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I /Sample Bidding Documents

Frocurennentof~orks

Inter-American Development Bank

The World Bank

September 1985

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wb350881Typewritten Text56733

First printing September 1985

Manufactured in the United States of America

ISBN 0-8213-0651-0

TABLE OF CONTENTS

Page Number

Sectional Sequential

PREFACE v

INVITATION TO BID 0.1 1

Section 1 INSTRUCTIONS TO BIDDERS 1.1 -1.2 3

A. General 1.3 -1.5 5

B. Bidding Documents 1.5 -1.6 7

C. Preparation of Bids 1.7 -1.13 9

D. Submission of Bids 1.13-1.14 15

E. Bid Opening and Evaluation 1.14-1.19 16

F. Award of Contract 1.19-1.20 21

Section 2 GENERAL CONDITIONS OF CONTRACT 2.1 -2.2 23

FIDIC CONDITIONS OF CONTRACT Insert 25

Section 3 SPECIAL CONDITIONS OF CONTRACT 3.1 57

Amended Clauses 3.2 -3.19 58

Additional Clauses 3.20-3.22 76

Section 4 TECHNICAL SPECIFICATIONS 4.1 -4.2 79

Section 5 FORM OF BID AND BID SECURITY 5.1 -5.7 81

Section 6 BILL OF QUANTITIES 6.1 -{j.3 89

A. Preamble 6.4 -{j.5 92

B. Work Items 6.6 -{j.9 94

C. Daywork Schedule 6. 10-{i.17 98

Summary Bill of Quantities 6.18 106

Section 7 SCHEDULES OF SUPPLEMENTARY INFORMATION 7.1 107

I. Foreign Currency Requirements 7.2 108

I. Annex: Breakdown 7.3 109

II. Estimated Contract Payments 7.4 110

III. (Alternative) Basic Prices for Contract Price Adjustment 7.S III

III. (Alternative) Indices for Contract Price Adjustment Formula 7.6 -7.7 112

IV. Major Items of Constructional Plant 7.8 114

V. Key Personnel 7.9 llS

VI. Sub-Contractors 7.10 116

Section 8 FORM OF AGREEMENT 8.1 -8.3 117

Section 9 ACCEPTABLE FORMS OF PERFORMANCE SECURITY 9.1 121

A. (Alternative) Bank Guarantee: (Conditional) 9.2 -9.3 122

B. (Alternative) Bank Guarantee: (Unconditional) 9.4 -9.5 124

C. Performance Bond 9.6 -9.7 126

D. Advance Mobilization Loan Bank Guarantee 9.8 128

Section 10 DRAWINGS (not included)

INDEX 129

PW 1()-85 iii

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PREFACE

These sample bidding documents have been prepared jointly by the Inter-American Development Bank (IDB) and The World Bank* (IBRD) in close consultation with the Asian Development Bank (ADB) for use by borrowers in the procurement of civil engineering works through international competitive bidding. The sample bidding documents are intended to serve as a model for the admeasurement (bill of quantities) type of contract, which is most common in works contracting. Their use is not mandatory, but the procedures and practices presented herein have been developed through broad international experience, and are recommended for appropriate use in projects that are financed in whole or in part by the IDB and IBRD, referred to hereafter as the International Financial Institutions (IFIs).

Borrowers and their procurement agencies (referred to hereafter as Employers) using the documents should complete the specific details in the places indicated after deleting any inappropriate alternative provisions. The following directions should be observed when using the documents:

(a) specific details, such as the name of the Employer, address for bid submission, etc., should be furnished in the spaces provided; the information to be given is indicated in italized parentheses;

(b) the numbered footnotes are not part of the text, but they contain guidance and insquctions for the Employer in preparing his own documents; the final documents should not contain any of the numbered footnotes;

(c) the Special (or Part II) Conditions of Contract included in the sample documents are only illustrative of the provisions that may be drafted specifically by an Employer to adapt the General Conditions of Contract to the particular circumstances of a borrowing country or to a particular contract;

(d) where the term "Sample" or "Sample Clause" is used as a prefix, the related subject matter should be addressed by the Employer and included in particular bidding documents in a manner similar to that illustrated by the sample, but the wording may be modified to suit individual circumstances; and

(e) prequalification is advisable for all large or complex works contracts; in the a1lsence of prequalification, and to update any earlier prequalification, a determination of the lowest evaluated bidder's then current capability to undertake the works should be carried out after bid opening (postqualification), based upon information requested in the bidding documents.

The FIDIC "Conditions of Contract (International) for Works of Civil Engineering Construction" (see Section 2), which are included herein to illustrate a typical form of General Conditions of Contract, use the terms "tender," "tenderer," etc., whereas these sample bidding documents use the terms "bid," "bidder," etc. For the purpose of these documents and for procurement generally, the terms "bid/tender," bidder/tenderer," "bidding/tendering," and other similar expressions are synonymous.

Employers should state whether and to what extent these sample documents were used in the preparation of bidding documents which are submitted to the IFIs for review. Suggestions by users of the documents regarding their content and applicability should be sent to the IF! concerned, with a copy to IBRD, Procurement Unit (PPDPC), for coordination purposes.

* Inclusive of its affiliate, the International Development Association (IDA).

PW lCHl5 v

0.1

INVITATION TO BIDt

Date: (Of issuance of invitation) Loan No.:2 (If known at time of invitation) Bid No.:

1. The (Name of Borrower) has received3 a loan from the (Name of appropriate International Financial Institution) in various currencies towards the cost of (Name of Project) and it is intended that part of the proceeds of this loan will be applied to eligible payments under the contract for (Name of Contract). Bidding is open to all bidders from eligible source countries as defined under the "Guidelines for Procurement" of the (Name of appropriate IFI).

2. The (Name of Employer) now invites sealed bids from eligible bidders for furnishing the necessary labor, materials, equipment and services for the construction and completion of (Brief Description of Works to be Undertaken, Including Principal Quantities).

3. Interested eligible bidders may obtain further information from, and inspect the bidding documents at, the office of: (Designation of Officer-in-Charge, Name and Address of Appropriate Office for Enquiry and Issuance of Bidding Documents}.4

4. A complete set of bidding documents may be purchased by any interested eligible bidder on the submission of a written application to the above and upon payment of a non-refundable fee of (Amount}.5 Additional sets of documents may be purchased each at the same price.

5. All bids must be accompanied by a bid security, in an acceptable form, of (Amount in Currency of Employer's Country)6 or an equivalent amount in a freely convertible currency, and must be delivered to (Designation of Officer-in-Charge, Name and Address of Appropriate Office for Bid Submission) on or before (Time and Date).

6. Bids will be opened in the presence of those bidders' representatives who choose to attend at (Time and Date)' at the offices of (Appropriate Designation and Location).

1. The "Invitation to Bid" is normally issued as an advertisement or as a separate letter addressed to individual bidders: its purpose is to supply such information as is necessary to enable potential bidders to decide whether they could or should participate in the bidding. It should therefore provide: eligibility criteria; the scope of the Works including principal quantities; construction period; sources of further information; cost of bidding documents; amount of bid security; date of bid submission; and any important or unusual bid evaluation criteria (e.g., margins of preference, etc.). The "Invitation to Bid" may be incorporated in the bidding documents merely for the record, or it may be omitted.

2. In any reference to "loan," the Employer should substitute "credit" as appropriate. 3. The Employer should substitute "has applied for" if appropriate. 4. The office for enquiry and issuance of bidding documents and that for bid submission mayor may not be the same, and

mayor may not include the Engineer's office. The address is usually a postal address, but it should be supplemented with a street address, as well as a telex number and telephone number.

5. The fee chargeable should only be nominal to defray reproduction and mailing costs and to ensure that only bona fide bidders will request bidding documents. An amount of between U5$50 to U5$500 equivalent is deemed appropriate, depending upon the volume of documentation.

6. It is preferable to specify a fixed sum as bid security in order to avoid possible information leakages from the issuing commercial bank which could disclose indirectly a competitor's bid amount when a percentage of bid price is used. If a percentage of the bid price is used, it is preferable to use wording such as "not less than ( __) percent." The amount should normally be about 2 percent of the Engineer's estimate, but could range between 1 percent for large contracts of around U5$100 million and 4 percent for small contracts of U5$2 million. If a fixed sum is used, it should be based on these percentages.

7. The timing and date of bid opening should normally be the same as, or follow very shortly after, the deadline for bid submission. The IFIs discourage delays of more than a few hours in the opening of bids after their submission.

IPW lQ-85

l.l

Clause Number

1. 2. 3. 4. 5.

6. 7. 8.

9. 10. II. 12. 13. 14. 15. 16. 17.

18. 19. 20. 21.

22. 23. 24. 25. 26. 27. 28. 29.

