1. Training Programme on Procurement for End Recipients
Bölgesel Rekabet Edebilirlik Operasyonel Programı’nın Uygulanması için Kurumsal Kapasitenin Oluşturulmasına Yönelik Teknik Yardım
Technical Assistance on Institutional Building for the Implementation of RCOP in Turkey
Training Programme on Procurement for End Recipients
Trainer: Aslı Gülgör
Procurement of Contract Management Non Key Expert

2. Works Contracts

3. PRAG in Procurement
FIDIC in Implementation(execution)

4. Vision in Tendering Vision
The Americans are very fond of the word “Vision”. Several of the large consultancy businesses have put together Project Delivery Manuals (PDMs). These are intended for all stakeholders in the project process (i.e. financiers, International Finance Institutions (IFI’s), contractors, consultants, clients and government departments). There is a big focus on a common vision being achieved with all parties at the earliest possible stage in a project. The process by which a common vision is achieved, is often called Chartering. The simplest explanation of chartering is a common document signed by all stakeholders in which they agree to who is doing what and what each parties outputs shall be.
Typically even at the pre-tender stage the client and his financiers can agree on a vision of the output of the project in terms of its fundamental performance requirements.
The slide uses the analogy of cars. Typically an individual would know in advance what sort of car he would want to tender for and of his budgetary limitations. It would be nonsense to tender for a car of any description because as well as wasting the time of most of the bidders, it would result in a series of bids which were not comparable.

5. Vision Rugged (Reliable) High Performance (Short Life) Basic (Cheap)
Luxury (Expensive) Long Life

6. Short Lists

7. Performance Loading (Hydraulic/Chemical/Biological)
Temperature (Process Kinetics, Plant)
Compactness
Reliability
Design Life
Operability
Compatibility

8. Conditions of Contract

9. Fédération Internationale des Ingénieurs- Conseils

10. Founded in 1913
An umbrella organization with the membership of national associations
Has more than 70 members
Represents the consulting industry

11. FIDIC Documents Contracts Agreements Procedures Consultancy Documents
Information Documents

12. Standard Contracts FIDIC NEC ICE (The Institution of Civil Engineers)
AIA (American Institute of Architects)
Engineering Advancement Association of Japan
Construction Industry Development Board Singapore
Kreditanlage für Wiederaufbau, Germany
Joint Contracts Tribunal for the Standard Form of Building Contracts

13. FIDIC
ATCEA – Association of Turkish Consulting Engineers and Architects
(TMMMB - Türk Müşavir Mühendisler ve Mimarlar Birliği)
is the only representative body of FIDIC in Turkey;
Established in Ankara in 1980 and has over 200 members;
ATCEA is a member of FIDIC since 1987;
Sells and distributes its own publications as well as FIDIC’s
In EU funded projects, ATCEA is requested to appoint the DAB /

14. FIDIC
Standardisation both in technical and administrative matters is essential for the successful completion of projects of civil engineering constructions;
FIDIC is known throughout the world for producing standard forms of contract for civil engineering construction, and mechanical and electrical plant to govern international contracts;
In 1999, FIDIC standardised its model contracts, with the publication of first editions of a new family of contracts comprising four new standard forms of contract:
Conditions of Contract for Construction (“Red Book”)
Conditions of Contract for Plant and Design-Build (“Yellow Book”)
Conditions of Contract for EPC/Turnkey Projects (“Silver Book”)
Short Form of Contract (“Green Book”)

15. Why FIDIC
BALANCED fair apportioning of risks, rights and obligations between the parties
WELL TRIED long case history for earlier contracts
ACCEPTED known and recognised; in wide use for international contracts
SUPPORTED recommended or required by development banks, International Financial Institutions, large development funds, etc.
EFFECTIVE clear and complete conditions; time limits; provisions for adjudication

16. FIDIC Standard Form of Contracts
FIDIC New Red Book
FIDIC New Yellow Book
FIDIC Green Book
FIDIC Silver Book
FIDIC Orange Book
FIDIC New White Book

17. The New Red Book
The Client carries out all the engineering services and copes with the risks.
The Consultant is responsible for the management and supervision.
Checking and supervision of the design and Works, approval of those or rejection are Consultant's responsibilities
The Contractor is paid per production and based on unit prices, risk of cost overrun is the risk of the Client.
During the implementation of the Works detailed tests are performed. Usually tests are simpler during the Handover Period and Start-up.
Disputes are caused are due to unexpected extra Works and increase of Cost.
There is usually a cost overrun
Consultant works as a daily Arbitrator.

