Training programme on procurement for end recipients
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Bölgesel Rekabet Edebilirlik Operasyonel Programı’nın Uygulanması için Kurumsal Kapasitenin Oluşturulmasına Yönelik Teknik Yardım Technical Assistance on Institutional Building for the Implementation of RCOP in Turkey. Training Programme on Procurement for End Recipients. Trainer: Aslı Gülgör

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Training programme on procurement for end recipients

Bölgesel Rekabet Edebilirlik Operasyonel Programı’nın Uygulanması için Kurumsal Kapasitenin Oluşturulmasına Yönelik Teknik Yardım

Technical Assistance on Institutional Building for the Implementation of RCOP in Turkey

Training Programme on Procurement for End Recipients

Trainer: Aslı Gülgör

Procurement of Contract Management Non Key Expert


Training programme on procurement for end recipients

Works Contracts


For works

For works..


Training programme on procurement for end recipients

  • PRAG in Procurement and Contract Management

  • FIDIC in Implementation(execution)


Training programme on procurement for end recipients

What is tendering?

Why do we tender?


Training programme on procurement for end recipients

Vision in Tendering


Training programme on procurement for end recipients

  • Vision

  • Rugged (Reliable)

High Performance (Short Life)

Basic (Cheap)

Luxury (Expensive) Long Life


Short lists

Short Lists


Criteria

Criteria..

  • Performance

  • Consumption

  • Compactness

  • Reliability

  • Design Life

  • Operability

  • Compatibility


Training programme on procurement for end recipients

Conditions of Contract


Training programme on procurement for end recipients

Fédération Internationale des Ingénieurs- Conseils


Training programme on procurement for end recipients

  • Founded in 1913

  • An umbrella organization with the membership of national associations

  • Has more than 70 members

  • Represents the consulting industry


Fidic documents

FIDIC Documents

  • Contracts

  • Agreements

  • Procedures

  • Consultancy Documents

  • Information Documents


Standard contracts

Standard Contracts

  • FIDIC

  • NEC

  • ICE (The Institution of Civil Engineers)

  • AIA (American Institute of Architects)

  • Engineering Advancement Association of Japan

  • Construction Industry Development Board Singapore

  • Kreditanlage für Wiederaufbau, Germany

  • Joint Contracts Tribunal for the Standard Form of Building Contracts


Fidic

FIDIC

  • ATCEA – Association of Turkish Consulting Engineers and Architects

  • (TMMMB - Türk Müşavir Mühendisler ve Mimarlar Birliği)

    • is the only representative body of FIDIC in Turkey;

    • Established in Ankara in 1980 and has over 200 members;

    • ATCEA is a member of FIDIC since 1987;

    • Sells and distributes its own publications as well as FIDIC’s

    • In EU funded projects, ATCEA is requested to appoint the DAB

    • www.tmmmb.org.tr / www.atcea.org.tr


Fidic1

FIDIC

  • Standardisation both in technical and administrative matters is essential for the successful completion of projects of civil engineering constructions;

  • FIDIC is known throughout the world for producing standard forms of contract for civil engineering construction, and mechanical and electrical plant to govern international contracts;

  • In 1999, FIDIC standardised its model contracts, with the publication of first editions of a new family of contracts comprising four new standard forms of contract:

    • Conditions of Contract for Construction (“Red Book”)

    • Conditions of Contract for Plant and Design-Build (“Yellow Book”)

    • Conditions of Contract for EPC/Turnkey Projects (“Silver Book”)

    • Short Form of Contract (“Green Book”)


Why fidic

Why FIDIC

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

  • WELL TRIEDlong case history for earlier contracts

  • ACCEPTED known and recognised; in wide use for international contracts

  • SUPPORTED recommended or required by development banks, International Financial Institutions, large development funds, etc.

  • EFFECTIVE clear and complete conditions; time limits; provisions for adjudication


Fidic standard form of contracts

FIDIC New Red Book

FIDIC New Yellow Book

FIDIC Green Book

FIDIC Silver Book

FIDIC Orange Book

FIDIC New White Book

FIDIC Standard Form of Contracts


The new red book

The New Red Book

  • The Client carries out all the engineering services and copes with the risks.