Section 1. INSTRUCTIONS TO BIDDERS8

Table of Clauses9

A.GENERAL Description of Works Source of Funds Eligibility and Qualification Requirements Cost of Bidding Site Visit

B. BIDDING DOCUMENTS Content of Bidding Documents Clarification of Bidding Documents Amendment of Bidding Documents

C. PREPARATION OF BIDS Language of Bid Documents Comprising the Bid Bid Prices Currencies of Bid and Payment Bid Validity Bid Security Variations in Bidding Conditions Pre-Bid Meeting Format and Signing of Bids

D. SUBMISSION OF BIDS Sealing and Marking of Bids Deadline for Submission of Bids Late Bids Modification and Withdrawal of Bids

E. BID OPENING AND EVALUATION Bid Opening Process to Be Confidential Clarification of Bids Determination of Responsiveness Correction of Errors Conversion to Single Currency Evaluation and Comparison of Bids Preference for Domestic Bidders

Page Number Sectional Sequential

1.3 5

1.3 5

1.3 5

1.3 5

1.5 7

1.5 7

1.5 7

1.5 7

1.6 8

1.6 8

1.7 9

1.7 9

1.7 9

1.7 9

1.8 10

1.10 12

1.10 12

1.11 13

1.12 14

1.13 15

1.13 IS 1.13 IS 1.14 16

1.14 16

1.14 16

1.14 16

1.14 16

l.15 17

1.15 17

1.15 17

l.15 17

1.16 18

1.17 19

1.18 20

8. This Section of the bidding documents is intended to acquaint potential bidders with the nature of the bid, and should provide all the necessary information to enable bidders to prepare their bids in accordance with the requirements of the Employer. Information on bid preparation, submission, opening and evaluation up to the point of award of Contract should be given.

9. Subject matters governing the performance of the Contractor under the Contract, or payments under the Contract, or affecting the risks and liabilities of the bidder either as a bidder or prospective Contractor, should not normally be included in this Section but in thc Sections on General or Special Conditions of Contract. If duplication in part is inevitable in the different Sections, care must be exercised by the person drafting the documents to avoid contradictions or conflicts between Clauses dealing with the same topic.

PW 10--85 3

1.2

Table ofClauses (continued)

Clause Page Number Number

30. 31.

32. 33. 34.

F. AWARD OF CONTRACT Award Criteria Employer's Right to Accept Any Bid

and to Reject Any or All Bids Notification of Award Signing of Contract Agreement Performance Security

Sectional

1.19 1.19

1.19 1.19 1.19 1.20

Sequential

21

21

21

21

21

22

4

1.3

Section 1. INSTRUCTIONS TO BIDDERS

A. General

1. Description ofWorks

(Insert Description of Works)1°

and are hereinafter referred to as "(Name of Contract Works)"IO or "Works."

2. Source of Funds

2.1 The (Name of Borrower) has receivedll a loan from (Name of Funds of)12 the (Name of Appropriate IFI) , hereinafter referred to as the IFI, in various currencies equivalent to US$ towards the cost of (Name of Project) and intends to apply a portion of the proceeds of this loan to eligible payments under the contract for which this Invitation to Bid is issued. Payment by the IFI will be made only at the request of (Name of Borrower) and upon approval by the IFI and will be subject in all respects to the terms and conditions of the Loan Agreement. No party other than (Name of Borrower) shall derive any rights from the Loan Agreement or have any claim to the loan proceeds.

3. Eligibility and Qualification Requirements

3.1 This invitation to bid is open to all bidders from eligible source countries as defined under the "Guidelines for Procurement" of the IFI.13

3.2 All goods and services to be supplied under this Contract shall have their origin in eligible source countries, defined under the "Guidelines for Procurement" of the IFI, and all expenditures made under the Contract will be limited to such goods and services.

3.3 For purposes of this clause, "origin" means the place where the goods are mined, grown or produced or from which the services are supplied. Goods are produced when, through manufacturing, processing or substantial and major assembling of components, a commercially recognized product results that is substantially different in basic characteristics or in purpose or utility from its components.

3.4 The origin of goods and services is distinct from the nationality of the bidder.

10. This description is particular to each works contract and must he specially written. It should include, inter alia, a general description of the project and the work to be performed under the contract; approximate quantities of work to be carried out and any special requirements or features; construction schedule; the site location and information as to its accessibility; any limitation on transportation of heavy equipment; information on local conditions including geophysical and climatic conditions; any required interfacing with other ongoing contracts; and other relevant information. The contract works should also be given a name for reference purposes, e.g., "Bahia Port: Berths 5 and 6."

11. The Employer should substitute "has applied for" if appropriate. 12. The Employer should omit the reference, or insert "Name of Funds" if from a special source, e.g.: for IDA, "The

Special Facility for Sub·Saharan Africa"; omit for IDB projects. 13. As a general rule all IFIs require that goods and services be produced from their respective member countries and also

that the contractor be a national of a member country. For the purposes of the IBRD Guidelines for Procurement, suppliers and contractors in Switzerland and Taiwan, China,

are eligible to compete. In the case of lOB, attention is called to the nationality criteria for construction contractors in the IDB Guidelines for

Procurement.

PW 1lHl5 5

1.4

3.5 To be eligible for award of contract, bidders shall provide evidence satisfactory to the Employer of their eligibility under subclause 3.1 above, and of their capability and adequacy of resources to carry out the Contract effectively. To this end, all bids submitted shall include the following information:

(a) copies of original documents defining the constitution or legal status, place of registration and principal place of business of the company or firm or partnership or, if a joint venture, of each party thereto constituting the bidder;

(b) details of the experience and past performance of the bidder (or of each party to a joint venture) on works of a similar nature within the past five years, and details of current work in hand and other contractual commitments;14

(c) major items of constructional plant proposed for use in carrying out the Contract in the format prescribed in Schedule IV;

(d) the qualifications and experience of key personnel proposed for administration and execution of the Contract, both on and off site, in the format prescribed in Schedule V;

(e) proposals for subcontracting elements of the Works amounting to more than 10% of the Bid Price for each element and as listed in Schedule VI;

(f) reports on the financial standing of the bidder (or of each party to a joint venture) such as profit and loss statements, balance sheets and auditor's reports for the past five years, an estimated financial projection for the next two years, and an authority from the bidder (or authorized representative of a joint venture) to seek references from the bidder's bankers; and

(g) information regarding any current litigation in which the bidder is involved.

3.615 For the purposes of this particular Contract, bidders shall meet the following qualifying criteria as a minimum:

(a) ( _________________________); (b) ( ); etc. ( ).

3.7 Bids submitted by a joint venture of two or more firms as partners shall comply with the following requirements:

(a) the bid, and in case of a successful bid the Form of Agreement, shall be signed so as to be legally binding on all partners;

(b) one of the partners shall be nominated as being in charge; and this authorization shall be evidenced by submitting a power of attorney signed by legally authorized signatories of all the partners;

(c) the partner in charge shall be authorized to incur liabilities and receive instructions for and on behalf of any and all partners of the joint venture and the entire execution of the Contract including payment shall be done exclusively with the partner in charge;

(d) all partners of the joint venture shall be liable jointly and severally for the execution of the Contract in accordance with the Contract terms, and a relevant statement to this effect shall be included in the authorization mentioned under (b) above as well as in the Form of Bid and the Form of Agreement (in case of a successful bid); and

(e) a copy of the agreement entered into by the joint venture partners shall be submitted with the bid.

14. A standard form may be devised by the Employer for this purpose and included in Section 7.

15. According to the size and nature of the Works, Employers should predetermine minimum thresholds of acceptability for essential factors in the postqualification evaluation, such as: nature/value of previous Works executed; excavation/ concreting/asp halting capability, etc.

Where prequalification of potential bidders has already been carried out, this subclause may be omitted and subclause 3.5 should be reworded to require an updating of information already submitted, with special reference to current Works in hand.

6

1.5

(IBRD) 16

3.8 Domestic bidders or joint ventures of domestic and foreign bidders applying for eligibility for the application of a 7-1/2 percent margin of preference in the comparison of their bids with other bids shall supply all information required to satisfy the criteria for eligibility as described in Clause 29 of these Instructions to Bidders.

4. C(,'3t of Bidding

4.1 The bidder shall bear all costs associated with the preparation and submission of his bid and the (Name of Employer), hereinafter referred to as "the Employer," will in no case be responsible or liable for these costs, regardless of the conduct or outcome of the bidding process.

5. Site Visit

5.1 The bidder is advised to visit and examine the Site of Works and its surroundings and obtain for himself on his own responsibility all information that may be necessary for preparing the bid and entering into a Contract. The costs of visiting the Site shall be at bidder's own expense.

5.2 The bidder and any of his personnel or agents will be granted permission by the Employer to enter upon his premises and lands for the purpose of such inspection, but only upon the express condition that the bidder, his personnel or agents, will release and indemnify the Employer and his personnel and agents from and against all liability in respect thereof and will be responsible for personal injury (whether fatal or otherwise), loss of or damage to property and any other loss, damage, costs and expenses however caused, which, but for the exercise of such permission would not have arisen.