18. The New Yellow Book
The Contractor carries out all the detail engineering services.
The Contract deals not with "HOW TO DO" but with "WHAT TO DO"
The main document is the "Employers Requirements" and explains what performance and quality is expected.
The Contractor takes most of the risks including the overrun in quantity and cost.
The Client may hold the authority to approve the design.
Management and supervision of the contract is carried out by the Consultant.
Checking and supervision of the design and Works, approval of those or rejection are Consultant's responsibilities
The Contractor is paid on a calendar basis at on some milestones.
During the implementation of the Works simpler tests are performed. Usually tests are more complicated during the Handover Period and Start-up.
Disputes are caused are due to different interpretation of the "Employer's Requirements"
Consultant works as a daily Arbitrator.

19. The Silver Book The contractor is the designer
The main document is the Client requisition and it defines the products.
The contractor is the complete risk taker for the cost and price increases.
All the work is done on turn key basis by the contractor.
Design authorization is not necessary.
Consultant is not needed. The Contractor has the control.
The payment is made according to the calendar or per product.
Tests are not carried out during work. The tests carried out for the products are highly detailed.
Problems appear at the end of the work.
Conflicts are mostly solved by arbitration.

20. The Green Book Client's Representative replace the Consultant
Design may be carried out by the Client or the Contractor.
Work may be implemented and paid on unit price or lump sum
The design made by the Contractor may be approved by the Client or by the Client's Representative.
The Client has the right to supervise the design and the Works.
Quality assurance is in Contractor's responsibility.
Cost overrun may occur due to poor cost monitoring.
Whoever is liable for the design is also take the risk of quantity and cost overrun.

21. WHICH BOOK ? no yes yes yes no
Is it a straightforward and simple project?
Is there any risk on design or process? no no
yes
yes
Are the market and the unprecedented risks high?
Fixed price – turn key
Restricted client contribution
High market risks
yes no no
DETAILED EXAMINATION
Correct according to Client`s requisitions and then create a modified contract
“Which book should be used?” is one of the first questions to address when preparing a project. If the project is simple and straight-forward, the Short Form of Contract is often sufficient. It is simple, yet flexible, and easy to use.
The responsibility for design constitutes the significant distinction between the other contracts. If the Employer is responsible for design, then the Conditions of Contract for Construction should be used. If the Contractor is responsible for design, then one of the two other contracts would normally be appropriate. If the contract is for construction of plant, or has relatively important unforeseen risks, or both, then the Conditions of Contract for Plant and Design-Build would be used. If the contract is for a fixed-price, lump-sum project, with little employer involvement and no major unforeseen risks, then the Conditions of Contract for EPC/Turnkey Projects would be used. Later, I will explain the differences between the last two ones in more detail.

22. Other Documents

23. PRAG
The Practical Guide demands some particularisations of FIDIC and some usage of non-FIDIC forms. Primarily EU wants a ”say” in:-
The acceptance of the selected bidder
Origination of Goods
The powers of the Engineer to commit money
Avoidance of Corrupt Practices
Joint Ventures
The base date is used for clauses on unforeseen circumstances. It is the date when it is deemed under the contract that the contractor had all of the information that he needed to make an expert judgement.

24. PRAG Letter of Acceptance
”No Letter of Acceptance will be issued under this contract. Only the signing of the Contract Agreement by the Employer will constitute formal acceptance of the Tender. Any activities referred to in the Contract which relate to the date of issue of the Letter of Acceptance shall be construed as being determined from the date of signing of the Agreement by the Employer”
The base date is used for clauses on unforeseen circumstances. It is the date when it is deemed under the contract that the contractor had all of the information that he needed to make an expert judgement.

25. PRAG Eligibility Rule Also for Works Contracts
The base date is used for clauses on unforeseen circumstances. It is the date when it is deemed under the contract that the contractor had all of the information that he needed to make an expert judgement.