  • The Consultant is responsible for the management and supervision.

  • Checking and supervision of the design and Works, approval of those or rejection are Consultant's responsibilities

  • The Contractor is paid per production and based on unit prices, risk of cost overrun is the risk of the Client.

  • During the implementation of the Works detailed tests are performed. Usually tests are simpler during the Handover Period and Start-up.

  • Disputes are caused are due to unexpected extra Works and increase of Cost.

  • There is usually a cost overrun

  • Consultant works as a daily Arbitrator.


The new yellow book

The New Yellow Book

  • The Contractor carries out all the detail engineering services.

  • The Contract deals not with "HOW TO DO" but with "WHAT TO DO"

  • The main document is the "Employers Requirements" and explains what performance and quality is expected.

  • The Contractor takes most of the risks including the overrun in quantity and cost.

  • The Client may hold the authority to approve the design.

  • Management and supervision of the contract is carried out by the Consultant.

  • Checking and supervision of the design and Works, approval of those or rejection are Consultant's responsibilities

  • The Contractor is paid on a calendar basis at on some milestones.

  • During the implementation of the Works simpler tests are performed. Usually tests are more complicated during the Handover Period and Start-up.

  • Disputes are caused are due to different interpretation of the "Employer's Requirements"

  • Consultant works as a daily Arbitrator.


The silver book

The Silver Book

  • The contractor is the designer

  • The main document is the Client requisition and it defines the products.

  • The contractor is the complete risk taker for the cost and price increases.

  • All the work is done on turn key basis by the contractor.

  • Design authorization is not necessary.

  • Consultant is not needed. The Contractor has the control.

  • The payment is made according to the calendar or per product.

  • Tests are not carried out during work. The tests carried out for the products are highly detailed.

  • Problems appear at the end of the work.

  • Conflicts are mostly solved by arbitration.


The green book

The Green Book

  • Client's Representative replace the Consultant

  • Design may be carried out by the Client or the Contractor.

  • Work may be implemented and paid on unit price or lump sum

  • The design made by the Contractor may be approved by the Client or by the Client's Representative.

  • The Client has the right to supervise the design and the Works.

  • Quality assurance is in Contractor's responsibility.

  • Cost overrun may occur due to poor cost monitoring.

  • Whoever is liable for the design is also take the risk of quantity and cost overrun.


Training programme on procurement for end recipients

WHICH BOOK ?

Is it a straightforward and simple project?

Is there any risk on design or process?

no

no

yes

yes

Are the market and the unprecedented risks high?

Fixed price – turn key

Restricted client contribution

High market risks

yes

no

no

DETAILED EXAMINATION

Correct according to Client`s requisitions and then create a modified contract


Other documents

Other Documents


Training programme on procurement for end recipients

PRAG

The Practical Guide demands some particularisations of FIDIC and some usage of non-FIDIC forms. Primarily EU wants a ”say” in:-

  • The acceptance of the selected bidder

  • Origination of Goods

  • The powers of the Engineer to commit money

  • Avoidance of Corrupt Practices

  • Joint Ventures


Training programme on procurement for end recipients

PRAG

Letter of Acceptance

”No Letter of Acceptance will be issued under this contract. Only the signing of the Contract Agreement by the Employer will constitute formal acceptance of the Tender. Any activities referred to in the Contract which relate to the date of issue of the Letter of Acceptance shall be construed as being determined from the date of signing of the Agreement by the Employer”


Training programme on procurement for end recipients

PRAG

  • Eligibility Rule

  • Also for Works Contracts


Training programme on procurement for end recipients

PRAG

Limitation of Engineer’s Powers

  • The phrase “particular conditions” in the General Conditions of Contract shall be synonymous with the phrase “Special Conditions” used in latest edition of the EU Practical Guide.

  • The Engineer shall obtain the specific approval of the Employer before taking action under the following Sub-Clauses of these Conditions:

  • (a)Sub-Clause 3.5: agreeing or determining any matter which will increase the Contract Price.