B. Bidding Documents

6. Content ofBidding Documents

6.1 The set of bidding documents issued for the purpose of bidding includes the number of copies stated below of the following Volumes,I7 together with any Addenda thereto issued in accordance with Clause 8 and any minutes of pre-bid meetings issued in accordance with Clause 16:

16. To be inserted only in IBRD documents, at the option of a qualifying borrowing country, in the absence of a previous prequalification to determine the eligibility of potential bidders for preference; otherwise omit. The IBRD policy of Works preference is as follows:

(a) borrowing countries with a G~P per capita below US$400 in 1983 prices (adjusted annually to reflect changing price levels) may request the inclusion in IBRD loan documents of a general provision allowing eligible domestic contractors a 7.1/2 percent margin of preference when comparing bids with foreign and other contractors not eligible for the preference on Bank·financed works contracts procured through international competitive bidding. If such a provision is included in the loan agreement, the borrowing country may, at its option, incorporate the preference in particular bidding documents;

(b) the criteria established for determining the eligibility of contractors for domestic preference must be acceptable to IBRD, and must include majority national ownership as a minimum criterion (see Clause 29 for further details); and

(c) prequalification may be useful where the prefcrence is to be applied in a particular contract, in order to establish the eligibility for preference of bidders prior to thc submission of bids.

17. Modify the content of the Volumes as appropriate. Although there is no requirement that bidding documents must be in four Volumes, it is convenient to have them so arranged, particularly in having the Form of Bid, Bill of Quantities and Schedules collated in one Volume, thereby helping to ensure completeness in submission and to facilitate checking. For ease of reference, the page numbers of different Volumes or Sections are often prefixed with an idcntifying letter or number. In this sample document, the page numbers of the different Sections have been prefixed with the corresponding number of the Section.

PW 10--85 7

1.6

Number of

Copies Volume Section

1 1 o - Invitation to Bid l

1 - Instruction to Bidders

2 - General Conditions of Contract

3 - Special Conditions of Contract

1 2 4 - Technical Specifications 3 5 - Form of Bid and Bid Security

6 - Bill of Quantities 7 - Schedules of Supplementary Information 8 - Form of Agreement 9 - Forms of Performance Security and Bank Guarantee

for Advance Mobilization Loan

1 4 10 - Drawings

6.2 The bidder is expected to examine carefully all instructions, conditions, forms, terms, specifications and drawings in the bidding documents. Failure to comply with the requirements of bid submission will be at the bidder's own risk. Pursuant to Clause 25, bids which are not substantially responsive to the requirements of the bidding documents will be rejected.

7. Clarification of Bidding Documents

7.1 A prospective bidder requiring any clarification of the bidding documents may notify the Employer in writing or by cable (which is deemed to include telex or facsimile transmission) at the Employer's address19 indicated in the invitation to bid. The Employer will respond in writing or by cable to any request for clarification which he receives earlier than po days prior to the deadline for the submission of bids. Written copies of the Employer's response (including a description of the inquiry but without identifying its source) will be sent to all prospective bidders who have purchased the bidding documents.

8. Amendment of Bidding Documents

8.1 At any time prior to the deadline for submission of bids, the Employer may, for any reason, whether at his own initiative or in response to a clarification requested by a prospective bidder, modify the bidding documents by the issuance of an Addendum.

8.2 The Addendum will be sent in writing or by cable to all prospective bidders who have purchased the bidding documents and will be binding upon them. Prospective bidders shall promptly acknowledge receipt thereof by cable to the Employer.

8.3 In order to afford prospective bidders reasonable time in which to take an Addendum into account in preparing their bids, the Employer may, at his discretion, extend the deadline for the submission of bids in accordance with Clause 19.

18. For the convenience of bidders and for subsequent checking by the Employer, from two to four copies of Volume 3 are suggested for inclusion in a "set" of bidding documents (see subclause 17.1).

19. Bidders may he asked to send a copy of the inquiry to the Employer's consultants if this is deemed expedient and desirable; in which case, this requirement should be specified and the consultant's address provided.

20. Employer should insert appropriate period. A minimum period of 30 days is normal. For large or complex Works contracts with bidding periods of 120 to 180 days, a minimum period of 45 to 60 days may he needed to enable bidders to assess better the implications of clarifications and amendments. Occasionally it may be necessary to extend the deadline for the submission of bids (see subclause 8.3).

8

1.7

C. Preparation of Bids

9. Language ofBid 9.1 The bid prepared by the bidder and all correspondence and documents relating to the bid exchanged by the bidder and the Employer shall be written in the (Name) 21 language. Supporting documents and printed literature furnished by the bidder with the bid may be in another language provided they are accompanied by an appropriate translation of pertinent passages in the above stated language. For the purpose of interpretation of the bid, the (Name) 21 language shall prevaiL

10. Documents Comprising the Bid

10.1 The bid to be prepared by the bidder shall comprise the following: the Form of Bid and Appendix thereto; the Bid Security; the Bill of Quantities; the Schedules of Supplementary Information; the information on eligibility and qualifications; alternative offers where invited, and any other materials required to be completed and submitted in accordance with the Instructions to Bidders embodied in these bidding documents. The forms, Bill of Quantities and Schedules provided in Volume 322 of these bidding documents shall be used without exception (subject to extensions of the Schedules in the same format and to the provisions of subclause 14.2 regarding the alternative forms of bid security).

11. Bid Prices

ILl Unless stated otherwise in the bidding documents, the Contract shall be for the whole Works as described in Section 1, Clause 1, based on the schedule of unit rates and prices submitted by the bidder.23

1L2 The bidder shall fill in rates and prices for all items of Works described in the Bill of Quantities, whether quantities are stated or not. Items against which no rate or price is entered by the bidder will not be paid for by the Employer when executed and shall be deemed covered by the other rates and prices in the Bill of Quantities.

1L3 All duties, taxes and other levies payable by the Contractor under the Contract, or for any other cause, as of the date 30 days prior to the closing date for submission of bids, shall be included in the rates and prices and total Bid Price submitted by the bidder, and the evaluation and comparison of bids by the Employer shall be made accordingly.

21. The language named in this Clause must be the same as that used in the preparation of the bidding documents by the Employer. The working languages of IDB are Spanish, English, Portuguese and French; bidding documents for IDB projects must be prepared in the language of the borrowing country. IBRD requires the use of one of the languages customarily used in international commercial transactions, namely English, French or Spanish.

22. Modify as appropriate where the forms and schedules are not all collated in one volume (Volume 3) as they are in the example given in subclause 6.1.

23. These sample bidding documents do not apply to lump sum or cost reimbursable types of contract. By modifying certain Clauses in the "Instructions," "Special Conditions" and "Bill of Quantities," they could readily be adapted for lump sum contracts.

PW 1(H15 9

http:bidder.23

1.8

Alternative24

11.4 Fixed Price25 The rates and prices quoted by the bidder shall be fixed for the duration of the Contract and shall not be subjected to adjustment on any account except as otherwise provided in the Conditions of Contract.

Alternative24

11.4 Price Adjustment The rates and prices quoted by the bidder are subject to adjustment during the performance of the Contract in accordance with the provisions of Clause 70 of the Conditions of Contract. The bidder shall complete Schedule III and shall submit with his bid such other supporting information as required under subclause 70(1) of the Special Conditions of Contract.

12. Currencies of Bid and Payment 26

Alternative (A)26

12.1 The unit rates and prices shall be quoted by the bidder entirely in (Name of Currency of Employer's Country). A bidder expecting to incur expenditures in other currencies for inputs to the Works supplied from outside the Employer's country (referred to as "the foreign currency requirements") shall indicate in Schedule I "Estimate of Foreign Currency Requirements" the percentage of the Bid Price (excluding Provisional Sums) needed by him for the payment of such foreign currency requirements, either (i) entirely in the currency of the bidder's home country or, at the bidder's option, (ii) entirely in (Name ofan International Trading Currency),27 always provided that a bidder expecting to incur expenditures in a currency or currencies other than those stated in (i) and (ii) above for a portion of the foreign currency requirements, and wishing to be paid accordingly, shall so indicate the percentage portion in his bid. The amounts in various currencies, calculated on the basis of the percentages indicated in the bid and by use of the exchange rates indicated in subclause 12.2 hereinafter, shall be used for the purposes of conversion and comparison of bids pursuant to Clause 27.

24. The Employer should delete the inapplicahle alternative.

25. Fixed price contracts are sometimes used for works of short duration, say less than 12 months. A truly "fixed price" contract is seldom found in works contracting, as adjustments would still normally be made under subclause 70(2) of the General Conditions, Part I, for changes in cost items such as import duties, basic domestic wage rates, domestically controlled price of materials, etc., caused by the introduction of new official regulations in the country of the Employer which were not foreseeable by the bidder. If there were no recourse under subclause 70(2), bidders would likely inflate their prices for such eventualities (which might not occur), OT file claims against the Employer for any resulting additional costs.