26. PRAG Limitation of Engineer’s Powers
The phrase “particular conditions” in the General Conditions of Contract shall be synonymous with the phrase “Special Conditions” used in latest edition of the EU Practical Guide.
The Engineer shall obtain the specific approval of the Employer before taking action under the following Sub-Clauses of these Conditions:
(a) Sub-Clause 3.5: agreeing or determining any matter which will increase the Contract Price.
(b) Sub-Clause 8.4: agreeing or determining an extension of the Time for Completion;
(c) Clause 13: Instructing a Variation which is expected to change the Contract Price or change the scope, character or quality of the Works.
Notwithstanding the above inserted sub-clauses the Engineer may act in isolation to alter the Contract Price in a matter which urgently affects the safety of the site, the workers and the public.
The base date is used for clauses on unforeseen circumstances. It is the date when it is deemed under the contract that the contractor had all of the information that he needed to make an expert judgement.

27. PRAG - FIDIC Integration

28. PRAG Works PRAG & FIDIC integration
This project is co-financed by the European Union and the Republic of Turkey
PRAG & FIDIC integration
PRAG; Practical Guide to Contract Procedures for EU External Actions
FIDIC; conditions of contract
FIDIC replaces/changes certain documents of PRAG, but
Mainly they complement each other.
It is important to understand what each stands for in practice…
Advanced Training PRAG Works 5-7 April 2011

29. Works Contracts Work Contract Types by nature
Construction (Employer’s Design FIDIC RED BOOK)
Plant and Design – Build (FIDIC YELLOW BOOK)
Design Build Operate
(FIDIC YELLOW BOOK)
(FIDIC GOLD BOOK – still not finalized)
EPC (Engineer Procure Construct) /Turnkey Projects (FIDIC SILVER BOOK)

30. Procurement Procedures
This project is co-financed by the European Union and the Republic of Turkey
≥ € 5,000,000
1.International Open Tender Procedure
2. International Restricted Tender Procedure
< € 5,000,000 &
> € 300,000
Local Open Tender Procedure
< € 300,000 &
> € 10,000
Competitive Negotiated Procedure
≤ € 10,000
Single Tender
(for all procurement types)
Advanced Training PRAG Works 5-7 April 2011

31. Single Tender ≤ € 10.000 PRAG 2.4.8 defines the procedures
This project is co-financed by th European Union and the Republic of Turkey
≤ €
PRAG defines the procedures
Single tenderer is sufficient
Basic principles should be met (eligibility rules, capacity, exclusion criteria, etc.)
Advanced Training PRAG Works 5-7 April 2011

32. Competitive Negotiated Procedure
3 contractors are invited (Invitation Letter + Tender Dossier)
30 days for submission of proposals
Tenders are evaluated by a committee of 3
1 compliant tender is sufficient to award
After 2 successive failures CA may proceed with negotiated procedure
Subject to prior approval of the EC
Advanced Training PRAG Works 5-7 April 2011

33. Local Open Tenders No forecast notice
Not published on the OJ of EC but on the OJ of the Beneficiary Country or equivalent media
PN must also be published on the Europeaid website
Give 15 days for translation
Equal opportunities for the eligible contractors located outside the Beneficiary Country
Advanced Training PRAG Works 5-7 April 2011

34. International Open Tenders
FN must be published on the Europeaid website
Give 15 days for translation
PN must be published in OJ of EC and on the OJ of the Beneficiary Country or equivalent media
PN must also be published on the Europeaid website
Advanced Training PRAG Works 5-7 April 2011

35. Sequence of Events
Time planning is crucial for successful tendering & contracting
Supervision and Work Tenders have to run in parallel;
Relevant contracts should be signed after securing the other,
Supervision contract should commence before the relevant works contract (ideally 1 month)

36. International Open Works
Supervision
Local Open Works
International Open Works
Forecast Notice
Yes 30 days x
Procurement Notice
Yes
EoI Submission
PN + 30 days
Tender Submission
SL + 60 days
PN + 60 days
PN + 90 days
Advanced Training PRAG Works 5-7 April 2011

37. Works Procurement Sequence ERAs
RED BOOK
Meetings with End Users and Suppliers for a proper TS
Preparation of the Design Concept / Note
Alternative Conceptual Designs (2 to 3)
Presentation and discussion on conceptual designs
Revisions and approval of the conceptual design
Engineering calculations
Detailed Execution Designs (Volume 5)
Technical Specifications (Volume 3)
Bill of Quantities & Financial Proposal (Volume 4)
Volume 1 & 2
Advanced Training PRAG Works 5-7 April 2011

38. Do not forget Please note that; This is a team’s work
It is not simply a works tender dossier;
There is design of a building/facility from scratch
There are laws and regulations that have to be addressed
Design responsibility / indemnity insurance should be confirmed
It takes time minimum 5 months
Advanced Training PRAG Works 5-7 April 2011

