PICC COST DATA & PEC CONTRACT DOCUMENTS

1. PICC COST DATA & PEC CONTRACT DOCUMENTS ByEngr. M. Mazhar-ul-Islam(Chief Executive Officer) Pakistan Institute of Cost & Contracts (PICC) mazhar@picc.org.pk www.picc.org.pk

2. Background • Delayed completion & cost overrun in most of the contracts in Pakistan • Unreasonable construction cost and inadequate cash flows • Cost and contracts are inter-related • Need for a single source data for all construction inputs • Unavailability of data prepared by third party • In the present globalized environment, online availability of such data is vital to bring efficiency, productivity and transparency in determining the right cost of the contracts

3. Introduction to picc • Pakistan Engineering Council (PEC) has taken an initiative & created a success story of development, updating & maintaining such data by creating Pakistan Institute of Cost & Contracts (PICC) as its subsidiary. • PICC is a non-profit, research based institution • Prepares and update web based cost for all construction inputs • Dealing with matters related to engineering contracts

4. PICC Functions • Prepare, update and maintain on PICC website the cost data base for all construction inputs. • Country specific Schedule of Rates (SOR) • Country specific procurement documents • Guidelines for construction cost estimate • Uniform classification system for specs & BOQs • Training, workshops and courses on cost & Contracts • Research on cost & contract

5. PICC ORGANIZATION CHART

6. PICC COST DATA DEVELOPEMENT PICC cost data generally includes: • Unified Schedule of Rates (SoR) • Basic input rates (Materials, Manpower and Machinery) • Composite item Rates • Per unit rates of various facilities • Technical specifications • Model BOQ and Guidelines • Standard methods of measurements

7. PROGRESS Maintaining, monthly updating & progressively uploading on the website the cost data, as per detail given below, for all the districts of Pakistan including AJK and Gilgit-Baltistan: • About 3200 basic input rates • About 1400 composite item rates for concrete, brick masonry, Stone masonry, Block masonry, steel bars, formwork, plastering, pile works, Earthwork and road works etc • Presently about 550,000 data are being monthly updated which are to be increased progressively • Per unit rates and rates for quality control tests

8. PROGRESS • Comprehensive mechanism established for determining the Transportation Charges for various types of terrain. • Technical Specifications for concrete, masonry works, piles and water supply & sanitation are developed and uploaded on website whereas for various other sections are under development. • Standard methods of measurements and Model BOQ & guidelines have been developed in line with the international standards.

9. REVIEW OF PICC COST DATA • National Steering Committee review all PICC Cost Data periodically before hosting. • National Conference of Construction Cost reviewed the PICC products & give their concurrence. • Representative participants are: • University of Engineering & Technology Lahore • Chartered Quantity Surveyor • All Pakistan Contractor’s Association (APCA) • Association of Consulting Engineer Pakistan (ACEP) • Engineering-in Chief’s branch , GHQ Cont’d

10. REVIEW OF PICC COST DATA • National Engineering Services Pakistan Pvt. Ltd. (NESPAK) • Pak PWD Department • WAPDA • P&D Government of Punjab • P&D Government of Baluchistan • National Highway Authority (NHA) • Irrigation Department Govt. of Punjab • Pakistan Standard and Quality Control Authority (PSQCA) • In the MoST Meeting Islamabad (10 April, 2010), The representative from P&D Division, NHA, PAK PWD, MoST, NESPAK endorsed establishment of PICC

11. BASIC INPUT RATES a)Determination: • Rates are collected directly from suppliers / vendors and PICC Market Surveyors from at least three sources for all Divisional HQ. • EXW rates from various geographical locations are also collected. • Transportation charges are applied on EXW rates where required. • If difference between above rates is more than 10%, process is repeated for verification. • Average material rates are determined. • Divisional HQ rates are replicated in the districts under their jurisdiction or based on the geographical locations. • Adjustment of any specific input rate in a particular area is made if there is any special consideration by the Government.