26. Two alternative methods of pricing bids are acceptable for works contracts: (A) bidders shall quote entirely in the currency of the Employer's country but may specify the percentages and the

types of foreign currencies expected to be required either in the bidder's home currency or in an Employer. specified international trading currency, or in the currency of origin of the inputs;

(B) bidders shall quote separately in the currencies of the expected local and foreign sources of the labor, materials, equipment, services, etc., with the expected foreign currency requirements being expressed in the currencies indicated in (A) above.

Alternative (A) is normally used for works contracts, and is the assumed method in subclause 12.3 and Sections 6 and 7 of this document. Alternative (B) requires a double or multiple column entry in pricing the Bill of Quantities, one for local and one or more for foreign currency(ies). The inapplicable subclause 12.1 should be deleted and, if Alternative (B) is used, subclause 12.3 should be modified to exclude Schedule I, while retaining the Annex thereto.

To avoid discriminatory treatment between domestic and foreign contractors, domestic contractors should have reasonable access to foreign currency to meet their justifiable requirements. The IFIs strongly recommend that domestic bidders indicate their expected foreign currency requirements whcn bidding and, to the extent permitted under the currency regulations in the Employer's country, be paid accordingly if awarded the Contract or be paid an equivalent amount at the time of payment in local currency.

27. The Employer should select and specify the name of a currency widely used in international trade, customarily, but not necessarily, US dollars.

10

1.9

Alternative (B) 26

12.1 The unit rates and prices shall be quoted by the bidder separately in the following currencies: (a) for those inputs to the Works which the bidder expects to supply from within the Employer's

country, in (Name of Currency of Employer's Country); (b) for those inputs to the Works which the bidder expects to supply from outside the

Employer's country (referred to as "the foreign currency requirements") either (i) entirely in the currency of the bidder's home country or, at the bidder's option, (ii) entirely in (Name of an International Trading Currency),27 always provided that a bidder expecting to incur expenditures in a currency or currencies other than those stated in (i) and (ii) above for a portion of the foreign currency requirements, and wishing to be paid accordingly, shall so indicate the portion in his bid.

12.2 The rates of exchange to be used by the bidder for currency conversion shall be the selling rates for similar transactions published by (Name of Central Bank in Employer's Country), or other similar authoritative source, prevailing on the date 30 days prior to the latest date for the submission of bids.28 If exchange rates are not so published for certain currencies, the bidder shall state the rates used and the source. For the purpose of payments, the exchange rates used in bid preparation shall apply for the duration of the Contract so that no currency exchange risk is borne by the bidder.

12.3 Bidders shall indicate their expected foreign currency requirements in Schedule I "Estimate of Foreign Currency Requirements," and shall provide details thereof in the Annex to Schedule I, including but not limited to the specific requirements for:

(a) expatriate staff and labor employed directly on the Works; (b) social, insurance, medical and other charges relating to such expatriate staff and labor, and

foreign travel expenses; (c) imported materials, both temporary and permanent, required for the Works; (d) depreciation and usage of imported plant and equipment, including spare parts, required for

the Works; (e) foreign insurance and freight charges for imported materials, plant and equipment, including

spare parts; and (f) overhead expenses, fees and financial charges arising outside (Name of Employer's Country)

in connection with the Works.

12.4 Bidders may be required by the Employer to clarify their foreign currency requirements, and to justify that the amounts included in the unit rates and in Schedule I are reasonable and responsive to subclause 12.1.29 During the progress of the Works, the foreign currency portions of the balance of the Contract Price may be adjusted by agreement between the Employer and the Contractor in order to reflect any changes in foreign currency requirements for the Contract in accordance with Clause 72 of the Special Conditions of Contract.

28. The Employer may specify the source of the exchange rates to be used for bidding purposes, or may permit bidders to indicate the exchange rates used.

29. The requirements of foreign currency by different bidders should not be a factor to be taken into account in hid evaluation.

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or

13. Bid Validity

13.1 Bids shall remain valid and open for acceptance for a period of ( )30 days after the date of bid opening prescribed in Clause 22.

13.2 In exceptional circumstances, prior to expiry of the original bid validity period, the Employer may request the bidder for a specified extension in the period of validity. The request and the responses thereto shall be made in writing or by cable. A bidder may refuse the request without forfeiting his bid security. A bidder agreeing to the request will not be required nor permitted to modify his bid, but will be required to extend the validity of his bid security correspondingly. The provisions of Clause 14 regarding discharge and forfeiture of bid security shall continue to apply during the extended period of bid validity.

14. Bid Security

14.1 The bidder shall furnish, as part of his bid, a bid security in the amount of an equivalent amount in a freely convertible currency.

14.2 The bid security shall, at the bidder's option, be in the form of a cash deposit, a certified check, a bank draft, an irrevocable letter of credit or a guarantee from a bank located in the country of the Employer or a foreign bank which has been determined by the bidder to be acceptable to the Employer, or a bond issued by an insurance company or bonding company likewise located in the country of the Employer or otherwise acceptable to the Employer. The format of the bank guarantee or the bond shall be in accordance with one of the sample forms of bid security included in these bidding documents; other formats may be permitted, subject to the prior approval of the Employer. Letters of credit, bank guarantees and bid bonds shall be valid for ( __)32 days beyond the validity of the bid.

14.3 Any bid not accompanied by an acceptable bid security will be rejected by the Employer as non-responsive.

14.4 The bid securities of unsuccessful bidders will be discharged/returned as promptly as possible, but not later than (__)33 days after the expiration of the period of bid validity prescribed by the Employer.

14.5 The bid security of the successful bidder will be discharged when the bidder has signed the Agreement and furnished the required performance security.

14.6 The bid security may be forfeited: (a) if a bidder withdraws his bid during the period of bid validity; or (b) in the case of a successful bidder, if he fails within the specified time limit to:

(i) sign the Agreement, or (ii) furnish the required performance security.

30. Insert the number of days deemed appropriate. The period should be realistic, and sufficient to provide for bid evaluation, for obtaining the necessary clearances and approvals (including the requirements of the IFI concerned), and for notification of the award of Contract. Normally a period of 90 days to 180 days, depending on the complexity of the Contract, should be adequate.

31. Insert an appropriate amount in the currency of the Employer's country (see footnote 6). 32. The validity period of the bid security should equal the bid validity period plus the period allowed for the successful

bidder to furnish the performance security and sign the Contract. Normally a period of 30 days beyond the end of the bid validity period should suffice. For IBRD documents, insert 30 days.

33. This period should equal the period allowed for the successful bidder to furnish the performance bond and sign the contract, and should conform with subclause 14.2, footnote 32.

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15. Variations in Bidding Conditions

Alternative (A)34

15.1 Variations are permitted in bidding conditions of a financial/administrative nature as listed below.3'> A bidder may select his preference within the range of conditions indicated, and shall state the basis of his offer in the Appendix to the Form of Bid.

(a) Advance Loan for Mobilization (ref. Special Conditions subclause 60.7) Offers may be based on a percentage to be stated by the bidder between ( __) and (__)36 of the Bid Price less Provisional Sums, as an advance loan for mobilization. Evaluation shall be made on the associated costs to the Employer of different loan requests in accordance with subclause 28.3.

(b) Time for Completion (ref. General Conditions, Clause 43) Offers may be based on a time for completion to be stated by the bidder between ( __) and {__)37 months. Evaluation shall be made on the benefits accruing to the Employer from different time periods in accordance with subclause 28.4. The time period accepted shall become the contractual Time for Completion for the purposes of Clause 47, "Liquidated Damages."

15.2 Bidders wishing to qualify their bids or otherwise to deviate from the requirements of the bidding documents on items of a financial/administrative nature other than provided for in paragraphs (a) and (b) of subclause 15.1 above shall present such qualifications or deviations in the form of alternative offers to the basic bidding requirements. The attention of bidders is drawn to the provisions of Clause 25 regarding the rejection of bids which are not substantially responsive to the requirements of the bidding documents. Each alternative offer shall be accompanied by a detailed description and price breakdown indicating the bidder's estimate of the cost implications to the Employer in accordance with Clause 28 if the alternative offer were to be accepted by the Employer and incorporated in the Contract. Bids containing qualifications and deviations which are not so detailed and priced as alternative offers may be rejected. After evaluation in accordance with Clause 28 the Employer reserves the right to accept or reject any alternative offer submitted pursuant to this subclause.

34. The Employer should select either Alternative (A) or (B). The intent of Alternative (A) is to take a positive but finn approach to the tendency of bidders to deviate from the bidding conditions or to make their bids conditional, or to submit alternative proposals. Offers are solicited by the Employer on the basis of variations in specific bidding conditions and/or alternatives of a technical nature. These, together with other acceptable priced alternatives, are considered further in the process of bid evaluation.

35. The items listed under paragraphs (a) and (b) are particularly suited to variation and competition, and are often the subject of unsolicited alternative offers by bidders according to their different situations regarding liquidity and ability to mobilize. The items may be modified or omitted entirely or other conditions introduced to suit particular circumstances.