  • (b)Sub-Clause 8.4: agreeing or determining an extension of the Time for Completion;

  • (c)Clause 13: Instructing a Variation which is expected to change the Contract Price or change the scope, character or quality of the Works.

  • Notwithstanding the above inserted sub-clauses the Engineer may act in isolation to alter the Contract Price in a matter which urgently affects the safety of the site, the workers and the public.


Training programme on procurement for end recipients

PRAG - FIDIC Integration


Training programme on procurement for end recipients

Advanced Training PRAG Works 5-7 April 2011

PRAG Works

This project is co-financed by the European Union and the Republic of Turkey

  • PRAG & FIDIC integration

    • PRAG; Practical Guide to Contract Procedures for EU ExternalActions

    • FIDIC; conditions of contract

    • FIDIC replaces/changes certain documents of PRAG, but

    • Mainly they complement each other.

    • It is important to understand what each stands for in practice…


Training programme on procurement for end recipients

Works Contracts

  • Work Contract Types by nature

  • Construction (Employer’s Design FIDIC RED BOOK)

  • Plant and Design – Build (FIDIC YELLOW BOOK)

  • Design Build Operate

    • (FIDIC YELLOW BOOK)

    • (FIDIC GOLD BOOK – still not finalized)

  • EPC (Engineer Procure Construct) /Turnkey Projects (FIDIC SILVER BOOK)


  • Training programme on procurement for end recipients

    Advanced Training PRAG Works 5-7 April 2011

    Procurement Procedures

    This project is co-financed by the European Union and the Republic of Turkey


    Training programme on procurement for end recipients

    Advanced Training PRAG Works 5-7 April 2011

    Single Tender

    This project is co-financed by th European Union and the Republic of Turkey

    • ≤ € 20.000

    • PRAG 2.4.8 defines the procedures

    • Single tenderer is sufficient

    • Basic principles should be met (eligibility rules, capacity, exclusion criteria, etc.)


    Training programme on procurement for end recipients

    Competitive Negotiated Procedure

    • 3 contractors are invited (InvitationLetter + Tender Dossier)

    • 30 days for submission of proposals

    • Tenders are evaluated by a committee of 3

    • 1 compliant tender is sufficient to award

    • After 2 successive failures CA may proceed with negotiated procedure

      • Subject to prior approval of the EC


    Training programme on procurement for end recipients

    Advanced Training PRAG Works 5-7 April 2011

    Local Open Tenders

    • No Prior Information Notice notice

    • Not published on the OJ of EC but on the OJ of the Beneficiary Country or equivalent media

    • CN (short form) must also be published on the Europeaid website

      • Give 15 days for translation

    • Equal opportunities for the eligible contractors located outside the Beneficiary Country


    Training programme on procurement for end recipients

    Advanced Training PRAG Works 5-7 April 2011

    International Open Tenders

    • PIN must be published on the Europeaid website

      • Give 15 days for translation

    • CN must be published in OJ of EC and on the OJ of the Beneficiary Country or equivalent media

    • CN must also be published on the Europeaid website

      • Give 15 days for translation


    Training programme on procurement for end recipients

    Sequence of Events

    • Time planning is crucial for successful tendering & contracting

    • Supervision and Work Tenders have to run in parallel;

      • Relevant contracts should be signed after securing the other,

      • Supervision contract should commence before the relevant works contract (ideally1 month)


    Training programme on procurement for end recipients

    Works Procurement Sequence ERAs

    • RED BOOK

    • Meetings with End Users and Suppliers for a proper TS

    • Preparation of the Design Concept / Note

    • Alternative Conceptual Designs (2 to 3)

    • Presentation and discussion on conceptual designs

    • Revisions and approval of the conceptual design

    • Engineering calculations

    • Detailed Execution Designs (Volume 5)

    • Technical Specifications (Volume 3)

    • Bill of Quantities & Financial Proposal (Volume 4)

    • Volume 1 & 2


    Training programme on procurement for end recipients

    Do not forget

    • Please note that;

    • This is a team’s work

    • It is not simply a works tender dossier;

      • There is design of a building/facility from scratch

      • There are laws and regulations that have to be addressed

      • Design responsibility / indemnity insurance should be confirmed

    • It takes time minimum 5 months


    Training programme on procurement for end recipients

    Dividing Lots

    • When and why do we need them?