39. Dividing Lots When and why do we need them?
Not for artificial splits to lower thresholds and shorten tendering periods
To secure contracting
To ease implementation (fewer contracts are easier to manage)
To assign appropriate contractors
To have a sector focused approach
Supervision contract(s) should also be assessed accordingly

40. Particular Conditions of Contract
The Particular Conditions take priority over the General Conditions
Are the instrument for the Contracting Authority/ Beneficiary, for introducing the particular aspects of the local legislation, or of the project.
The General Conditions can be applied for any project, anywhere in the world, but will never be able to deal with the specific issues related to a specific project, nor to the legislation of a certain country

41. Particular Conditions of Contract
The PC should provide all relevant conditions that relate to the projects and the laws of the contract, which add, complement, or amend the General C
In drafting the PC, one must pay particular attention to cross-reference with all other interconnected Clauses that may be affected.
Make sure you don’t create ambiguities with other Clauses, or provisions of other documents
Major exercise in cross referencing PC with: GC
Technical Specifications
Schedule/ Annexes (e.g. delivery schedule)

42. Particular Conditions of Contract
Examples should be only used after verifying they are suitable for your specific case and adapted accordingly
The guidance is to assist writers of the special conditions, by giving options for various sub-clauses where appropriate
It is recommendable that suitably-qualified engineers (technical staff) to prepare documents and a review by a suitably-qualified legal advisers
There is no specific Clause in the General C requiring additional data to be included in the PC, this is done only when and as much as necessary
Any modification of existing Clauses, or insertion of a new Clause, must be made for a clear reason and only in conjunction with the other Clauses
PC will only contain modified Clauses, without repeating the ones from GC that are not modified

43. Main aspects to be addressed in PC
Applicable law and language
Contractor’s obligations
Performances/ Insurances
Timetable/ Schedules
Documents/ Drawings/ Specifications/ Manuals
Patents and licences
Variations of contracted quantities

44. Main aspects to be addressed in PC
Quality levels
Inspection/ Testing at the delivery, Testing after installation
Acceptance
Payments methods/ schedules
Delivery – place, risks, related documents and procedures
Warranty/ After-sales services
Disputes resolution

45. Bill 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.

46. Bill of Quantities-BoQs
The Bill of Quantities should be divided generally into the following sections:
a. Preamble;
b. Work Items (grouped into parts);
c. Daywork Schedule; and
d. Summary.

47. BoQs Preamble
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.

48. BoQs Work Items
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.

49. BoQs Work Items
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.

50. BoQs Daywork schedule
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

51. 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.

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

53. BoQs Provisional Sums
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)

54. Technical Specifications

55. Technical Specifications
General Specifications
For each work item
(Civil/Structural, Architectural, Electrical, Mechanical)
Technical Specifications
Item Descriptions
Material Lists
Standards and Codes
Advanced Training PRAG Works 5-7 April 2011

56. Technical Specifications
In order to secure fair competition;
Local item codes should not be used,
A unique coding system should be established,
Proper English level should be reached in technical specifications,
Creating unfair advantage to certain tenderers should be avoided
Advanced Training PRAG Works 5-7 April 2011

57. Contract Essentials Priority of Documents the contract,
the Tender Form with its appendix,
the Particular Conditions,
the General Conditions,
the Technical Specifications,
the design documentation (drawings),
the bill of quantities (after arithmetical corrections)/breakdown,
any other documents forming part of the contract.
Addenda shall have the order of precedence of the document they are modifying.
Advanced Training PRAG Works 5-7 April 2011

58. Tender Form with Appendix
The Tender Form with its appendix (Appendix to Tender)
Extremely important and has priority over all documents
Try to put all numeric and contract specific info on this table
Use it effectively to check the contract and practical conditions
More detailed info during the upcoming FIDIC training
Volume 2;
All guarantees and forms need to be arranged according to the relevant FIDIC clauses
Advanced Training PRAG Works 5-7 April 2011

59. Do not forget Always try to have a site visit;
This project is co-financed by the European Union and the Republic of Turkey
Always try to have a site visit;
If not a clarification meeting
Allow proper timing for;
Tenderers’ questions
Preparing and approval of clarifications
Questions: up to – 21 days of submission deadline ERA support needed
Clarifications: - 11 days of submission deadline
Questions & clarifications to be published in relevant media.
Advanced Training PRAG Works 5-7 April 2011

60. Questions and answers