36. State the range permitted; zero to 20 percent maximum for an Advance Loan is generally acceptable to the IFIs.

37. State the range permitted; a critical completion date may determine the longer limit. otherwise a range of a few months around an acceptable optimal duration may be used. With times of completion around two to four years, a six month range would normally be suitable.

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15.338 Offers are invited from bidders for tbe following technical alternatives to the basic design and specifications included in the bidding documents. Such offers shall be accompanied by all information necessary for a complete evaluation by the Employer, including design calculations, technical specifications, breakdown of prices, proposed construction methodology and other relevant details. Technical alternatives solicited under this subclause shall be considered by the Employer each on its own merits and independently of whether the bidder has priced the basic subject item in the bidding documents.

(a) (Description of selected parts of the Works with appropriate references to Drawings, Specifications, Bill of Quantities and Design/Performance Criteria).

(b) etc.

15.4 Bidders wishing to offer unsolicited technical alternatives to the requirements of the bidding documents must first price the basic technical requirements of the bidding documents and shall further provide all information necessary for a complete evaluation of the alternative by the Employer, including design calculations, technical specifications, breakdown of prices, proposed construction methodology and other relevant details. Only the technical alternatives, if any, of the lowest evaluated bidder on the basic technical requirements shall be considered by the Employer.

Alternative (B) 39

15.1 Bidders shall submit offers which comply fully with the requirements of the bidding documents, including the basic technical design as indicated in the Drawings and Specifications.

16. Pre-Bid Meeting4°

16.1 The bidder or his official representative is advised to attend a pre-bid meeting which will be convened at (Name of Appropriate Office and Address) on (Time and DateJ41.

16.2 The purpose of the meeting will be to clarify issues and to answer questions on any matter that may be raised at that stage (and to show the bidders round the Works Site).42

38. Insert this subclause only if technical alternatives to the basic design are being invited for preselected parts of thc Works. Normally, a basic design is provided in the bidding documents but bidders are sometimes given the option to submit alternative proposals for defined parts of the Works using different construction materials or different designs and technologies, but providing comparable strengths and performance to the basic design. Examples are: alternatives in welded, riveted or bolted connections in structural steelwork; proprietary devices for prestressing concrete; proprietary piling for foundations; pipes of different materials; types of canal lining and road surfacing; etc. Thc section on bid evaluation should describe the method of comparing acceptable alternatives in terms of the quality of technical and performance standards, and capital, maintenance and operating costs, as may be relevant.

This sample bidding document would require modification for bidding competitively on "Turnkey" or "Design and Construct" projects where multiple alternative technical solutions for a complete project might be acceptable (e.g., bridges, buildings, process plants, etc.), and where bidders are provided only with information on site conditions, design parameters and the required end product (performance specification), and the bidders prepare the basic detailed designs themselves. In such cases, prequalification would be normal; the bidding period should provide adequate time for bidders to prepare, detail and price their particular designs, and the bid validity period should be adequate to carry out the design checks and evaluation.

39. Employers may wish to use Alternative (B) to discourage unsolicited deviations from the bidding requirements in cases where the requirements are considered firm. There may be merit however in soliciting alternative offers to specific financial, administrative and technical requirements as provided for in Alternative (A).

40. Such a meeting is desirable for Works of a complex nature and for medium to large Works (e.g., over $10 million equivalent), and is usually combined with an inspection of the Works Site. The Employer should delete this clause if no prebid conference is scheduled.

41. The meeting should be convened early in the bidding process but should allow sufficient time for bidders to study the bidding documents and to prepare questions.

42. The Employer should delete, if inapplicable; with remote or extended sites, this may be impracticable.

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16.3 The bidder is requested to submit any questions III writing or by cable, to reach the Employer not later than one week before the meeting.

16.4 Minutes of the meeting, including copies of the questions raised and responses given, will be furnished expeditiously to all those attending the meeting (and subsequently to all purchasers of the bidding documents). Any modifieation of the bidding documents listed in subclause 6.1 which may become necessary as a result of the pre-bid meeting, shall be made by the Employer exclusively through the issuance of an Addendum pursuant to Clause 8, and not through the minutes of the pre-bid meeting.

17. Fonnat and Signing of Bids

17.1 The bidder shall prepare one original and tw043 copies of the documents comprising the bid as described in subclause 10.1 of these Instructions to Bidders, bound with the Volume containing the Form of Bid, and clearly marked "ORIGINAL" and "COPY" as appropriate. In the event of any discrepancy between them, the original shall prevail.

17.2 The original and copies of the bid shall be typed or written in indelible ink and shall be signed by a person or persons duly authorized to bind the bidder to the Contract. Proof of authorization shall be furnished in the form of a written Power-of-Attorney which shall accompany the bid. All pages of the bid where entries or amendments have been made shall be initialled by the person or persons signing the bid.

17.3 The eomplete bid shall be without alterations, interlineations or erasures, except those to accord with instructions issued by the Employer, or as necessary to correct errors made by the bidder, in whieh case such corrections shall be initialled by the person or persons signing the bid.

17.4 Only one bid may be submitted by each bidder, excepting alternative offers pursuant to Clause 15. No bidder may participate in the bid of another for the same Contract in any relation whatsoever.

D. Submission ofBids

18. Sealing and Marking ofBids

18.1 The bidder shall seal the original and each copy of the bid in an inner and an outer envelope, duly marking the envelopes as "ORIGINAL" and "COPY," as appropriate.

18.2 The inner and outer envelopes shall:

(a) be addressed to (Designation of Officer in Charge, and Address of Appropriate Office for Bid Submission) ;44

(b) bear the following identification: (i) Bid for (Name of Contract);45

(ii) (Reference Number of Bid) ;45 (iii) (Name of Project) 45 and (iv) the words "DO NOT OPEN BEFORE (Time and Date) ".46

43. Two copies should normally suffice for checking purposes. If more are required, state the number, and increase the number of the respective Volumes to be issued to prospective bidders under subclause 6.1. See also footnote 18.

44. The address should be consistent with that address given in the Invitation to Bid.

45, Insertions should correspond to previous references,

46. Insert the bid opening time and date.

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The inner envelopes shall indicate the name and address of the bidder to enable the bid to be returned unopened in case it is declared late or is otherwise unacceptable.

18.3 If the outer envelope is not sealed and marked as instructed above, the Employer will assume no responsibility for the misplacement or premature opening of the bid submitted. A bid opened prematurely for this cause will be rejected by the Employer and returned to the bidder.

19. Deadline for Submission of Bids

19.1 Bids must be received by the Employer at the address specified above no later than (Time and Date}.47

19.2 The Employer may, at his discretion, extend the deadline for submission of bids by issuing an amendment in accordance with Clause 8, in which case all rights and obligations of the Employer and the bidders previously subject to the original deadline shall thereafter be subject to the new deadline as extended.

20. Late Bids

20.1 Any bid received by the Employer after the deadline for submission of bids prescribed by the Employer in accordance with Clause 19 will be returned unopened to the bidder.

21. Modification and Withdrawal of Bids

21.1 The bidder may modify or withdraw his bid after bid submission, provided that the modification or notice of withdrawal is received in writing by the Employer prior to the prescribed deadline for submission of bids.

21.2 The bidder's modification or notice of withdrawal shall be prepared, sealed, marked and delivered in accordance with the provisions of Clause 18 for the submission of bids, with the inner envelopes additionally marked "MODIFICATION" or "WITHDRAWAL" as appropriate.

21.3 Subject to Clause 24, no bid may be modified subsequent to the deadline for submission of bids.

21.4 Withdrawal of a bid during the interval between the deadline for submission of bids and the expiration of the period of bid validity specified by the bidder in the Form of Bid may result in the forfeiture of the bid security pursuant to Clause 14.

E. Bid Opening and Evaluation

22. Bid Opening

22.1 The Employer will open the bids, including submissions made pursuant to Clause 21, in the presence of bidders' representatives who choose to attend, at (Time and Date}48 at the following location: (Room No., Address of Office for Bid Opening). The bidders' representatives who are present shall sign a register evidencing their attendance.

22.2 Bids for which an acceptable notice of withdrawal has been submitted pursuant to Clause 21 shall not be opened. The Employer will examine bids to determine whether they are complete, whether the requisite bid securities have been furnished, whether the documents have been properly signed, and whether the bids are generally in order.

47. The time and date should be consistent with the deadline given in the Invitation to Bid. 48. Insert the date and time of hid opening, which should coincide with that given in the Invitation to Bid, and which

should follow immediately or soon after the deadline for the submission of bids.

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22.3 At bid opening, the Employer will announce the bidders' names, the Bid Prices, written notifications of bid modifications and withdrawals, if any, the presence of the requisite bid security, and such other details as the Employer may consider appropriate.

22.4 The Employer shall prepare, for his own records, minutes49 of the bid opening, including the information disclosed to those present in accordance with subclause 22.3.