12. BASIC INPUT RATES B. Verification : • Verification through cross checking with the manufactures /suppliers • Verification by comparing with the rates determined by applying transportation charges • Verification through inter-city comparison • Verification by comparing of rates with the other organizations data

13. VIEW OF BASIC INPUT RATES

14. VIEW OF BASIC INPUT RATES

15. VIEW OF BASIC INPUT RATES

16. VIEW OF COMPOSITE ITEM RATES

17. VIEW OF COMPOSITE ITEM RATES

18. BASIS FOR DETERMINATION OF TRANSPORTATION CHARGES • Truck Capacity:Monthly Hired Truck of 10 Ton Capacity • Speed:For a distance of 1 Km the Average Speed is taken 10 Km/hr. An increment of 0.5 Km/hr is considered for each Km upto a maximum average speed of 30 Km/hr • Diesel & Oil Consumption:Diesel@3Km/ Liter & Engine oil@100Km/ Liter • Labor:06 No. Laborers are considered for Loading, Unloading & Stacking within 3/ 4 Hours for each Trip • Allowances For Katcha, Hilly & Hard Hilly Areas:An allowance for Katcha & Hilly Areas is considered as 25% where as For hard Hilly area as 40% • Toll Taxes: Toll Taxes are also included

19. TRANSPORTATION CHARGES A comprehensive mechanism is developed for determining transportation charges in various types of terrain

20. PRICE FLUCTUATION TRENDS OF MAJOR MATERIALS

22. TECHNICAL SPECIFICATIONS Technical Specifications for concrete, masonry works, piles and water supply & sanitation are developed and uploaded on website whereas for various other sections are under development

23. VIEW OF TECHNICAL SPECIFICATIONS

24. UTILITY OF PICC COST DATA • Preparation of budget cost estimates • Preparation of Engineer’s Estimates • Cost validation of PC-1 and third party cost validation • Reference data for resolution of contractual disputes • Reference data for price adjustment • Reference data for Bidders to prepare the bids

25. BENEFITS OF PICC COST DATA • Verification for accuracy of project cost • Transparency in the estimates • Minimize malpractices and corruption • Quality construction • Timely completion • Effective contract administration • Minimizing cost overrun and financial loss to the National exchequer during the currency of contracts • Facilitate Cost Plus project execution

26. SERVICES OFFERED BY PICC

27. PEC AMENDMENT BILL 2010 • Passed by the Parliament on 29th December 2010 • Provision for subsidiary of PEC under Article 3(XXXIV) • Establishing Standards for Engineering Contracts, Cost & Services Article-7 (p) • Election for Chairman, Senior Vice Chairman, Four Vice Chairman of provinces and 40 members • Representation for AJK, Gilgit, Baltistan and FATA • Voters included Registered Engineers and Professional Engineers

28. PEC AMENDMENT BILL 2010 • No Post in an Engineering Organization other then an Engineer • Suo-Moto power given first time to PEC to deal with professional misconduct of Engineers, Consultants. • Contractors & Engineering Organizations (Public or Private) • PEC Functions includes preparation of Bidding documents, Contract Documents, Construction Cost Data, Arbitration and related procedures

29. List of PEC bidding documents • Standard Form of Bidding Documents (Civil Work) • Standard Form of Bidding Docs for Procurement of Works (E & M) • Standard Form of Bidding Documents for Procurement of Works for Smaller Contracts • Standard Form of Contract for Engineering Consultancy Services (Time Based Assignments) • Standard Form of Contract for Engineering Consultancy Services (Lump Sum Assignment) • Standard Form of Contract for Engineering Consultancy Services for Smaller Projects (Cont’d)

30. List of PEC bidding documents • Rules of Conciliation and Arbitration • Standard Procedure for Evaluation of Proposals for Procurement of Engineering Services • Standard Procedure and Formula for Price Adjustment • Standard Procedure for Evaluation of Bids for Procurement of Works • Standard Procedure for pre-qualification of constructors • Standard Procedure for pre-qualification of consultants • Standard Form of Bidding Documents for Procurement of Works on B.O.T Basis (Cont’d)

