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Bulgaria – Serbia

IPA Cross-border Programme CCI No 2007CB16IPO006

CENTRE FOR EXCHANGE OF INFORMATION ON CROSS-BORDER ECONOMIC COOPERATION

"The project is co-funded by EU trough the Bulgaria – Serbia IPA Cross-border Programme”.

Procurement of worksProcurement of works

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• Single tender (< or equal to 10,000 Euro)• Competitive Negotiated procedure

(>10,000Euro < 300,000 Euro)• Local open tender (> or equal to 300,000

Euro and < 5,000,000 Euro)• International open tender (> 5,000,000

Euro)

Budget v/s ProcedureBudget v/s Procedure

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Single TenderSingle Tender

• Minimum of one company required

•  Letter of invitation and tender dossier sent

•  Evaluation to follow the procedure for open works tenders

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Competitive Negotiated Competitive Negotiated ProcedureProcedure

• No procurement notice needs to be published

• Minimum of three contractors to be consulted

• Letter of invitation and tender dossier sent

• A minimum of three technically compliant offers must be received

• Evaluation to follow the procedure for open works tenders

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Local Open ProcedureLocal Open Procedure

• Procurement forecast & notice published only in beneficiary country.

• EC publishes reference on the Internet with address from which interested companies can obtain further information

• Tender dossiers either picked up at CA or sent to interested tenderers

• A fee can be charged to cover the cost of the preparation of the tender dossier

• Often the tender dossier, particularly the Technical Specifications, will be prepared by an external expert

• Clarification or site meetings may be foreseen

• Variant solutions may be taken into account if permitted by the Contracting Authority, and are:

• Submitted by tenderer with the least expensive compliant offer, and

• They meet the required technical specifications

• Bids formally evaluated (minimum of 3 voting members required)

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International Open procedureInternational Open procedure

• Procurement forecast & notice to be published on the Internet, in the Official Journal of the European Communities and in the media

• Tender dossiers either picked up at CA or sent to interested tenderers• A fee can be charged to cover the cost of the preparation of the tender dossier• Often the tender dossier, particularly the Technical Specifications, will be prepared by

an external expert• Clarification or site meetings may be foreseen• Variant solutions may be taken into account if permitted by the Contracting

Authority, and are:

o    Submitted by tenderer with the least expensive compliant offer, and

o    They meet the required technical specifications • Bids formally evaluated (minimum of 5 voting members required)• In exceptional and justified cases, and with the approval of the EC, a

restricted tender procedure may be used.

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Negotiated ProcedureNegotiated Procedure

• In certain circumstances, and with EC approval, a negotiated procedure may be used, notably: Where there is an urgency incompatible with the appropriate tendering/contracting timetable

For unforeseen additional works becoming necessary to be carried out by existing contractor

Where such works cannot be separated from main contract

Where such works can be separated but are absolutely necessary

Aggregate cost of contracts awarded for additional works cannot exceed 50% of original contract

Where a tender has been unsuccessful

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Works Tender DossierWorks Tender Dossier

Volume 1Section 1 : instructions to tenderersSection 2 : Tender Form and Appendix to the tenderSection 3 : tender guarantee formSection 4 : questionnaireSection 5 : Administrative Compliance Grid and Evaluation grid

Volume 2Section 1 : contract formSection 2 : general conditions for works contracts FIDIC Section 3 : particular conditionsSection 4 : specimen performance guaranteeSection 5 : specimen prefinancing payment guaranteeSection 6 : specimen retention guaranteeSection 7: tax and customs arrangements

Volume 3Technical specifications

Volume 4Financial Interpretative NoteFinancial offer lump sum contracts / financial offer unit price contracts

Volume 5Design documents, including drawings

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FIDICFIDIC

Federation Internationale des Ingenieurs-Conseils

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What is FIDIC?What is FIDIC?

•Federation of Consulting Engineers Council

•Founded in 1913 (Based in Switzerland)

•Mission is to promote Engineering Expertise and fair procurement

•Extensive bookshop (cash on delivery)

•Represents member organisations in 68 countries

•Web site is http://www.fidic.org

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FIDIC BooksFIDIC Books

Short Form Construction EPC Turnkey Plant and Design Build

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Which Book ?Which Book ?

Is it a straightforward and simple project?

Is there any risk on design or process?

Are the market and the

unprecedented risks high?