23. Process to Be Confidential

23.1 After the public opening of bids, information relating to the examination, clarification, evaluation and comparison of bids and recommendations concerning the award of contract shall not be disclosed to bidders or other persons not officially concerned with such process until the award of the Contract to the successful bidder has been announced.

23.2 Any effort by a bidder to influence the Employer in the process of examination, clarification, evaluation and comparison of bids, and in decisions concerning award of contract, may result in the rejection of the bidder's bid.

24. Clarification of Bids

24.1 To assist in the examination, evaluation and comparison of bids, the Employer may ask bidders individually for clarification of their bids, including breakdowns of unit rates. The request for clarification and the response shall be in writing or by cable, but no change in the price or substance of the bid shall be sought, offered or permitted except as required to confirm the correction of arithmetic errors discovered by the Employer during the evaluation of the bids in accordance with Clause 26.

25. Determination of Responsiveness

25.1 Prior to the detailed evaluation of bids, the Employer will determine whether each bid IS substantially responsive to the requirements of the bidding documents.

25.2 For the purpose of this Clause, a substantially responsive bid is one which conforms to all the terms, conditions and specifications of the bidding documents without material deviation or reservation. A material deviation or reservation is one which affects in any substantial way the scope, quality, or performance of the Works, or which limits in any substantial way, inconsistent with the bidding documents, the Employer's rights or the bidder's obligations under the Contract, and the rectification of which deviation or reservation would affect unfairly the competitive position of other bidders presenting substantially responsive bids.

25.3 If a bid is not substantially responsive to the requirements of the bidding documents, it will be rejected by the Employer, and may not subsequently be made responsive by the bidder having corrected or withdrawn the non-conforming deviation or reservation.

26. Correction of Errors

26.1 Bids determined to be substantially responsive will be checked by the Employer for any arithmetic errors in computation and summation. Errors will be corrected by the Employer as follows:

(a) where there is a discrepancy between amounts in figures and in words, the amount in words will govern; and

(b) where there is a discrepancy between the unit rate and the total amount derived from the

49. A copy of such minutes should be sent by the Employer to the IFI concerned, if requested, followed by a copy of the report on the evaluation of bids as soon as the latter is available, if required by the Loan Agreement.

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multiplication of the unit rate and the quantity, the unit rate as quoted will govern, unless in the opinion of the Employer there is an obviously gross misplacement of the decimal point in the unit rate, in which event the total amount as quoted will govern and the unit rate will be corrected.

26.2 The amount stated in the Form of Bid will be adjusted by the Employer in accordance with the above procedure for the correction of errors and, with the concurrence of the bidder, shall be considered as binding upon the bidder. If the bidder does not accept the corrected amount of bid, his bid will be rejected and the hid security will be forfeited.

27. Conversion to Single Currency

(IBRD)50

27.1 The Bid Price is the sum of all payments stated or expressed as a percentage in various currencies required to be made to the hidder. To facilitate evaluation and comparison of bids, the Employer will convert the amounts in various currencies in which the Bid Price is payable (excluding Provisional Sums but including Daywork, where priced competitively) to the local currency,H of the Employer's country at the selling rates established by (Name of the Central Bank in Employer's Country), or other similar authoritative source for similar transactions, on: Option (A) 52

the date { __)53 days prior to the date specified for the opening of bids. Option (B)52

the date specified for the opening of bids. Option (C)52

the date days after the date specified for the opening of bids. Option (D)52

the earlier of the following dates, namely (i) the date of decision to award the Contract by the approving authority in (Name of Employer's Country); or (ii) the original date prescribed in the hidding documents for the expiry of the period of bid validity if the decision in (i) above is taken after that date.

(IDB) 50

27.1 To facilitate evaluation and comparison, the Employer will convert all Bid Prices (excluding Provisional Sums but including Dayworks, where priced competitively) to the local currency of the Employer's country at the selling exchange rate published by an official source and applicable to similar transactions on: Option (A)54

the date bids are opened.

so. Alternative clauses apply for different IFIs; the Employer should select the appropriate Clause.

5!. Substitute another currency if more convenient to the Employer.

52. For IRRD projects, the Employer should select one of the four Options which best meets the Employer's circumstances. The inapplicable Options should be deleted. IBRD policy is that the conversion to a single currency may be made at the exchange rate prevailing on:

(a) a date selected in advance and specified in the bidding documents, provided that such date should not be earlier than 30 days prior to the date specified for the opening of bids nor later than the original date prescribed in the bidding documents for the expiry of the period of bid validity; or

(b) the date of decision to award the Contract or the original date prescribed in the bidding documents for the expiry of the period of bid validity, whichever is earlier.

53. A number of days should be selected and specified in advance by the Employer. provided the resulting date complies with footnote 52.

51. Delete the inapplicable option.

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Option (B) 54 the date { __)55 days after bid opening as shall be specified in the call for bids.

28. Evaluation and Comparison of Bids

28.1 The Employer will evaluate and compare only bids determined to be substantially responsive to the requirements of the bidding documents in accordance with Clause 25.

28.2 In evaluating bids, the Employer will determine for each bid the Evaluated Bid Price by adjusting the Bid Price as follows:

(a) making any correction for errors pursuant to Clause 26; (b) excluding Provisional Sums and the provision, if any, for Contingencies in the Summary Bill

of Quantities, but including Daywork where priced competitively; (c) converting the amount in (b) above to a single currency in accordance with Clause 27; (d) adding any monetary cost of quantifiable variations with timing implications, assessed In

accordance with subclause 28.3; (e) adding any benefits foregone for longer times of completion, assessed in accordance with

subclause 28.4; and (f) making an appropriate adjustment for any other acceptable quanitfiable variations, deviations

or alternative offers not reflected in the Bid Price or in the above mentioned other ajustments.

28.3 The monetary costs to the Employer of variations in the amounts of advance mobilization loans requested by bidders pursuant to subclause 15.1, and of quantifiable variations with timing implications submitted pursuant to subclause 15.2, shall be assessed in net current terms on a monthly basis and discounted to present values as of the dates specified in subclause 27.1 using a discount rate of )56 percent per annum, and shall be added to the respective bidder's Bid Price for comparison purposes only.

28.457 For the purpose of comparing different times for completion offered by respective bidders, the benefits foregone by the Employer for each month of completion longer than the shortest time for completion offered by a responsive bidder shall be assessed at percent of the respective bidder's Bid Price (corrected for arithmetic errors, if any). The foregone benefits so assessed shall be discounted to present values in accordance with subclause 28.3 above,59 and added to the respective bidder's Bid Price for comparison purposes only.

55. Specify, normally 30 or 60 days. 56. Insert an appropriate percentage rate for interest charges and discounting. The current monetary costs to the Employer

of the various factors under consideration should bc assessed and expressed in a common currency using exchange ratcs prevailing at the date stated in the bidding documents for bid comparison. A single prescribed discount rate should be used for calculating present values as of that date. Unless otherwise agreed with the IFI, the discount rate to be used shall be the borrowing rate of the Central Bank of the country in the currency of which all bids have bcen converted for comparison, plus one percentage point.

57. Omit the entire subclause 28.4 if alternative time periods are not permitted. 58. A figure for benefits should be inserted by the Employer representing the expected future return on contract investmcnt

plus supervisory costs. A reasonable expected range is from 1.0 percent to 1.5 percent per month, or an annual rate of about 12 percent to 18 percent. Instead of a percentage of Bid Prices, the Employer may substitute a sum common to all bidders, derived as a percentage of the Engineer's Estmate.

Where bids are invited concurrently for different lots with diffcrcnt times for completion, and bidders offer rebates or discounts if awarded more than one lot ("slice and package"), the sequence of applying the factors in bid evaluation should be clearly stated in the bidding documents (subclause 28.2), as the ranking order of bids may be changed by varying the sequence.

59. As an alternative to discounting the benefits to PV, a discount factor may be built into the monthly rate quoted in accordance with footnote 58. For examplc, for a time of completion around 36 months at an annual discount rate of 10 percent, the discount factor for PV would be about 0.75 of the above monthly rates.

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28.5 The Employer reserves the right to accept or reject any vanatIOn, deviation or alternative offer. Variations, deviations, alternative offers and other factors which are in excess of the requirements of the bidding documents or otherwise result in the accrual of unsolicited benefits to the Employer shall not be taken into account in bid evaluation.

28.6 Price adjustment provisions applying to the period of execution of the Contract shall not be taken into account in bid evaluation.

28.7 If the bid of the successful bidder is seriously unbalanced60 in relation to the Engineer's estimate of the real cost of work to be performed under the Contract, the Employer may require that the amount of the performance security set forth in Clause 34 be increased at the expense of the successful bidder to a level sufficient to protect the Employer against financial loss in the event of subsequent default of the successful bidder under the Contract.