      • Not for artificial splits to lower thresholds and shorten tendering periods

      • To secure contracting

      • To ease implementation (fewer contracts areeasier to manage)

      • To assign appropriate contractors

      • To have a sector focused approach

    • Supervision contract(s) should also be assessed accordingly


    Particular conditions of contract

    Particular Conditions of Contract

    • The Particular Conditions take priority over the General Conditions

    • Are the instrument for the Contracting Authority/ Beneficiary, for introducing the particular aspects of the local legislation, or of the project.

    • The General Conditions can be applied for any project, anywhere in the world, but will never be able to deal with the specific issues related to a specific project, nor to the legislation of a certain country


    Particular conditions of contract1

    Particular Conditions of Contract

    • The PC should provide all relevant conditions that relate to the projects and the laws of the contract, which add, complement, or amend the General C

    • In drafting the PC, one must pay particular attention to cross-reference with all other interconnected Clauses that may be affected.

    • Make sure you don’t create ambiguities with other Clauses, or provisions of other documents

    • Major exercise in cross referencing PC with:

      • GC

      • Technical Specifications

      • Schedule/ Annexes (e.g. delivery schedule)


    Particular conditions of contract2

    Particular Conditions of Contract

    • Examples should be only used after verifying they are suitable for your specific case and adapted accordingly

    • The guidance is to assist writers of the special conditions, by giving options for various sub-clauses where appropriate

    • It is recommendable that suitably-qualified engineers (technical staff) to prepare documents and a review by a suitably-qualified legal advisers

    • There is no specific Clause in the General C requiring additional data to be included in the PC, this is done only when and as much as necessary

    • Any modification of existing Clauses, or insertion of a new Clause, must be made for a clear reason and only in conjunction with the other Clauses

    • PC will only contain modified Clauses, without repeating the ones from GC that are not modified


    Main aspects to be addressed in pc

    Main aspects to be addressed in PC

    • Applicable law and language

    • Contractor’s obligations

    • Performances/ Insurances

    • Timetable/ Schedules

    • Documents/ Drawings/ Specifications/ Manuals

    • Patents and licences

    • Variations of contracted quantities


    Main aspects to be addressed in pc1

    Main aspects to be addressed in PC

    • Quality levels

    • Inspection/ Testing at the delivery, Testing after installation

    • Acceptance

    • Payments methods/ schedules

    • Delivery – place, risks, related documents and procedures

    • Warranty/ After-sales services

    • Disputes resolution


    Bill of quantities boqs

    Bill of Quantities-BoQs

    The objectives of BoQs are;

    • to provide sufficient information on the quantities of Works to be performed toenable Bids to be prepared efficiently and accurately

    • when a Contract has been entered into, to provide a priced (BOQ) for use inthe periodic evaluation of Works executed.

      In order to attain these objectives, Works should be itemized in the (BOQ) in sufficientdetail to distinguish between the different classes of Works, or between Works of thesame nature carried out in different locations or in other circumstances which may giverise to different considerations of cost.

      Consistent with these requirements, the layout andcontent of the (BOQ) should be as simple and brief as possible.


    Bill of quantities boqs1

    Bill of Quantities-BoQs

    The Bill of Quantities should be divided generally into the following sections:

    • a. Preamble;

    • b. Work Items (grouped into parts);

    • c. Daywork Schedule; and

    • d. Summary.


    Boqs preamble

    BoQs Preamble

    The Preamble should indicate the inclusiveness of the unit prices, and should state the methods of measurementthat have been adopted in the preparation of the Bill of Quantities and that are to be used for themeasurement of any part of the Works.


    Training programme on procurement for end recipients

    BoQs Work Items

    The items in the Bill of Quantities should be grouped into sections to distinguish between those parts ofthe Works that by nature, location, access, timing, or any other special characteristics may give rise todifferent methods of construction, phasing of the Works, or considerations of cost.

