedure
•
First Stage (Tech Proposal)
–
–
–
–
The bidders shall submit, according to the required
specifications, a technical proposal without price,
The technical proposal shall be evaluated in accordance with the
specified evaluation criteria and may be discussed with the
bidders regarding any deficiencies and unsatisfactory technical
features,
After such discussions, all the bidders shall be permitted to
revise their respective technical proposals to meet the
requirements of the procuring agency;
The procuring agency may delete, modify or add any aspect of
the
– technical requirements or evaluation criteria, or it may add new
requirements or criteria not inconsistent with these rules.
– Such revisions, deletions, modifications or additions are
communicated to all the bidders equally at the time of invitation to
submit final bids, and that sufficient time is allowed to the bidders
to prepare their revised bids:
– Such allowance of time shall not be less than fifteen days in the case
of national competitive bidding and thirty days in the case of
international competitive bidding;
– Those bidders not willing to conform their respective bids to the
procuring agency’s technical requirements may be allowed to
withdraw from the bidding without forfeiture of their bid security.
Second Stage:
•
The bidders, whose technical proposals or bids have not
been rejected and who are willing, to conform their bids to
the revised technical requirements shall be invited to
submit a revised technical proposal along with the
financial proposal.
•
The revised technical proposal and the financial proposal
shall be opened at a time date and venue announced and
communicated to the bidders in advance; and
•
The revised technical proposal and the financial proposal
shall be evaluated in the manner prescribed above. The bid
found to be the lowest evaluated bid shall be accepted.
• Best for
– Best suited for Large Civil Works projects,
heavy equipment and complex projects
– Where the available information and in-house
expertise of the procuring agency is not enough
to deal with.
– The feedback of the firm may provide some
additional information on the procurement.
Thank You