(IBRD)

29. Preference for Domestic Bidders61

29.1 Domestic bidders shall provide all evidence necessary to pro:ve that they meet the following criteria to be eligible for a 7-1/2 percent margin of preference in the comparison of their bids with those of non-eligible bidders, i.e., that they:

(a) are registered within (Name of Employer's Country); (b) have majority ownership by nationals of (Name of Employer's Country); (c) have not subcontracted more than 50 percent of the contract Works measured in terms of

value to foreign contractors; and

etc.

29.2 Joint ventures between domestic and foreign firms shall be eligible for the margin of preference provided:

(a) the domestic partner or partners individually satisfy the criteria for eligibility set forth above; (b) the domestic partner or partners would not be qualified for the contract Works in question on

technical or financial grounds without the foreign participation; (c) the domestic partner or partners will, under the arrangements proposed, carry out at least

50 percent of the contract Works measured in terms of value; and

etc.

60. An "unbalanced" or "frontloaded" bid is one in which some prices are relatively high and others low in relation to the Engineer's estimate of the real cost of work to be performed. The imbalance may be due to a genuine error on the part of the bidder or a misconception of the risks involved, but more often it is due to the bidder's attempt to increase cash flow over his true needs by inflating the price of those items of work occuring early in the program, or of those items which he feels will be used more than scheduled. Any seriously unbalanced pricing should be "clarified" by the Employer with a view to its justification by the bidder, and also to determine whether the successful bidder should provide additional performance security to cover the Employer's exposure in the event of subsequent default (see subclause 28.7).

A rational but little used method of comparing all the possible variablcs in bid pricing is by discounting the profiles of estimated future contract payments of different bidders (Schedule II) at a prescribed discount rate, and awarding the Contract on the basis of the present value (PV) of payments to be made by the Employer. The PV method of bid comparison is not included in this sample bidding document, and would require the introduction of provisions for modifying the payment profile of the successful bidder (which would become contractual) in the event of varied or additional work or extension of time for completion during execution of the Contract.

61. To be inserted only in IBRD documents at the option of a qualifying borrowing country; otherwise omit (see subclause 3.8) and footnote 16.

62. The borrowing country and the Employer may add other criteria (not affecting competition as amongst foreign bidders) with the agreement of IBRD.

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29.3 The following procedure will be used to give effect to the margin of preference: (a) After bids have been evaluated fully in accordance with the provisions of Clause 28

hereinabove, responsive bids will be classified into the following groups: (i) Group A: bids offered by domestic bidders meeting the criteria set forth in subclause 29.1 hereinabove and by joint ventures meeting the criteria set forth in subclause 29.2 hereinabove; and (ii) Group B: bids offered by other bidders.

(b) For the purpose of further evaluation and comparison of bids only, an amount equal to 7-1/2 percent of the Evaluated Bid Price determined in accordance with the provisions of Clause 28 hereinabove will be added to such Evaluated Bid Price of bids classified in Group B.

F. Award ofContract

30. Award Criteria

30.1 Subject to Clause 31, the Employer will award the Contract to the bidder whose bid has been determined to be substantially responsive to the bidding documents and who has offered the lowest Evaluated Bid Price pursuant to Clause 28, provided further that the bidder has the capability and resources to carry out the Contract effectively (ref. subclause 3.5).

31. Employer's Right to Aeeept Any Bid and to Reject Any or All Bids63

31.1 Notwithstanding Clause 30, the Employer reserves the right to accept or reject any bid, and to annul the bidding process and reject all bids, at any time prior to award of Contract, without thereby incurring any liability to the affected bidder or bidders or any obligation to inform the affected bidder or bidders of the grounds for the Employer's action.

32. Notification of Award

32.1 Prior to the expiration of the period of bid validity prescribed by the Employer, the Employer will notify the successful bidder by cable confirmed in writing by registered letter that his bid has been accepted. This letter (hereinafter and in the Conditions of Contract called "Letter of Acceptance") shall name the sum which the Employer will pay to the Contractor in consideration of the execution, completion and maintenance of the Works by the Contractor as prescribed by the Contract (hereinafter and in the Conditions of Contract called "the Contract Price").

32.2 The notification of award will constitute the formation of the Contract.

32.3 Upon the furnishing by the successful bidder of a performance security in accordance with the provisions of Clause 34, the Employer will promptly notify the unsuccessful bidders that their bids have been unsuccessful.

33. Signing of Agreement

33.1 At the same time that he notifies the successful bidder that his bid has been accepted, the Employer will send the bidder the Form of Agreement provided in the bidding documents, incorporating all agreements between the parties.

33.2 Within { __)64 days of receipt of the Form of Agreement, the successful bidder shall sign the Form and return it to the Employer.

63. Employers should note that no bid should he rejected. nor a bidding process annulled, except as permitted under the applicable procurement rules of the IFI (including the "Guidelines for Procurement").

M. Insert an appropriate number; normally 15-30 days should suffice.

PW 10-85 21

1.20

34. Performance Secnrity

34.1 Within )64 days of receipt of the notification of award from the Employer, the successful bidder shall furnish to the Employer a performance security in the form of a bank guarantee in an amount of {__ )65 percent of the Contract Price or (at the bidder's option)66 a performance bond in an amount of )67 percent of the Contract Price in accordance with the Conditions of Contract. The forms of performance security provided in Section 9 of the bidding .documents may be used or some other forms acceptable to the Employer.

34.2 If the performance security is to be provided by the successful bidder in the form of a bank guarantee, it shall be issued either a) at the bidder's option, by a bank located in the country of the Employer or a foreign bank through a correspondent bank located in the country of the Employer, or b) with the agreement of the Employer directly by a foreign bank acceptable to the Employer.

34.3 If the performance security is to be provided by the successful bidder in the form of a bond, it shall be issued by a bonding/insurance company which has bee~ determined by the successful bidder to be acceptable to the Employer.

34.4 Failure of the successful bidder to comply with the requirements of Clause 33 or Clause 34 shall constitute sufficient grounds for the annulment of the award and forfeiture of the bid security. 68

65. A bank guarantee can bc of the conditional or unconditional (on demand) type issued by a commercial bank (see Section 9). An amount of 10 percent of the contract value is commonly specified for bank guarantees.

66. Insert "at the bidder's option" in IBRD documents only.

67. The performance bond system of ensuring contract completion has its origin in North America, and takes the form of an undertaking by a bonding or insurance company to complete the construction in the event of a default by the Contractor, or to pay the amount of bond to the Employer. An amount of 30 percent of the contract value is commonly used intcrnationally for this type of security, but coverage can extend up to 100 percent with little extra cost in premium.

68. In which event, the Employer may make the award to the next lowest evaluated bidder or, if there are no other bidders, call for new bids.

22

L

2.1

Section 2. GENERAL CONDITIONS OF CONTRACT

Notes69

Over the years, a number of more or less standard general Conditions of Contract have evolved based on sound and accepted commercial and contracting practices. One of these documents has been prepared by the "HSderation Internationale des Ingenieurs-Conseils" (FIDIC) and is commonly known as the FIDIC Conditions of Contract. It is based on the principles of Common Law and is reproduced herein for illustrative purposes.

2. Any other standard national or international Conditions of Contract acceptable to the IFI concerned may be used for Works procured by international competitive bidding. Other Conditions of Contract should preferably cover all clauses listed in the "Table of Contents" of the FIDIC document.

3. With all such standard documentation, the general "Conditions of Contract" should preferably be retained intact to facilitate perusal by bidders and review by the IFIs. Modifications to the general provisions specific for the sector/project/contract should be introduced in the "Special" Conditions of Contract or, in FIDIC terminology, "Part II Conditions of Particular Application;" Section 3 hereinafter contains modifications which may be appropriate in most cases. Other modifications should be introduced to suit the circumstances of a particular sector, project or contract.

4. The use of standard Conditions of Contract for all civil works in any particular country ensures comprehensiveness in coverage, general acceptability of the provisions therein, savings in time and cost of bid preparation and review, and the development of usefullegal case history.

fIJ. These "Notes" are for the information of the Employer only, and should not be included in the final bidding documents.

PW 10-85 23

2.2

SAMPLE

CONDITIONS OF CONTRACT

PREFACE

The Conditions of Contract comprise two parts, namely: Part I - General Conditions Part II - Conditions of Particular Application

PART I

The General Conditions comprise Part I - General Conditions of the "Conditions of Contract

(International) for Works of Civil Engineering Construction," 3rd edition, March 1977, prepared by

the Federation Internationale des Ingenieurs-Conseils (FIDIC), Lausanne, Switzerland.

PART II

The Conditions of Particular Application shall prevail over the General Conditions and are

amendments and additions to the General Conditions. Clauses in this part having clause numbers 72

or less are amendments of the General Conditions and carry the numbers of the Clauses which they

amend.

The following Clauses in Part I have been amended:

1, 2, 5, 8, 10, 14, 21, 23, 24, 34, 47, 51, 52, 53, 60, 67, 68, 69, 70 and 72.

The following Clauses are additional to Part I:

73, 74, 75, 76, 77 and 78.