    General items commonto all parts of the Works may be grouped as a separate section in the Bill of Quantities. When a family ofPrice Adjustment Formulae are used, they should relate to appropriate sections in the Bill of Quantities.


    Boqs work items

    BoQs Work Items

    The Bill of Quantities usually contains the following part Bills, which have been grouped accordingto the nature or timing of the work:

    • Bill No. 1-General Items;

    • Bill No. 2-Earthworks;

    • Bill No. 3-Culverts and Bridges;

    • Bill No. 4-etc., as required;

    • Daywork Schedule; and

    • Summary Bill of Quantities.


    Boqs daywork schedule

    BoQs Daywork schedule

    Daywork Schedule should be included if the probability of unforeseen work (minor Works), outside the items includedin the Bill of Quantities, is relatively high.

    To facilitate checking by the Employer of the realism of ratesquoted by the bidders, the


    Training programme on procurement for end recipients

    Daywork Schedule should normally comprise:

    • list of the various classes of labour, materials, and Contractor’s Equipment for which basic Dayworkrates or prices are to be inserted by the bidder, together with a statement of the conditions under whichthe Contractor will be paid for work executed on a Daywork basis;

    • a percentage to be entered by the bidder against each basic Daywork Subtotal amount for labour, materials,and Plant representing the Contractor’s profit, overheads, supervision, and other charges.


    Boqs summary

    BoQs Summary

    The Summary should contain a tabulation of the separate parts of the Bill of Quantities carried forward,with provisional sums for Daywork, for physical (quantity) contingencies, and for price contingencies(upward price adjustment) where applicable.


    Boqs provisional sums

    BoQs Provisional Sums

    A general provision for physical contingencies (quantity overruns) may be made byincluding a provisional sum in the Summary Bill of Quantities. The inclusion of suchprovisional sums often facilitates budgetary approval by avoiding the need to requestperiodic supplementary approvals as the future need arise.

    Where such provisional sumsor contingency allowances are used, the Particular Conditions of Contract should state themanner in which they will be used, and under whose authority (usually the Engineer’s but here is the CA)


    Training programme on procurement for end recipients

    Technical Specifications


    Training programme on procurement for end recipients

    Technical Specifications

    • General Specifications

    • For each work item

    • (Civil/Structural, Architectural, Electrical, Mechanical)

      • Technical Specifications

      • Item Descriptions

      • Material Lists

  • Standards and Codes


  • Training programme on procurement for end recipients

    Technical Specifications

    • In order to secure fair competition;

      • Local item codes should not be used,

      • A unique coding system should be established,

      • Proper English level should be reached in technical specifications,

      • Creating unfair advantage to certain tenderers should be avoided


    Training programme on procurement for end recipients

    Contract Essentials

    • Priority of Documents

    • the contract,

    • the Tender Form with its appendix,

    • the Particular Conditions,

    • the General Conditions,

    • the Technical Specifications,

    • the design documentation (drawings),

    • the bill of quantities (after arithmetical corrections)/breakdown,

    • any other documents forming part of the contract.

    • Addenda shall have the order of precedence of the document they are modifying.


    Training programme on procurement for end recipients

    Tender Form with Appendix

    • The Tender Form with its appendix (Appendix to Tender)

      • Extremely important and has priority over all documents

      • Try to put all numeric and contract specific info on this table

      • Use it effectively to check the contract and practical conditions

      • More detailed info during the upcoming FIDIC training

    • Volume 2;

      • All guarantees and forms need to be arranged according to the relevant FIDIC clauses


    Training programme on procurement for end recipients

    Do not forget

    This project is co-financed by the European Union and the Republic of Turkey

    • Always try to have a site visit;

      • If not a clarification meeting

  • Allow proper timing for;

    • Tenderers’ questions

    • Preparing and approval of clarifications

  • Questions: up to – 21 days of submission deadline ERA support needed

  • Clarifications: - 11 days of submission deadline

  • Questions & clarifications to be published in relevant media.


  • Training programme on procurement for end recipients

    Questions and answers


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