Fixed price – turn key Restricted client

contribution High market risks

no

yes

yesDETAILED EXAMINATION

Correct according to Client`s requisitions

and then create a modified contract

yes

no

yes

nono

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FIDIC Red BookFIDIC 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.

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FIDIC Yellow BookFIDIC 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.

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Fundamentals of Works Tender Fundamentals of Works Tender DossiersDossiers

• Conditions of Contract (CC) – part of the Tender Dossier, respectively of the future contract that are addressing specific issues, required for the contract implementation.

• General C – are establishing a set of rules, generally valid in all EU financed contracts

• Special C – are modifying, amending, supplementing the General C, for including in the contract the specificities of a certain country, or of a certain project.

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• Contract (Agreement)• Tender Form with its appendix• Particular Conditions of Contract• General Conditions of Contract• Technical Specifications • The design (drawings etc.)• BoQs after arithmethical corrections• Any other document forming part of the contract

Addenda shall have the order of precedence of teh document

they are modifying

Order of precedence of Contract Order of precedence of Contract

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Particular Conditions of Particular Conditions of ContractContract

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

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• 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 Particular Conditions of ContractContract

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• 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

Particular Conditions of Particular Conditions of ContractContract

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• 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 Main aspects to be addressed in PCPC

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• 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

Main aspects to be addressed in Main aspects to be addressed in PCPC

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Bill of Quantities-BoQsBill of Quantities-BoQs

The objectives of BoQs are;•to provide sufficient information on the quantities of Works to be performed to enable Bids to be prepared efficiently and accurately •when a Contract has been entered into, to provide a priced (BOQ)

for use in the periodic evaluation of Works executed.

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

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

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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.

Bill of Quantities-BoQsBill of Quantities-BoQs

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

BoQs PreambleBoQs Preamble

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

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

BoQs Work ItemsBoQs Work Items

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The Bill of Quantities usually contains the following part Bills, which have been grouped according to 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 Work ItemsBoQs Work Items

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Daywork Schedule should be included if the probability of unforeseen work, outside the items included in the Bill of Quantities, is relatively high. To facilitate checking by the Employer of the realism of rates quoted by the bidders, the Daywork Schedule should normally comprise:•list of the various classes of labor, materials, and Contractor’s Equipment for which basic Daywork rates or prices are to be inserted by the bidder, together with a statement of the conditions under which the 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 labor, materials, and Plant representing the Contractor’s profit, overheads, supervision, and other charges.

BoQs Daywork scheduleBoQs Daywork schedule

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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 SummaryBoQs Summary

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

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

BoQs Provisional SumsBoQs Provisional Sums

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Sample BoQ Bill 1Sample BoQ Bill 1

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Evaluation of Works Evaluation of Works

Evaluations are held in phases:• Receipt and registration of tenders• Prepatory meeting• Tender Opening Session (Public Open)• Administrative Compliance• Technical Evaluation• Financial Evaluation• Conclusion

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Evaluation CommitteeEvaluation Committee

• 5 members for contract < 5,000,000 Euro 2 non-voting + 3 voting

• 7 members for contract > 5,000,000 Euro 2 non-voting + 5 voting

• Reasonable command of English + technical & administrative capacity

• Impartiality and confidentiality (conflict of interest)

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Admin CheckAdmin Check

– To check tenders are complete and tender guarantee is submitted– EU representatives should be informed (ex-ante)– Opening checklist should be filled– Chairperson has to check the conflict of interest of the Evaluation

Committee – Tender opening checklist & report has to be completed

Administrative Compliance Grid:• Documentation complete as required• Nationality of the Tenderer• Language Correct

•Committee may request clarifications within reasonable time

•Only compliant tenders go on to next phase

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Technical EvaluationTechnical Evaluation

• Done Lot by Lot (if applicable)

Be careful about criteria for tenderers tendering for multiple Lots

• Use the Evaluation Grid in the tender dossier

• Rules of origin

• Eligibility of sub-contractors

• Required Capacity (economic, financial, professional and technical)

• Only technically compliant offers go on to the next phase

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Financial EvaluationFinancial Evaluation

• Check arithmetical errors• Calculate discounts for multiple Lots• Contract is awarded to the lowest compliant offer;

within the available budget• Evaluation of variant solution – only those submitted

by the lowest compliant offer• Problem of abnormally low offers

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ConclutionConclution

• Evaluation Committee recommends to:

• Award the contract to the tenderer which complies with administrative and technical

requirements is the lowest offer within the maximum budget

available

• Cancel the procedure

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Questions?Questions?