31. List of PEC bidding documents • Standard Form of Bidding Documents for Procurement of Works on Design-Build Basis • Standard Form of Bidding Documents for Procurement of Works • Standard Forms of joint Venture • Standard Forms of Bidding Document for Procurement of works on EPC/Turnkey Basis • Standard Forms of Bidding Document for Procurement of Goods & Services • Standard Forms of Bidding Document for Operation & Maintenance works

32. Notification FOR PEC BIDDING DOCUMENTS • Circulated to 75 selected Stakeholders • Approved by PEC Executive Committee • Vetted by Law Division • Approved by ECNEC on 28-2-2002 • P&DD notified vide number 8(60)WR/PC/2002 dated 21-8-2002 • PEC notified vide S.R.O 628(I)/2003 dated 21.6.2003 & S.R.O 629(I)/2003 dated 26.6.2003

33. Notification FOR PEC BIDDING DOCUMENTS • ECNEC approved these revised documents on 12-11-2007 • P & D Division notified these revised documents vide No. 8(60)WR/PC/2008 dated 12 February, 2008 • PPRA Notified vide SRO No 805(I/208) dated 11th July 2008 • P&DD notified vide number 1(780)PP&H/PC/2007/Vol-II dated 24.12.2009

34. Advantage of Implementation • Unified documents easy to comprehend by users • Provide pre-determined rules based on equitability • Minimize arbitrary decision by the parties • Increase efficiency and productivity • Minimize disputes- ensure transparency • Facilitate quality construction • Cut delay in project implementation • Develop capacity of Pakistani Constructors • Accelerate self-reliance in documentation

35. Backgrounds • Over hundred (100) various form of contract was used by different Govt./Autonomous/Private bodies • Main feature of these documents - one sided provisions in favor of the Employer • Difficult to implement by contractor/consultants due to wide diversity • Generally not based on International format of Engineering Contract • Various funding agencies have their own documents • Planning Commission Directives – 1989 & 1996

36. Development of Documents • Draft sponsored by Organizations • Permission from FIDIC • Based on International Standards • Task groups for each document • Approval by Committee and Executive Committee • Review by Experts and Stake Holders • Feedback and Updating • Processing for Notification

37. Purpose of Standardization • Provide framework documents • Facilitate user’s productivity • Equitable documents between the parties • Prevent malpractices through unified Formats • International practice of modern contracts • Applicable for projects irrespective of financing • Self reliance in documentation • Compliance of Pakistani Laws • Protect Pakistani interests • Country specific provisions in ICB

38. Country Specific Provisions • Eligibility Clause – requirement of PEC License • Qualification to suit domestic firms • Professional works by Professional • Arbitration under Arbitration Act 1940 • Delayed payment compensation • Domestic preference • Compliance of Pakistani Laws • Use of Pakistani materials and services • Security from Insurance Co.

39. Picture of PICC Headquarter in Lahore

40. CEO PICC, Engr. M. Mazhar-ul-Islam, with some of the PICC staff members after receiving THE LUMINARIES OF THE LAND 2009 Award

41. Workshop on PEC Contract/Bidding Documents. Minister of Housing, Planning & Public Health, Govt. of AJK, Syed Murtaza Gillani addressing the workshop, on the right is CEO PICC, Engr. Mazhar-ul-Islam who was also workshop Moderator

42. ADB Delegation visit to PICC. Picture above (L-R): Jeff Taylor – Sr. Procurement Specialist ADB, Hamid Sharif - Principal Director - Central Operations Services Office (COSO), M. Mazhar Ul Islam – CEO PICC, Ali Farhad Hameed – Manager IT PICC, NaeemAbbas– Procurement Specialist ADB, Terry N. Woods – Procurement Specialist/Consultant ADB.

43. Thankyou