24

2.FIDIC-i

Reproduced with permission ofF.I.D.I.C.

THIRD EDITION

CONDITIONS OF CONTRACT

(INTERNATIONAL)

FOR WORKS OF

CIVIL ENGINEERING

CONSTRUCTION

with forms of tender and agreement

MARCH 1977

Approved by the following Organisations:

FEDERATION INTERNATIONALE DES INGENIEURS·CONSEILS

P.O. Box 86. CH·1000 Lausanne 12·Chailly. Switzerland

FEDERATION INTERNATIONALE EUROPEENNE DE LA CONSTRUCTION

9. rue la Perouse. 75016 Paris. France

INTERNATIONAL FEDERATION OF ASIAN AND WESTERN PACIFIC CONTRACTORS ASSOCIATIONS

P.O. Box 1664, Makati, Rizal. Philippines

LA FEDERACION INTERAMERICANA DE LA INDUSTRIA DE LA CONSTRUCCION

Calles Aquilino de la Guardia y 52 Apt. 6793 Panama 5, Panama

THE ASSOCIATED GENERAL CONTRACTORS OF AMERICA

1957 E Street N.W.. Washington. D.C. 20006. U.S.A.

THE INTERNATIONAL ASSOCIATION OF DREDGING COMPANIES

Duinweg 21, 2585 JV The Hague, The Netherlands

PW HHl5 25

2.FIDIC-iii

Note of AgreeD1ent regarding Conditions of Contract (International) for Works of Civil Engineering Constrnetion

The terms of the Third Edition of the Conditions of Contract (International) for Works of Civil Engineering Construction, prepared by the Federation Internationale des Ingenieurs-Conseils (F.LD.I.C.) and the Federation Internationale Europeenne de la Construction (F.I.E.C.) are approved by those organisations, and also by the Associated General Contractors of America (AG.C.A.), the Inter-American Federation for the Construction Industry (F.I.I.C.) and the International Federation of Asian and Western Pacific Contractors' Associations (I.F.A.W.P.C.A), and are recommended by them for general use for the purposes of contracts for the construction of such works where tenders are invited on an international basis. It is further agreed that:

(i) Without the derogating from the provisions of Clause 5 (1) of the said Conditions as to the designation in any contract of any specified language as the "Ruling Language" for the purposes of such contract the version in English of the said Conditions shall he considered as the official and authentic text thereof for the purposes of translation thereof into any other language.

eli) Official translations from English of the said Conditions shall be prepared into French, German and Spanish and into such other languages as F.LD.I.C. and F.I.E.C. may from time to time jointly agree.

@ F,I.D,l.e, 1977

PW 10-85 27

2.FIDIC-iv

GENERAL CONDITIONS-Table or Contents CLAUD PAGE

DEFINITIONS AND INTERPRETATION

(1) Defini.tiOIlll (2) Singular and Plural (3) Headings or Notes (4) Cost

ENGINEER AND ENGINEER'S REPRESENTATIVE

2 Duties and PoweI'$ of Engineer and Engineer's Representative .. 1 & 2

ASSIGNMENT AND SUB-LETTING

3 Assignment 2

4 Sub-letting 2

CONTRACT DOCUMENTS

5 (1) Language/s and Law 2

(2) Documents Mutually Explanatory ... 2

6 (I) Custody of Drawings 2

(2) One Copy of Drawings to be kept on Site 2

(3) Disruption of Progress 2

(4) Delays and Cost of Delay of Drawings 3

7 Further Drawings and Instructions ... 3

GENERAL OBLIGATIONS

8 Contractor's General Responsibilities 3

9 Contract Agreement 3

10 Perfonnance Bond 3

II Impection of Site... 3

12 Sufficiency of Tender-Adverse Physical Conditions and Artificial Obstructions 3

13 Work to be to the Satisfaction of Engineer 4

14 Programme to be Furnished 4

15 Contractor's Superintendence 4

16 Contractor's Employees 4:

17 Setting Out 4:

18 Boreholes and Exploratory Excavation 4:

19 Watching and Lighting 5

20 (1) Care of Works 5

(2) Excepted Risks 5

21 Insurance of Works, etc 5

22 (1) Damage to Persons and Property 5

(2) Indemnity by Employer 6

23 (1) Third Party Insurance 6

(2) Minimum Amount of Third Party Insurance ... 6

(3) Provision to Indemnify Employer 6

24 (1) Accident or Injury to Workmen 6

(2) Insurance against Accident, etc., to Workmen 6

25 Remedy on Contractor's Failure to Insure 6

26 (1) Giving of Notices and Payment of Fees 6

(2) Compliance with Statutes, Regulations, etc. 6

27 Fossils, etc. 6

28 Patent Rights and Royalties 7

29 Interference with Traffic and Adjoining Properties 7

30 (I) Extraordinary Traffic 7

(2) Special Loads 7

(3) Settlement of Extraordinary Traffic Claims 7

(4) Waterborne Traffic 7

31 Opportunities for Other Contractors... 7

32 Contractor to keep Site Clear 7

33 Clearance of Site on Completion 7

28

PW HHl5

2.FIDIC-v

General Conditions-Table of Contents-continued

CLAUSE PAGE LABOUR

34 (I) Engagement of Labour 8

(2) Supply of Water ... 8

(3) Alcoholic Liquor or Drugs ... 8

(4) Arms and Ammunition 8

(5) Festivals and Religious Customs 8

(6) Epidemics 8

(7) Disorderly Conduct, etc. 8

(8) Observance by Sub·Contractors 8

(9) Other Conditioru affecting Labour and Wages 8

35 Returru of Labour, etc. iii

MATERIALS AND WORKMANSHIP

36 (1) Quality of Materials and Workmaruhip and Tests 8

(2) Cost of Samples ... 8

(3) Cost of Tests 8

(4) Cost of Tests not Provided for, etc. 8

37 Irupection of Operations 8

38 (1) Examination of Work before Covering up 9

(2) Uncovering and Making Openings ... 9

39 (1) Removal of Improper Work and Materials 9

(2) Default of Contractor in Compliance 9

40 (1) Suspension of Work 9

(2) Suspension Lasting more than 90 days 9

COMMENCEMENT TIME AND DELAYS

41 Commencement of Works 9

42 (1) Possession of Site ... 10

(2) Wayleaves, etc. 10

43 Time for Completion 10

44 Extension of Time for Completion 10

45 No Night or Sunday Work ... 10

46 Rate of Progress ... 10

47 (Il Liquidated Damages for Delay 10

(2) Reduction of Liquidated Damages II

(3) Bonus for Completion 11

48 (1) Certification of Completion of Works 11

(2) Certification of Completion by Stages 11

MAINTENANCE AND DEFECTS

49 (I) Defini tion of Period of Maintenance ... II

(2) Execution of Work of Repair, etc. 11

(3) Cost of Execution of Work of Repair, etc. 11

(4) Remedy on Contractor's Failure to Carry Out Work Required 11

50 Contractor to Search 12

ALTERATIONS, ADDITIONS AND OMISSIONS

51 (1) Variations 12

(2) Orders for Variatioru to be in Writing 12

52 (I) Valuation of Variations 12

(2) Power of Engineer to Fix Rates 12

(3) Variations exceeding 10 per cent 12

(4) Daywork 13

(5) Claims ... 13

PLANT, TEMPORARY WORKS AND MATERIALS

53 (I) Plant, etc., Exclusive Use for the Works 13

(2) Removal of Plant, etc. 13

(3) Employer not liable for Damage to Plant, etc. 13

(4) Re.export of Plant ... 13

(5) Customs Clearance 13

(6) Other Conditions affecting Plant, Temporary Works and Materials 13

54 Approval of Materials, etc., not implied 13

29

2.FIDIC-vi

General Conditions--Table of Conteots-continU4d

CLAUSE

55 56 57

58 (I) (2) (3)

59 (I) (2) (3) (4) (5) (6)

60 (I) (2) (3)

61 62 (1)

(2) (3)

63 (I) (2) (3)

64

65 (I) (2) (S) (4) (5) (6) (7) (8)

66

67

68 (I) (2) (3)

69

70 (1) (2)

71 72

MEASUREMENT Quantities Works to be Measured Method of Measurement

PROVISIONAL SUMS Definition of Provisional Sums Use of Provisional Sums Production of Vouchers, etc.

NOMINATED SUB-CONTRACTORS Definition of Nominated Sub-Contractors Nominated Sub-Contractors, Objection to Nomination ... Design Requirements to be Expressly Stated ... Payments to Nominated Sub-Contractors Certification of Payments to Nominated Sub-Contractors Assignment of Nominated Sub-Contractors' Obligations

CERTIFICATES AND PAYMENT Certificates and Payment ... Advances on Constructional Plant and Materials Payment in Foreign Currencies Approval only by Maintenance Certificate Maintenance Certificate Cessation of Employer's Liability Unfulfilled Obligations

REMEDIES AND POWERS Default of Contractor Valuation at Date of Forfeiture